A Liverpool-based mortgage broker has warned people about a type of currency when buying a house.
AL Mortgage Solutions said cryptocurrency - a digital form of currency that operates through computers rather than through a government or bank - won't be accepted by the majority of high street lenders. Cryptocurrency and simple admin errors such as incorrectly spelled addresses could ruin people's chances at owning their first home.
The ECHO spoke to AL Mortgage Solutions for the top five key pieces of advice they can give to first time buyers. AL Mortgage Solutions Director Alex Leppert, 31, said: "With house prices at an all-time high, it's becoming more difficult for young people to get their foot on the property ladder and advice isn't one size fits all as everyone’s circumstances are completely different."
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Cryptocurrency
This could be a big problem for many first time buyers after the big rise cryptocurrency popularity. Buyers who have money invested into crypto and want to use their profits for their deposit will be rejected by the majority of high street mortgage lenders.
Alex said: "This is for two reasons. The first is money laundering, it’s a lot harder for mortgage lenders to confirm the original source of funds. Second, they view investing in cryptocurrency as a form of gambling due to the volatility of the markets."
Avoid going over 50% of your agreed credit card limit
If a bank sets a credit limit of £3,000 it is advised for people wanting to go onto the property ladder to not go on a spending spree straight away. Spending more than 50% of the agreed limit could impact people's chances regardless of whether you pay it back.
According to Alex, lenders view this as negatively. It implies you are reliant on the card to live.
Avoid excessive gambling
Buyers don't have to stop gambling completely but an excessive amount can put people in a difficult position. According to Alex, lenders will view gambling negatively as well and are likely to decline.
If they don't many will take an average of the last three months' spending on gambling and treat this as a commitment.
Pay your parking fines and any other debts
Check your credit score because any simple mistakes can make buying a home very tedious and long winded. Before starting the process it is recommended to make sure all spellings on addresses and details are spelled correctly.
According to Alex, any debt which goes through the court such as an unpaid parking fine can also damage a buyer's chances of purchasing their first time home.
Borrow money but make sure you pay it back
Buyers tend to build their credit reports by lending money. Lenders like to see a track record of people borrowing money and paying it back on time.
Having no history of lending money can make the initial payment much bigger than it needs to be. Having no history of loan repayments can limit the chances of being approved for a mortgage or mean you pay a much bigger deposit.
Alex said: "It's never been more important to get personalised advice from a qualified professional. If you are young and fortunate enough to be in a position where you have a roof over your head and spare money each month to save toward a deposit.
"With house prices at an all time high it's becoming more and more difficulty for young people to get their foot on the property ladder.
"Advice isn't one size fits all as everyone's circumstances are completely different. It's never been more important to get personalised advice from a professional. If I was to give one piece of advice I would say, get advice from a professional who will be able to breakdown all the costs."
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