It’s natural to have some trepidation when you do anything for the first time. Taking that step into the unknown, unsure of how things will go or how you will cope, is something we as humans are geared to be wary of.
Things can be scary for different reasons. Ever been skydiving? It’s scary because…well…you don’t need us to tell you why it’s scary!
Departing from a large sum of money can be scary too. You work hard for the cash you build up, so seeing it leave your bank account is bound to bring up a little lump in the throat.
But these scary things bring about rewards. Ask people who have been skydiving if they would do it again, and plenty would say yes without hesitation (plenty wouldn’t though!).
If you were to ask people who have bought their first home if the risk was worth the reward, the overwhelming majority would answer in the affirmative.
But if you have built yourself up to do something scary, only for it to fall apart at the last minute, that can be really frustrating. This is because it’s not just the thing itself not going ahead, but the hard work that has got you to that position suddenly feeling like a waste of time.
For anybody wanting to buy their first home, putting in the hard work and not getting the rewards is immensely frustrating. For contractors and freelancers who may be finding it difficult to prove affordability or facing other obstacles, it is easy to quickly become disheartened.
The truth of the matter is that 1. You are not alone, and 2. There is help out there that can see you get hold of that dream home.
Are first-time buyers finding it difficult?
When it comes to first-time buyers, lenders naturally want to make sure you are in position to meet their requirements. Being able to consistently deliver your mortgage payments and not face difficulties down the line is what a lender wants to feel assured of.
For contractors or freelancers keen to get on the property ladder, this burden of proof can be a headache. This is because lenders like things to be clear cut. With the way that contractors and freelancers work, proving your income can be harder to make clear than it is for many workers in more traditional employment set ups.
But regardless of whether you are a contractor, freelancer, or traditional worker, many first-time buyers are finding it tough at present.
Research from Aldermore Bank has found that a decreasing percentage of first-time applicants are being approved for mortgage loans at the moment.
The bank’s First Time Buyer Index reported that only 35% of first-time buyer respondents were approved for a mortgage loan at their first time of trying.
This percentage has decreased since the start of the COVID-19 pandemic, with 48% getting approval prior to this.
Almost half of those surveyed said they were rejected at least once. This naturally affects morale and hopes of securing that dream home sooner rather than later.
So what can be done?
In two short words: get help!
Brokers are there to help you navigate the difficulties and pitfalls of the mortgage world. They can make a real difference if you are struggling to secure that first-time mortgage.
Specialist contractor mortgage brokers can tailor applications based on contractor employment models. This sees underwriters bypass traditional means of assessment like payslip evidence, and instead utilise specialist contractor-related criteria.
By calculating gross earnings based on your current day rate, lenders get a clearer, more accurate view of your finances. With this to hand, the lender is better-placed to make a positive decision regarding your mortgage application and maximum mortgage loan amounts.
A broker can make a big difference for residential mortgage applicants too, supporting with proving affordability and ensuring your application gives you the best chance of the desired outcome.
So if you are feeling dejected about not being able to get on the property ladder, get help! With the right experts at your side, that dream home might not be so very far away.