For reasons linked to the Autumn Budget, those looking to get a first time buyer mortgage in the UK are kind of on borrowed time.
You can find out the detail as to why by reading our recent article on Stamp Duty Land Tax (SDLT). However, to summarise, the SDLT threshold for first time buyers is shrinking from £425,000 to £300,000 on 1 April. This means that first time buyers purchasing a house for £500,000 after 1st April 2025 will pay £6,250 more in tax than they would have done before 1st April 2025.
So, given how the new rates will come into play just over two months from now, our team of Guildford mortgage brokers thought it would be a good idea to try and help those looking to take advantage of the preferential SDLT tax rate prepare to apply for a first time buyer mortgage.
With that in mind, here are five things that you can be doing now to get you ahead of the game and hopefully buy a first time buyer property before the new tax bracket comes into effect.
1. Check your credit score
Companies such as Equifax, Experian and checkmyfile enable you to access your own credit report very easily. By accessing it, you’ll be able to get a sense of where you sit on the credit score spectrum. If it’s not favourable, then maybe you’ll need to spend some time improving it, which you can begin to do by simply closing down unused or dormant accounts. If it does look good, then at least you’ll know it’s worth investing the time in applying for a first time buyer mortgage.
2. Put the New Year, new job idea on ice (for now)
A New Year presents new opportunities, and a new job is often on the hotlist for many. However, lenders like consistency. They also like to see that you’ve been employed in a job for good while, so switching jobs now, just as you go for a mortgage (especially if you’re looking to buy before 1st April), will effectively be rocking the mortgage boat. Our advice would be to sit tight until the mortgage is in place. Then feel free to jump ship.
3. Debts definitely don’t help
Even as a first time buyer that doesn’t have any experience of buying a property, you’re likely to already be aware of this. However, as a Guildford mortgage broker, we often see mortgage applicants with debts – sometimes very small debts – that they could quite easily clear but for various reasons, they haven’t. Whilst a small debt may not be of concern to you, it may spook the lender. So, if you have the ability to clear a debt, then our advice would be to clear it.
4. Pair up
It’s not just couples that need to buy a first time buyer property. Those who are single do, too. Of course, the benefit of buying as a pair means that a lender will make a decision based on two sets of deposit money and two incomes. However, you don’t have to be with someone to form a pair. If you have friends that are also looking to buy, why not consider buying together. Not only are you likely to increase your chances of getting a mortgage before the 1st April if the combined finances are more compelling in the eyes of the lender, but you’ll also be able to increase your budget, too.
5. Talk to a mortgage broker
A good mortgage broker will not only talk you through the previous four points, but also make you aware of countless other things to consider when it comes to applying for a first time buyer mortgage. They’ll also handle your mortgage application on your behalf, too. As a longstanding mortgage broker in Guildford, we’ve secured thousands of first time buyer mortgages for our clients. We know the shortcuts. We know the lenders. And we know what information is important when it comes to a successful mortgage application, and how to save time by ignoring the rest. If time is of the essence, then a mortgage broker will help you save lots of it. And if you’re looking to buy this side of 1st April, then that’s invaluable.
If you’re a first time buyer that wants to get a mortgage before the upcoming tax changes on 1 April 2025, then contact Complete Mortgages’ team of mortgage brokers in Guildford on 01483 238280 or e-mail info@complete-mortgages.co.uk.
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