The idea of buying your first home is exciting and daunting in equal measure, but some people make the mistake of not fixing their finances before going ahead. What are a few of the key aspects to resolve before setting your heart on a new home and making an offer on the property?
Get Other Debts Under Control
Paying off all of your other debts before buying a property isn’t essential, as you can still get approved even if you’re paying loans and credit cards. If you can afford to pay them together with a mortgage, then this won’t stop you from going ahead. However, it’s important to make sure that those debts are under control and manageable.
For instance, if you have a credit card with a big balance that isn’t going down and that you’re paying a lot of interest on every single month, this is the perfect moment to do something about it. You should be looking to feel completely in control of your finances and ready to make what could be the biggest investment of your life.
Check Your Credit Score
A good credit score is essential to your hopes of getting a mortgage approved. You can check this on sites such as Trussle, which provides a mortgage in principle based on a credit score check and criteria from 18 lenders to accurately see how much you can borrow. An initial decision will be given in just a few hours, with a simple online process for you to follow to reach this stage.
If you need to fix your credit score, this can be a fairly lengthy process. You’ll need to pay off any debts that you’ve fallen behind on and sort out any other issues that are keeping your score down. In other cases, the lack of current credit could be a problem, so it might make sense to apply for a credit card with a small limit, or something similar.
Work Out a Financial Plan
You might have reached this stage of your life without having any sort of financial plan in place, as you’ve never felt the need for one before now. In that case, this could be the perfect moment to plan ahead for the first time and understand how to make a better future. It might not require big changes to your lifestyle but it’s still an important step to take.
Understanding your future commitments is crucial when you want to take out a mortgage, as it lets you see what sort of mortgage repayment you can safely handle on a monthly basis. Take into account factors such as whether you plan to start a family soon or if you want to change career in the near future.
By following these steps, you can get your financial situation clearer in your own head and also prepare to request a mortgage. This will let you feel more confident about going ahead and should help to remove any doubts you have about getting approved.