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Money-saving expert Martin Lewis has revealed his top mortgage tips to help first-time buyers onto the property ladder.
Mortgages have changed over the years. In the past, they were exclusively worked out on multiples of your salary. However, On ITV’s The Martin Lewis Money Show this week, the finance guru revealed this isn’t strictly the case anymore.
Instead, he stressed the importance of the ‘affordability check’ before getting a mortgage offer, and his top tip for passing it with flying colours.
Martin Lewis mortgage tips
He pointed out that mortgages are not just about income, but look at savings and outgoings. The savings expert suggest becoming more frugal about six months before applying for a mortgage.
‘Unlike a loan or a credit card, where they do it statistically based on what you’re likely to do, with a mortgage they actually look at what you’ve got coming in and going out,’ he explains.
‘I’m not saying frugal – don’t go out and don’t do anything. But it’s a good moment to show you’ve got spare income,’ he adds. ‘A bit of frugality in the three to six months before applying for a mortgage is useful.’
On the show, he also went onto advise a nervous first-time buyer, looking to buy a house with her husband, about the importance of maxing out a Lifetime ISA.
‘Every penny you put in that, you get a penny and a quarter. You get a 25 per cent bonus on that. You should both be maxing that out,’ he explained.
‘The Lifetime ISA lets you buy a house worth up to £450,000. Put the maximum £4,000 a year in it and the state gives you £1,000 a year on top,’ he adds.
Lifetime ISAs took the place of the Help to Buy ISA phased out last year. They are currently available for anyone between the ages of 18 and 39. You can save up to £4,000 a year into them until the age of 50.
Will you be following any of these Martin Lewis mortgage tips?