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The Millenial’s Guide to Getting a Mortgage

19 February 2018 No Comment

Millenials are notoriously hard done by when it comes to the current state of the economy. Sure, people from older generations can claim that we are lazy, or spend too much of our income on avocados, but the truth is that the cost of housing and living is on the rise, while the amount that we are paying remains the same. Something has to give, and this is why many of us tend to opt to rent. The sad truth of our situation is that if we want to move out of our parents’ homes before we reach our third decade, chances are that we will have to rent and scrimp and save as we try to pull together a mortgage deposit or be accepted onto a mortgage scheme. But don’t worry. All hope isn’t lost! Believe it or not, there are ways to get your foot onto the first foot of the property ladder, securing a home of your very own. Read on to find out the best ways to go about getting a mortgage!

Securing a Deposit

Perhaps the most difficult part of securing a property of your own is gathering up a deposit. When most of us are finding difficulty in getting by with rent payments, rising energy costs and ever-expanding food bills, the 10% deposit placed on most mortgages can become a completely daunting and intimidating figure. The more expensive the property you look at, the larger the deposit becomes. However, people selling homes are catching on to the difficulty that people are having in saving up such large amounts of cash and increasing numbers of 90%, 95%, and even 100% mortgages are popping up all over the market. This means that you’d require no deposit, or only have to gather up a 5% or 10% deposit. Sure, this may be tempting, but regardless of your situation, it’s always good to bear in mind that the larger the deposit you put down, the smaller your subsequent repayments will have to be. So you want to clear as much of the cost up front as possible. Here are two common ways of going about this.

Loans

The first option at hand is to take out some form of a loan. Generally speaking, fha home loans are best for first-time home buyers. They have relaxed qualifying standards and offer reasonable terms to individuals who may even have a bad credit score or have experienced bankruptcy in the past.

Saving

The second option is to save. This may mean that you have to scrimp and cut out luxuries and extras for a while, but the final result of having four walls and a roof to call your own should be more than worth the small sacrifices that lead up to it. Consider cutting down on social activities, opting for own brand foods in your weekly shop, and taking public transport instead of running your own vehicle. Small changes will quickly mount up!

As you can see, saving a deposit in order to secure a mortgage may well be daunting but it is definitely feasible and something that almost every young person should aim to achieve!

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