The first thing any first time buyer needs to do is work out their budget. It might sound like an obvious suggestion, but all finances need to be taken into consideration. Many young people looking to get onto the property ladder are coming out of university already dragging large debts behind them, but this does not mean purchasing a home is necessarily out of the question.
Many lenders are more willing to look forward than they used to be, rather than simply focussing on the levels of debt a person has. Today's climate is more relaxed, particularly towards student debt, with an increasing number of lenders more interested in the current earnings and future earning power of students than in the past.
For those who have been putting some money away, counting the pennies will certainly be worthwhile, because while you might not think you have enough for a deposit, you might be pleasantly surprised. An increasing number of lenders are now willing to offer larger mortgages, meaning that the amount needed for a deposit may be much less than you thought. For example, some companies even offer 100 per cent mortgages, whereby no money is paid as a deposit, with all the money instead being taken out of a mortgage.
While in some cases this can be a dangerous option, because of the potential for mortgage repayments to be steep, offering little room for manoeuvre during a financially tough month, for some they it can offer a potential solution to the substantial obstacle of a deposit.
Using the internet to work out how much you can borrow is not always the best solution either. Many of the calculators which offer an idea on how much can be borrowed in fact only provide crude calculations, with few relevant details taken into account. Therefore, it can often be more accurate to speak to an advisor or the lender themselves as a way to discover how much you can in fact borrow, because in this way all the information that will be important to the decision on how much can be borrowed will be taken into account.
