Buying a home is expensive, and it is essential first-time buyers take the matter seriously. Saving for a deposit is a significant challenge, but if you save well, you can significantly enhance your chances of finding your ideal mortgage and home.
Therefore, it is no surprise a recent study suggests over 40% of adults who have experienced a troubling credit rating in the last three years plan to reduce their recreational activities. Cutting back on entertainment and leisure options is the platform for improving a person’s credit score, which may be the key to arranging an affordable mortgage.
There are many ways people can harm their credit score
Specialist mortgage lender Pepper Money spoke with 600 people who have experienced financial problems in the last three years. These problems include missing payments, CCJs, defaulting on payments and both secured and unsecured arrears. There are many ways people can struggle financially, and all these aspects can harm their credit score.
One area that is important for people who have suffered poor credit in the past is to pay off their credit cards. 33% of respondents said they aim to pay off their credit cards to improve their credit rating before they apply for a mortgage. 32% of respondents said their main focus was to pay their bills on time, and 27% of respondents said they plan to switch to a more affordable mobile phone contract.
You must improve your finances before looking to buy a home
13% of respondents said they would consider entering a debt management plan, a DMP, if it assists their chances of improving their credit score and eventually stepping on to the property ladder. Given the importance of your credit score in buying a home, it is vital potential buyers improve their rating. There is a wide range of ways you can improve your score, and if you would like advice on any financial aspect leading to the buying of your home, you can contact us.
A Sales Director from Pepper Money, Paul Adams, said; “It’s clear that many people who have experienced credit problems in the last three years have concerns about applying for a mortgage and are willing to make several sacrifices to buy a home. Cutting down on spending may have little impact on their credit score, however, and customers in these circumstances might be better off speaking to a broker about their options in the specialist mortgage market.”
While many first-time buyers have genuine concerns about stepping on to the property ladder, a lot of assistance is available. If you would like to discuss your options, contact us, and we can help you get a better understanding of the market.
If you are a first-time buyer looking for guidance which will enable you to step foot on the property ladder, we can help. We are pleased to say we have assisted many Rubery first-time buyers over the years, and we look forward to helping you, so please get in touch today.