Property Ladder Guide

The only personal finance assistant for prospective first time buyers

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Getting on the property ladder:

Who is this For?

Anyone who is:
1.) Actively looking to plan your journey on the property ladder.

2.) A recent graduate or current student, just begining to earn your first substantial income.

So how does the home buying process work?

Well you simply buy a home. But it's a bit complicated as most people don't have the money upfront so they get a loan from the bank called a Mortgage.

Mortgages work like this

You put up a deposit (typically 20%) and the bank will lend you the remaining 80%.
The more you put upfront to buy the property will essentially reduce how much interest you need to pay back as you have a smaller debt.

A Short Glossary:

Mortgage deposit :

The money you need to put down to get a mortgage from a bank as
defined above

Government schemes:

Schemes put in place by the government to get more first time
buyers on the property ladder.


Analyse your property scope

  • Which Location?
  • How many rooms?
  • Planning a family?
  • Which price range do you fall into?
  • What is your timeline?
  • How much deposit will you need?
  • Once you have done this you can then go on
  • and...

Check your current affordability

  • What's your current net income?
  • How much have you saved to use as a Mortgage deposit?
  • How much can you save each month?
  • What is your credit score?
  • Are there any negative reports on your credit score?
  • How much deposit will you need?
  • There are particiular negative reports that can affect your ability to apply for a mortgage within a certain time frame. Examples include having a CCJ or recent payday

Re-evaluate your property targets
or redefine your circumstance

  • So you now have your property scope and your current affordability. If your current timeline or deposit saving needs seem feasible then stick with your plan.
  • Usually this isn't the case, you might not earn enough per month to put money towards your savings. Hence a higher paying job might be needed or a reduction in your current outgoings or your timeline might be a bit tight. If this is the case then it makes sense to move your timeline.


Minimising your deposit requirements
and increasing your savings

  • There are schemes such as the Help to buy equity Utilize any Government scheme which will help you reduce your deposit requirement or increase your deposit, Shared ownership, Help to buy ISA and the Lifetime
    ISA. Each scheme has their advantages and disadvantages
    and you should consult the services of an independent
    financial advisor.
  • Some of these schemes may reduce your deposit requirements from the typical 20% to just 5% and still not increase the amount you borrow from the bank as the Government loans you the 15% interest free for 5 years.

Detail your achievables and get
to work could be:

  • Increase net income by £500 (through a better paid job or a raise).
  • Satisfy CCJ on credit file.
  • Boost credit score to 660.
  • Open a Help to Buy ISA.
  • Reduce monthly spend by £250 etc.
  • Your achievables are defined by the insights you have generated from 1-4. Always re-evaluate them as your situation can change (e.g having children).

Shop smart and get your home

  • So you have increased your property ladder affordability and you are ready to get your new home. Make sure you get the services of a good broker as they will advise you on methods to further reduce your deposit requirement or your mortgage costs.

Enjoy your new home

Disclaimer: Please seek Independent financial advise. Your home
may be repossessed if you do not keep up repayments