Advice for buying your first home in your 30s


Back

The average age of a first-time buyer in the UK is 30, but in London the average is 37. So if you’re in your 30s and eager to buy in the capital you’ll be in good company.

Thankfully, though, there’s plenty of advice available if you have ambitions to buy in the capital.

What help is available?

Trying to save up a deposit can take a lot of sacrifice and effort over a long period of time.

Some people get help from the bank of mum and dad but there are several Government schemes you can benefit from using.

These include:

Help to Buy ISA – You’ll receive a bonus of 25% on your savings up to a maximum bonus of £3,000 (payable on savings of £12,000 or more). You can deposit a lump sum of up to £1,200 and then up to £200 a month.

Lifetime ISA – You’ll receive a bonus of 25% on your savings up to a maximum yearly bonus of £1,000. You can hold cash, stocks and shares in this type of ISA.

London Help to Buy – If you’re buying a new build in London, this Government-backed scheme will provide an equity loan of up to 40% of the property’s value, and is interest free for the first five years.

You then just need a 55% mortgage and only a 5% deposit.

Take your time

Buying a property will be the biggest purchase you’ve ever made so you’ll want to make sure that you buy the right home in the right location. If you’re buying with someone else, you both need to agree what your must-haves are and what you’re willing to compromise on. You won’t want a long commute to work and if you’re priced out of your ideal location you may need to look elsewhere.

If you have a family, you’ll want to choose a home with enough space to grow in. You’ll also want to be part of a community and want it to be an investment too. Some of the most family friendly London areas include Greenwich, Sutton, Kensington, Chelsea, Croydon and Bromley.

If you’re unsure how much you’ll be able to borrow or would like someone to talk you through the different mortgage options, you need a mortgage adviser. If you’re wanting to purchase a new build, having a new homes mortgage adviser (NHMA) can be invaluable.

With a new build there are lots of incentives and offers available and, the earlier you put down your deposit, the more choices you’ll have.

Your adviser can explain them all to you and help you secure a mortgage at a competitive rate. This can save you both time and money.

Prepare your finances

When you apply for a mortgage you’ll be asked to provide bank statements and wage slips as the mortgage provider will want to see your income and outgoings. They must be confident that you’ll be able to make your monthly payments on time, every time.

In the months leading up to your application you should stay out of your overdraft, hold off applying for other forms of credit and pay off any debts you have. This will show the mortgage provider that you can handle money responsibly.

You can register with the credit reference agencies for free to see what information they hold on you and this can be eye opening if you’ve never checked your records before. Any missed or defaulted payments will stay on file for seven years and details of every credit account you have are recorded too. Your mortgage provider will check your credit history and use it when calculating your credit score. The higher your score, the more likely you are to be accepted for the mortgage you’ve applied for.

Choosing your mortgage

One of the benefits of applying for a mortgage in your 30s is that you should be able to get a longer mortgage term, if you wish to reduce your monthly repayments. 1 in 4 first-time buyers choose a mortgage term of 30 – 35 years.

Your salary will probably be larger than it was in your 20s, as you’ll be further into your career. You should also be able to borrow more than you would have previously and will be more financially secure.

If you’ve shared a financial product with someone in the past, such as a loan, their credit history will impact on yours.

To stop this, you can contact the credit reference agencies and ask for a notice of disassociation. This can prevent their bad credit history from stopping you from getting a mortgage.

Challenges of buying in your 30s

If you’re a parent, your mortgage provider will ask how much you pay for childcare. If you pay for childcare, are expecting a baby or are on maternity/paternity leave, you might not be able to borrow as much as you’d like.

While you’re saving for a deposit a lot of willpower and compromise is needed. You might want to rent a cheaper place so that you can save more each month.

Setting up a direct debit into your Help to Buy ISA or Lifetime ISA can also be a good idea, so you treat it like a bill that has to be paid.

Going without holidays and other luxuries might be difficult in the short term but once you’re a homeowner you’ll be so glad you did. Owning a property in London is a real achievement and in the future, you could stand to make a lot of money if you decide to sell.