Keeping things affordable when purchasing a property in the UK has never been easy; today, with average house prices at all-time record highs, it’s practically impossible.
Even so, there are steps that can be taken to avoid needlessly overspending along the way. Whether you are looking to buy your first home or planning to relocate, the following could save you significant sums of money:
1. Pay the Biggest Deposit You Can Afford
With 95% LTV mortgages back on the High Street, it can be tempting to hand over as little as possible to secure a mortgage. Unfortunately, smaller deposits always translate to higher rates of interest and more expensive mortgage products. Wiping out your savings entirely is inadvisable, but paying the biggest deposit you can comfortably afford could save you a fortune long-term.
2. Examine Your Credit File
Mainstream lenders continue to place disproportionately heavy emphasis on credit scores when processing mortgage applications. This rarely bodes well for the average borrower but is not necessarily something that is beyond your control. There may be a variety of ‘questionable’ entries on your credit file that can be easily corrected. Discuss your credit score with an independent broker, and make as many short-term corrections as you can before applying.
3. Consider Alternatives to Mainstream Mortgages
If you already own your own home, it may not be necessary to apply for a mortgage in the traditional sense. For those looking to relocate, a bridging loan can afford the spending power of a cash buyer. You borrow against the equity you have tied up in your current home, you buy your next property, and you repay the loan when your previous home sells at a later date. A far more amicable approach than getting stuck in a stagnant property chain indefinitely and facing the prospect of watching your dream home slip through your fingertips.
4. Apply For a Higher-Value Mortgage
On the High Street, it is rare to be offered more than 5x your annual salary as a mortgage loan. With average house prices hovering at around £270,000, this counts the vast majority of average earners out of the running. Away from the High Street, it is not uncommon to be offered anything from 7x to 9x your average salary. If you can comfortably afford the repayments, a higher-value mortgage could negate the need to pump vast sums of your own money into your next (or first) home.
5. Compare the Entire Market and Negotiate
Most price comparison sites limit their services to mainstream lenders, perhaps with a few independent names thrown into the mix. By contrast, an experienced independent broker will compare the UK mortgage in its entirety on your behalf, factoring in dozens of lenders and hundreds of potential deals not included on mortgage comparison sites. Importantly, your broker will also provide the support and representation you need to get an unbeatable deal while negotiating on your behalf to keep borrowing costs to the bare minimum. All of which are provided 100% free of charge and yet could translate to significant long-term savings.
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