We all know of the modern day struggles of homeownership, battles of debt and cripplingly low salaries – just to add salt to the wound, some generations claim it’s our way of life, not economical circumstances pinning us down. Skeptical opinions aside, does this mean that you, a millennial, can never own a home? Absolutely not. While buying a home for the first time is no stroll in the park, even a millennial can pull it off when they play their cards right.
Before we start scheming to bag you some equity, let’s take care of some little details such as your wild credit score and that pesky down payment. Student debt is a primary factor holding back young adults from purchasing a home, however under the UK student loan system, your credit history and mortgage eligibility won’t be affected and the manageable repayments can be calculated as part of your regular expenses.
You may, however, still need to work on your credit score, which could save you loads when it comes to getting a mortgage. Along with a pimped up credit score, you’re going to need a down payment of at least 5%, so start saving for that deposit ASAP. Don’t forget about the government Help to Buy: ISA where your savings could be boosted by £3,000 per buyer.
London based Habito have a straightforward breakdown of information on the various types of mortgages available and a handy mortgage calculator which can help you figure out how much money you can borrow. Just remember to factor in your regular monthly payments before biting off more than you can chew on a fanciful loan. So you’ve figured out how much you could borrow, now to stretch it with some schemes to help you seal the deal…
Help To Buy Scheme
For purchasing new builds in the UK, each country has its own Help To Buy scheme to support first time buyers on their mission towards home ownership, without the need for a decent deposit. By putting forward just 5%, the government can lend you up to 20% (or more for Londoners) leaving the remaining 75% to your mortgage lender for standard repayments. This make life easier as you don’t have to come up with 20% of the despot until you pay your mortgage in full or sell up.
Shared Ownership Scheme
If rounding up your deposit wasn’t realistic, or you can’t yet get approved for a mortgage, Shared Ownership schemes are another excellent way to get around lack of finance. With this scheme you can buy 25% – 75% of your house from your landlord and pay rent on the other share, with the chance to buy the other shares later. This means that instead of paying rent (flushing money down the drain), your monthly instalments go towards acquiring home-ownership, littler by little.
Starter Home Scheme
Finally, the newest way to overcome your millennial handicaps: the Starer Homes scheme, which is coming soon, claims to offer a 20% discount on new homes under £250,000 (or £450,000 in London) to first time buyers. Hopeful home owners would be mad to miss this one, watch this space.