GETTING on the property ladder can seem impossible.
But Emmy Dent, a 33-year-old adviser from County Down, has revealed her need-to-know, insider tips to help YOU bag your dream .
Emmy has been working in the industry for 10 years, and she now runs Arise Financial, which specialises in helping people get a mortgage for their first home.
She has shared her tips for , including the key rule you should always follow and little-known tricks to help improve your .
EARLY BIRD GETS THE MORTGAGE
When you come to apply for a mortgage, will run affordability checks to make sure you can afford the monthly payments.
They will generally ask for three months’ worth of previous bank statements – although sometimes they may ask for more.
That means you should have your finances in order for the previous three months before applying, although Emmy says there is “no preparing too early”;.
She says one of the main things you should do is make sure you don’t have any bounced direct debits.
This might happen if you tend to transfer into a account on the same day one of your bills is due to come out, as the money might not be there on time.
In this case the direct debit might be returned and the bill provider will try again a couple of days later.
Emmy explains: “It's not classed as a missed payment so it won't affect your credit file. But when the banks are looking at your mortgage application, they're going, ‘Oh there wasn't any money in that account for that gym membership to go out or they missed the phone bill’.
“Even if it was paid a couple of days later, it just looks like bad money management.”;
She therefore recommends doing a full inventory of your and working out what you pay for each month and what date the money comes out.
Make sure any transfers into your account go in at least a day before your bills are due to come out, as even one returned direct debit could affect your whole application.
One little-known piece of advice is also to check that all your bills are registered to your current address.
If perhaps you’ve been to , moved back home with parents or moved between house shares at some point you might have different accounts registered to different addresses.
Again, this is something you could be declined for if your bills aren't all registered to the same address.
“It's such an easy thing to amend and it can make such a difference when you're trying to pass a credit check,” Emmy says.
Of course, you should make sure you have a good credit score when you're applying for a mortgage.
Emmy recommends getting your full credit file up as there are “so many times when there is stuff on there that people didn't know about, like an unpaid water bill or a default from years ago”.
She says the best company is Checkmyfile as this gives you Experian, Equifax and Transunion all in one place.
Some ways you can do this include registering on the electoral roll at your current address, making sure you are making regular payments on time, and checking for any errors or mistakes on your credit report.
Make sure you monitor your credit file for any fraudulent activity and try to avoid moving home a lot if you can.
When you’re preparing for your application, Emmy’s main advice is to “get your ducks in a row”;.
She says it’s never too early unless you’re planning on moving job or making a big life change.
HOW TO GET A GOOD MORTGAGE DEAL
Always shop around because rates are constantly changing.
“Your current bank might have an okay rate today but tomorrow that might be gone and another bank might be cheaper,”; Emmy says.
If you’re negotiating a mortgage deal, some people like to do it themselves but others prefer to use a broker.
Always use a whole of market broker. Some charge a fee upfront, while others will charge a percentage of your mortgage.
The cost of mortgage advice can vary from around £400-£500 to no fee at all if the broker instead receives commission from the lender, according to Unbiased.
Brokers are often good value for money as they usually get access to deals that aren't available elsewhere.
Home buyers will usually find the fee they paid is made back quickly by the savings they can get from access to rates that are better than those on the high street.
One thing you might not know is that if you’ve already submitted your mortgage application and been given a certain , it’s still possible to get a better deal.
Basically, if your bank’s mortgage rate goes down between you applying and when you get the keys, Emmy says “nine times out of 10”; you’ll be allowed to swap down to the lower rate.
Another tip to get a better mortgage deal is to put down the highest deposit you can.
Emmy explains that the less you need to borrow from the bank, the lower your interest rate and therefore your monthly payments will be.
“I know that's not always easy for first-time buyers but if you could stretch to a 10% deposit over a 5% deposit you're going to get a better interest rate,”; she says.
One way you could boost your deposit is to put your savings into a Lifetime ISA.
This account lets you put in up to £4,000 a year, and in return the Government will give you a bonus of 25%.
It's worth knowing that this can only be used on homes worth £450,000 or less.
You can only withdraw money from these accounts to buy your first home, or if you're aged 60 or over or terminally ill, otherwise you will lose your bonus.
Emmy also recommends telling relatives that you're planning to buy a house as they may want to gift you money for it.
HOW TO GET A BETTER PRICE FROM SELLERS
Emmy says every homeowner ideally wants to sell to a first-time buyer because it’s easier for them and there’s less chance of the sale collapsing.
