Improving your buying power has never been more important. With the increase in the cost-of-living, fluctuating interest rates, and high inflation, you need to pay attention to the details that can counteract these current challenges. A new home could be more affordable than you realise. With that in mind, here are a few things you can do that may put you in a much better position to buy the home you desire.
Pay your bills on time
Reduce any debts, from credit cards to monthly insurance payments to car loans, if you can. Late payments can reduce your credit score, so ensure you don’t miss any payments.
Build up your credit
It’s important to use your credit card or have some borrowing history because this shows your potential mortgage provider that you have the ability to pay back debts.
Access your credit report
Keep an eye on your report, checking details such as your address history, payment history, settled accounts, and whether you are on the electoral register. Any errors should be corrected immediately, as they could affect your ability to borrow.
Reduce your debt-to-income ratio
Lenders closely examine your monthly outgoings in comparison to your earnings. So, if possible, pay off any existing debts and do not take out any more new loans. It’s equally important to be disciplined and monitor your spending.
Get in touch with a good mortgage advisor
Good estate agents will put you in touch with a good mortgage advisor. There are many options when it comes to mortgages today that help counteract the effects of high interest rates.
Porting your mortgage
This means if you are an existing homeowner, you could move home without needing a new mortgage. If you are currently paying a more favourable interest rate, then this could save you significantly in costs.
Longer mortgage terms
Lenders are now offering much longer-term mortgages, which means you will pay more interest overall, and also it will reduce your monthly payments.
Interest only
Instead of paying a capital and interest mortgage, you could opt to buy the home you want with an interest-only mortgage, which costs far less per month. Then, in a few years, if you decide to remortgage, you could change your mortgage product.
Increase the size of your deposit
It’s a bit cheeky, but there is always the bank of mum and dad to help increase the size of your deposit. This reduces the amount you need to borrow, but it’s also often one of the biggest hurdles to getting your first or even second home. Create a savings plan and stick to it. You can save money by being savvy with food shopping and socialising at home.
Earn more money
It may be worth considering taking on a second job or negotiating a pay raise. The more you earn, the better. It’s important to be realistic; don’t overdo it. Your earnings have to be sustainable, and your well-being comes first.
Be resilient and resourceful
Don’t give up. Keep searching for the home you want. There is plenty of room for negotiation right now. Sometimes you have to be patient. Your agent will have a deep understanding of your local property market and can put you in touch with a good mortgage advisor.. Sometimes they will be aware of properties about to arrive on the market before they are advertised.
Talk to your agent
Your agent will have a deep understanding of your local property market, be able to put you in touch with a good mortgage advisor, give you the right valuation for your home, and help you find the home of your dreams in the right location by making good use of the equity in your property.
Contact us today for all your home moving needs.