The average person moves home eight times in their life. The first few moves are usually down to parents who make the call, but then as schooling gives way to employment, one tends to fly the nest.
There were 310,000 first-time buyers in the UK last year, and while half a per cent less than in 2014, this is still a significant number and the first drop since 2011. And it’s not just first-time buyers who are house hunting at any given time. Is it often events that are meaningfully life-changing that prompt a move: a change to income can be the catalyst for a move up the housing ladder to a larger property or a different area, and the surprise of twins may call for extra bedrooms.
Regardless of the reason, every homebuyer needs to put their budget in order to understand what they can afford.
To rent or buy?
Before first-time buyers come knocking on your door with a triumphant wave of their deposit cheque, these aspiring homeowners should be asking themselves whether it suits them to buy at all. Renting clearly offers greater flexibility and less responsibility; not being tied to a property equates to the kind of freedom that resonates with a lot of people. Conversely, home ownership carries strong feelings of stability and serves as a long-term investment to boot. We examined the competing factors of the rent-versus-buy decision in more detail here.
So once the decision to buy has been made… what next?
Help is out there
For everyone from the newly married to older couples downsizing in retirement, moving can be daunting, especially if they have limited or no experience of the mortgage process. There are a number of sources of information on the subject of moving home that can be utilised, covering everything from advice on how to get a mortgage approved, through to the more exciting tasks associated with moving day.
Before applying for a mortgage, it is important that consumers are as informed as they can be to ensure that any mortgage that they take out will remain affordable if circumstances change. Some changes that can have an impact include potential reductions in income, a new arrival or relationship changes. Wider economic changes can also impact their ability to meet mortgage commitments. With interest rates at a record low there are a number of great deals available at the moment. However, interest rates are likely to increase in the future, causing mortgage repayments to increase too.
Ahead of a home purchase, a comprehensive affordability assessment is the best place to start.
With the explosion in comparison sites, digital banking and credit score providers, there is a growing number of customers who are entering the mortgage journey with an understanding of the rates and products available, and a firm view of what will suit their needs. It is now more important than ever to have the right tools at your disposal to be able to verify what these customers are telling you to prevent (as far as possible) the possibility of any future customer detriment.
We are able to help you with your mortgage application process to ensure that the product the customer is taking is appropriate to their needs and minimises the lending risk.
For example, the use of Automated Valuation Models allows you to ensure the customer’s desired property is correctly priced and not overvalued, preventing over lending – and our Identity and Fraud products can help verify the identity of the customer and help to prevent money laundering. Our market-leading affordability products will also help you to ensure that the customer has sufficient income and ability to meet the repayments required to sustain the mortgage after it has been approved.
These tools not only help you to minimise the lending risk, but also smooth the application journey for the customer.