That's because there is no “chain” involved as the buyer isn't also having to sell their home.
“So if you come in as a first-time buyer and you offer £5,000 less than someone else who has a house to sell, there is a chance that they'll take your offer even though it's lower solely because you're the easiest person to sell to,”; she says.
That means you have “nothing to lose”; by going in with a slightly lower offer because you’re the “perfect person to sell to”;.
In general, Emmy thinks you shouldn’t go in too high with your offer as it’s always possible to work your way up.
She says you should “hold your nerve”; even if tell you they have lots of other viewings for the house, as it’s their job to sell the place for the highest price.
Golden rule
You may want to offer a little more if you’re convinced the house is perfect for you, but Emmy does have one rule: don’t go in above the asking price.
She says this can cause issues down the line as the banks will value the house at whatever it is put on the market for.
As an example, if there’s a house on the market for £300,000, you might go up to £310,000 because you really want it.
But the bank has valued the house at £300,000, so you’ll have to use cash savings for the extra £310,000.
You’ll then lose that £10,000 of value on the house immediately because you’ve paid more than it is worth.
If you want to negotiate on price with the seller, Emmy says she’s seen some examples where it’s obvious buyers won’t get anything less than the property is up for but in other cases it’s worth trying to knock the price down a bit.
“I'd say at the minute, this is very generalised, but people are getting slightly under what it's up for,”; she says.
“So say the house is up for £350,000, people are getting offers accepted at £340,000 or £345,000.”;
Remember, there are plenty of other costs involved that you should factor in when buying a house.
Alongside stumping up a deposit (usually five to 20% of the home's value), you'll also need to consider legal fees.
These are usually about £2,000 including VAT at 20%.
Buyers' solicitors will also do local searches to check for any local plans or problems, and this can cost £250 to £300.
You'll also need to pay a booking fee, usually £100 to £200, an arrangement or product fee of between £1,000 to £2,000, and a mortgage account fee of £100 to £300.
Your lender might apply a charge to move the mortgage funds to your solicitor, which costs between £25 and £50.
Lenders will also expect you to get to protect your home from fire, floods and other damage.
This can cost £298 per year, or £375 per year if you also opt for contents insurance.
Another potential cost to consider is stamp duty.
This applies to homes in England and Northern Ireland that are worth £300,000 or more.
can be up to 12% of the value of your new home.
If you're not sure how much you need to pay, you can use a stamp duty calculator online.
ARE FIRST TIME BUYER SCHEMES WORTH IT?
While schemes have helped millions of people get onto the housing ladder, Emmy warns you should think carefully before using some of them.
In particular she’s seen problems with the and schemes, with some people left with big new builds that they then can’t remortgage or afford.
However she says some bank schemes are particularly helpful.
For example, Skipton Building Society is offering zero-deposit – this is “hard to get”; but helpful for first time buyers.
To get this mortgage, you will need to be a first-time buyer aged 21 and over with 12 months' proof of having paid rent.
The maximum loan size is £600,0000 and it's not available on new build flats.
Meanwhile Accord Mortgages offers mortgages with just a £5,000 deposit needed.
It's only available to first-time buyers and can be used on a property worth up to £500,000.
The maximum age of borrowers at the end of the mortgage term is 70.
“Each bank is trying to help first time buyers a bit more with affordability because are so high,”; Emmy says.
DON'T MAKE THIS BIG MISTAKE
You might be surprised to learn that the most common mistake Emmy sees when people get a mortgage actually has little to do with the process itself.
In fact, the biggest issue she’s seeing currently is buying together and then needing to break up shortly after.
Emmy says it’s actually easier to get divorced than it is to get out of a joint mortgage – so you should think very carefully before buying a house together.
A client she dealt with recently bought a home with their partner eight months ago and they’re now set to lose about £9,000 on the house after deciding to break up.
The couple had put down a £20,000 deposit on a home worth about £200,000, but neither of them can afford the mortgage in their own right.
The bank would have to do an affordability check to take one person off the mortgage, but because neither of them can afford it individually they are now trapped in the house together.
Their only option now is to replace one of them in the house or to sell it.
But even if they sell it, they are facing a 5% early repayment charge of about £9,000, as well as estate agent fees and legal fees.
“I know you can't foresee the future but don't buy with someone for the sake of needing a house and hoping that the relationship’s gonna work out,”; Emmy says.
“Be solid on your relationship before you buy a house.”;
