As the start of a new year brings with it renewed hopes for many potential homebuyers, the latest research from Zoopla suggests that 2025 will be a bumper year for property transactions. With buyers and sellers returning to the market after delays caused by higher mortgage rates, it’s more important than ever to prepare in advance and avoid common pitfalls.
Mortgage applications
For those who were put off buying due to higher mortgage rates, don’t worry – it’s not necessarily the end of the road for your mortgage application. With the right preparation and expert advice, you can overcome obstacles and find yourself climbing the housing ladder in no time.
One of the most important things to do is get your paperwork in order. Self-employed borrowers may need to provide a longer history of income, as well as proof of operating and travel costs.
But it’s not just about getting the paperwork right – you also need to check your credit records carefully. Even if there are “blips” on your record, consider looking into specialist lenders who may consider applicants. And don’t worry if you’re rejected – it’s not necessarily the end of the road for your mortgage application.
If you’re an older borrower, you’ll want to consider how changes in income and retirement savings could impact your mortgage payments. Some lenders offer products specifically designed for older borrowers, such as retirement interest-only (RIO) mortgages and lifetime mortgages. However, these options may affect the amount of inheritance left behind, so it’s essential to carefully weigh up the pros and cons.
Impact of stamp duty
With the stamp duty discount set to decrease in April, first-time buyers purchasing a property in England and Northern Ireland will see the “nil rate” band reduce from £425,000 to £300,000. But don’t worry – there are initiatives in place to help first-time buyers onto the property ladder, such as shared ownership schemes.
So what can you do to make your mortgage application process smoother? Arranging a mortgage in principle will give you an idea of what you may potentially be able to borrow, enabling you to be realistic about your budget. And don’t forget to factor in hidden costs such as removal fees, decorating, and legal fees – making use of savings accounts can help earn interest on these and save a little extra.
Finally, consider broadening your horizons when searching for a property. House hunters often fall in love with the “curveball” property that doesn’t exactly fit their initial specifications but turns out to be what they want. By casting your net wider, you may uncover an area or property that you’ll love and would otherwise not have looked at.
