So who is this for:1) Actively looking to plan your journey on the property ladder
2) Recent graduate or current student.
To buy a home you usually need a mortgage which requires a deposit of 20% of property value. So here's your guide to getting your property ladder deposit.
Property scope: what Location? How many rooms? planning a family? what price range? your timeline? How much deposit will you need?
Current affordability: your current net income ? How much do you have in savings to put towards a Mortgage deposit ? How much can you put towards your Mortgage deposit savings each month? your current credit score? Are there any particular negative reports on your score that will keep you from getting a mortgage within a certain timeframe e.g A CCJ or a recent payday loan on your file.
Re-evaluate your property targets or redefine your circumstance: So you now have your property scope and your current affordability. If your current timeline or deposit saving needs all seem feasible then stick with your plan. Usually this isn't the case, you might not earn enough per month to put money towards your savings and hence a higher paying job might be needed or a reduction in your current outgoings or Your timeline might be a bit tight and every other factor being fine.
Minimising your deposit requirements and Increasing your savings: So now, you know what you can reasonably afford and how long it will take you to reach that point of affordability. You must now utilize any Government scheme which will help you reduce your deposit requirement or increase your deposit savings.There are schemes such as the Help to buy equity loan,Shared ownership, the help to buy ISA and the Lifetime ISA. Each scheme has their advantages and disadvantages and you should consult the services of an independent financial advisor.
Detail your “achievables” and get to work: So, you know your property scope,your affordability, you know how to reduce your mortgage deposit and increase your savings and now it’s time to take action: Things included in your achievables could be 1) Increase net income by £500( hence a better paid job or a raise) 2) Satisfy CCJ on credit file 3) boost credit score to 660 4)Open a Help to Buy ISA 5) Reduce monthly spend by £250 etc. Your list of achievables is defined by the insights you have generated from 1-4. Always reevaluate them as your situation can change( e.g kids)
Shop smart and get home: So you have increased your property ladder affordability and you are ready to get your new home.
Make sure you get the services of a good broker as they will advise you on methods to further reduce your deposit requirement or your mortgage costs.
Disclaimer:Please seek Independent financial advise: Your home may be repossessed if you do not keep up repayments