Saving

How to get on the property ladder

It’s a challenging time for first-time buyers hoping to get onto the mortgage ladder. Shortages of new and second-hand homes coupled with rises in property prices make it difficult to find and afford a first home. But some things are under your control.

Here are 7 steps you can take to help you get a foot onto the property ladder.

1. Start a savings habit

Lenders like to see a track record of regular savings.

Regular saving is more reassuring to lenders than stashing away one-off sums because it demonstrates that you’re committed to saving out of your disposable income and not reliant on chance windfalls.

Tip: It can help make your saving more visible if you save into a separate savings account rather than letting funds build up in a current account.

Our Mortgagesaver account* is designed to help you save the deposit for your home.

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2. Cut back on non-essential spending if possible

See if you can cut back on non-essential spending and try to keep your spending habits similar month on month wherever possible.

Wild variations in how much you spend, from month to month, may make it look like you’re not in control of your outgoings. Learn more here

Lenders will analyse your bank statements in detail so things like large withdrawals in cash and regular payments to betting shops will come under scrutiny.

3. Make sure you get credit for your rent payments if you have been renting

Paying your rent each month shows lenders that you should be able to manage to repay a mortgage each month, It must be noted that mortgage and rent monthly repayments may differ.

Tip: Informal arrangements to pay a landlord, in cash, might not be accepted as proof of rent so arrange to pay rent by direct debit or standing order instead.

4. Clear the debts

Lenders will check your credit history with a credit ratings agency to see what loans you have at application stage and to see loans that you have paid off in the past 5 years.

They will look to see whether you missed payments or failed to pay off a loan in full or on time.

If you have outstanding loans or a large credit card balance that you are not clearing each month, plan to pay them off as soon as you can.

5. Avoid going overdrawn on your account

The most obvious indicator of whether you can manage your money responsibly enough to get a mortgage is how often your current account goes overdrawn.

Make sure that you keep enough cash in your current account so that you can easily cover all your direct debits and regular spending.

6. Make sure your employment is stable

Lenders like to see applicants who have been employed continuously for at least 1 or 2 years with a reliable employer.

A pattern of switching jobs every year and frequently changing roles may mark you out as a risk.

In other words, lenders want to know that your income will remain stable and your employer is likely to be around for many years to come, minimising the risk that you will become unemployed.

7. Set up email alerts for properties

While you are getting your finances into shape, stay in touch with properties and prices by setting up email alerts with online sites.

It’s good to know, in detail, the areas where you want to buy your first home and how much houses are being sold for there.

Tip: Remember to broaden your search and consider other neighbourhoods, from time to time, to make sure you don’t miss out.

Learn about the 50/30/20 budget rule by clicking here and start saving for your deposit today.

Bank of Ireland Mortgage Bank trading as Bank of Ireland Mortgages is regulated by the Central Bank of Ireland.

Bank of Ireland trading as The Mortgage Store – powered by Bank of Ireland is regulated by the Central Bank of Ireland.

*Terms and Conditions Apply. Mortgage Saver is provided by Bank of Ireland. Bank of Ireland is regulated by the Central Bank of Ireland

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