Should First Time Buyers Wait? A Guide to Making the Right Decision

Are you feeling ready to take the next step towards homeownership? Whether you’re just starting out or you’ve been saving for a while, the process of buying a home can be overwhelming, especially when it’s your first time. But don’t worry, we’re here to help.

You may be feeling unsure about where to start or worried about financial instability but waiting for the “perfect” moment to buy may not be the best course of action. Instead, it’s important to consider what you can accomplish right now with what you have.

In this article, we’ll provide you with educational content on the homebuying process, including tips on how to save for a deposit, how to improve your credit score, and how to navigate the mortgage application process. We’ll also touch on the concept of compromise, as it’s important to keep in mind that your first home may not be your dream home, but it’s a steppingstone towards achieving your ultimate goal.

So, whether you’re just starting out on your homebuying journey or you’re already well on your way, keep reading for valuable insights and guidance to help you make informed decisions and turn your dream of homeownership into a reality.

Common reasons why first-time buyers wait to buy

Reason 1: Financial instability

One of the most common reasons why first-time buyers hesitate is due to financial instability. This can be caused by several factors, such as a low income, high debt, or job insecurity. If you’re in this situation, it’s important to take a realistic look at your finances and assess whether you’re in a stable enough position to take on the responsibilities of homeownership.

Low income can be a significant barrier for some first-time buyers, but there are ways to work around this. We can help you understand how your income affects your mortgage, what income you can use to substantiate your application, and other tips and tricks when it comes to getting a better offer from mortgage lenders. It’s also important to note that income multiples vary significantly from lender to lender, so speaking to someone independent like us can help you determine whether your income is truly holding you back or if it’s just the few lenders you’ve compared between that aren’t the best for your individual needs.

High debt can also be a cause of financial instability. It’s important to understand that some lenders are more flexible about debt than others, and just because your own bank told you your debt is an issue, it doesn’t mean this will be the case for every lender. We can help you better understand your debt situation and recommend lenders that may be more suitable for your needs.

Job insecurity is another concern that may cause hesitation among first-time buyers. If this is something you’re worried about, it’s important to determine what your actual concern is. Are you concerned about losing your job and not being able to pay your mortgage? Or are you worried about being off sick and not being able to repay your mortgage? There are several safeguards and protection products available that can alleviate these worries. We can help you better understand your options and make informed decisions that can give you peace of mind.

By speaking with us, we can help give you a clearer picture of your financial situation. If you need to make improvements, we can provide guidance on where to start. Or, you may find that you’re actually able to buy a home right now. We can help you explore your options and find the best solution for your individual needs.

Reason 2: Lack of knowledge and experience

Another reason why first-time buyers may want to wait is due to a lack of knowledge and experience in the homebuying process. Buying a home can be a complex and confusing process, especially if you’re unfamiliar with the terminology and procedures involved. It’s important to educate yourself on the process and seek guidance from experts, such as real estate agents and mortgage brokers.

At Prospect Tree Mortgages, we understand that the homebuying process can be overwhelming, especially if you’re a first-time buyer with little to no knowledge of the process. That’s why we’re here to help. Our team of expert mortgage brokers has years of experience working with first-time buyers, and we’re well-practiced in breaking down the complicated process into easily manageable chunks.

We want you to know that a lack of knowledge about the homebuying process is nothing to be ashamed of. In fact, it’s completely normal. But, the good news is that it’s easy to remedy. By picking up the phone and having a brief chat with one of our mortgage brokers, you can grow your knowledge and confidence in the homebuying process. We’ll take the time to explain everything to you, from the terminology used to the procedures involved, so that you feel comfortable and informed throughout the entire process.

We pride ourselves on our ability to make the homebuying process as easy and stress-free as possible for our clients. So, whether you prefer to chat over the phone, via email, or in person, don’t hesitate to reach out to us. Let us help you gain the knowledge and experience you need to make informed decisions and turn your dream of homeownership into a reality.

Reason 3: Difficulty qualifying for a mortgage

A lack of credit history can also make it difficult for first-time buyers to qualify for a mortgage. Without a history of borrowing and repaying loans, lenders may be hesitant to approve a mortgage application. However, there are steps you can take to build your credit score and increase your chances of being approved for a mortgage.

Qualifying for a mortgage can be a challenge for first-time buyers, especially if they have a limited credit history. But don’t worry, because at Prospect Tree Mortgages, we’re here to help. When you contact us, we’ll help you understand your credit score and identify any areas for improvement. We can also introduce you to lenders who specialize in working with clients who have limited credit histories or even bad credit.

It’s important to note that different lenders have different criteria for lending, and some may be more lenient than others when it comes to credit scores. Our team has in-depth knowledge of the mortgage market and can advise you on the lenders who are most likely to approve your application.

We understand that you may be concerned about further affecting your credit score, but rest assured that we take a responsible approach and will only carry out a credit search if it’s absolutely necessary. Our priority is to help you secure a mortgage that’s right for your needs and circumstances. So don’t let a limited credit history hold you back from buying your first home – contact us today and let us help you take the first step towards homeownership.

Fast Forward to When You’re Ready to Buy: Overcoming First-Time Buyer Hesitations

Assuming you’ve spoken to a mortgage advisor and have received an agreement in principle, congratulations! You’re well on your way to becoming a homeowner. At this point, it’s important to remember that compromise can be a necessary and valuable aspect of the home-buying process.

Think back to when you purchased your first car. It may not have been your dream car, but it was an important step in your journey as a driver. Buying a home can be similar. Your first home may not be your dream home, but it’s an essential step towards achieving your long-term financial goals.

By being open to compromise, you can find a home that meets your needs and budget without sacrificing your financial stability. Let’s explore some strategies for finding your ideal home without breaking the bank.

Location: One of the biggest factors that affects the price of a property is its location. If you’re flexible about where you live, you may be able to find a property that fits your budget. Consider looking outside of your preferred area, or in an up-and-coming neighbourhood that may be more affordable.

Size: If you’re struggling to find a property that fits your budget, you may need to consider compromising on size. Look for a smaller property, or one that needs some work, which may be more affordable than a larger, move-in ready property.

Condition: Similarly, if you’re willing to take on some renovation work, you may be able to find a property that’s more affordable. Look for properties that need cosmetic work rather than major structural repairs.

Age: Older properties can often be more affordable than newer ones, so if you’re willing to take on the maintenance and upkeep that comes with an older property, this could be a good compromise.

Features: Finally, think about what features you really need in a property, and what you can live without. Do you really need a garden, or would a balcony suffice? Could you live without an ensuite bathroom, or a garage? By being willing to compromise on certain features, you may be able to find a property that fits your budget.

Remember – Time in the market is often better than timing the market

Often we are overly concerned about when to enter the housing market. These concerns are varied, often sounding like “what if interest rates come down next month?”, or “what if the housing market crashes?”. Whilst these are valid concerns, they’re often short-term issues. It’s important to remember that buying a house is a long-term investment, which should be considered as such.

Sure, buying a house one day for the market to crash the next isn’t ideal – however, unless you were planning on moving again in the short-term, the likelihood is that by the time you come to sell or move, the house market will probably have recovered. Nonetheless, if you’re looking to upgrade your home, then a market crash could actually benefit you! To read more about this, take a read of our article specifically for First-Time Buyers here.

If you’re ready to start your property journey, then get in touch! Follow the link below to book a quick free chat with one of our friendly advisors who’ll talk you through your first steps.