Buying a property in the current Scottish market can be an overwhelming process — especially for first-time buyers. Trying to navigate lenders' ever-changing criteria, alongside regular product changes, can be a confusing prospect. But don't let first-time-buyer anxiety hold you back from looking at owning your first home.
Here are the top 5 questions we get from first-time buyers every day. Hopefully these answers give you the confidence to start your journey to home ownership.
Do I need a mortgage adviser?
Having an expert on hand to answer your questions can be a huge comfort. As well as getting you the best mortgage deal based on your circumstances, your adviser will guide you through the process every step of the way.
Having an adviser on tap, with their expert knowledge, can save you money — and save you time — while giving you the confidence to navigate an ever-changing market.
How much can I borrow?
Typically you can borrow around 4 to 4.5 times your gross annual income, though this will be affected by other factors like outstanding debts or credit history.
All lenders assess income and expenditure differently to calculate how much you can borrow, so it's always worth speaking to a mortgage adviser who can assess your specific circumstances and work out your affordability.
How much deposit do I need?
The majority of lenders require a minimum deposit of 5% of the property value or purchase price, whichever is lower. A recent survey found that, on average, it takes 5 to 10 years for first-time buyers to save enough to cover a deposit.
To help get you on the property ladder faster, some lenders have launched unique propositions for first-time buyers — including very-low-deposit and even no-deposit mortgages. Your adviser can talk you through what's currently available.
What does my credit score need to be?
There isn't a single minimum score needed to be approved for a mortgage. Lenders look at your credit history as a whole to make sure it fits within their lending criteria, and each lender views that history slightly differently.
Things that have a positive impact on your profile include paying credit commitments on time, using a small amount of credit and paying it off in full each month, and staying within your credit limits.
Things that have a negative impact include missed payments, going over your credit limit, and defaulted accounts. That said, having credit issues in the past doesn't mean you can't get a mortgage — some lenders offer specialist products for people with a more complex credit history.
Will I need a Decision in Principle?
Having a Decision in Principle (DIP) in place is always recommended — it shows you're a serious buyer and the offer you're making is realistic.
A DIP gives you a degree of confidence that you've passed a lender's initial credit assessment and affordability criteria. Most of the time it won't affect your credit rating, as lenders usually complete a "soft" credit search.
The bottom line
There are so many things to consider when buying a property, so it's always wise to seek proper advice from a professional who can guide you through the process. If you'd like to talk through your situation, get in touch with the team — we're always happy to chat.