As we approach the end of 2024 and look to the new year, those with property ambitions will need to ensure they’re in the strongest financial position and have the best route onto the property ladder - especially when asking prices are still at record highs. Whether you’re a first-time buyer, a next stepper or a downsizer, early preparation is key.
Here Together shares some practical tips to help you achieve your property goals in 2025.
Assess your financial health
A strong credit score is important when getting a mortgage, but even those with blips on their records can secure mortgages with the right approach, so if this is you, don't panic!
Research from our Residential Property Market report revealed that over half of those with a blip on their credit record don’t think they’ll own their first home by the end of next year, so it’s worth checking your credit score in advance of applying for a mortgage. Experian offers a simple way to find out whether you’re at risk of being rejected. It’s also worth speaking to specialist lenders who will consider applicants who may have missed paying a bill or even had a County Court Judgement (CCJ) against them, as long as a clear repayment plan has been set up.
If you are rejected, it is not necessarily the end of the road for your mortgage application. You need to get a further understanding of your credit status and see what measures you can take to improve your rating before re-applying.
Get your documents in order
Whether you’re the organised type with a dedicated filing system, or the more common ‘drawer stuffer, worry later’ type, the new year can provide a great opportunity to get your paperwork in order. As lenders require detailed proof of your financial standing - including income, employment status, and any debts or expenses, it’s a good idea to have the necessary documents ready before you start shopping around so you can move quickly and smoothly when the time comes. Our research revealed that the most challenging part of applying for a mortgage was the time spent gathering relevant information, so start now to save you time and stress!
For those who are self-employed, high street lenders will require at least two or three years of information to prove income over that period. This can prove tricky for people who, for example, may have just started up their own business or for people such as freelancers, company directors or consultants, whose income may not be paid into their bank account on the exact same day every month.
Look into alternative ways to get on the ladder
First time buyers must remember there are a multitude of avenues to choose from when hoping to get onto the property ladder sooner. For example, since August last year, Together has seen a 23% increase in volume of Shared Ownership mortgages we’ve provided finance for. These can be a great alternative to allow buyers to purchase a percentage of a property and pay rent on the part they don’t own, usually to a housing association. First time buyers would buy a small share of the home now and buy more shares at later stages – known as ‘staircasing’ - usually until homeowners own it outright.
Understand your current mortgage terms and whether you can do better
If you already have a mortgage, it's important to review and understand the terms, especially ahead of a possible remortgage to ensure you’re always getting the best deal. It’s a good idea to be aware of what your current interest rate is, the term (i.e the length of the mortgage) and crucially, if fixed, when this is due to end. If your deal is coming to the end of its term in 2025, it’s recommended to start the remortgaging process at least six months before your current deal ends. The earlier you plan ahead the less chance of you having to opt for your lender's Standard Variable Rate (SVR) which is usually higher.
During this process, you may also want to review your financial situation to see if your circumstances have changed since your first mortgage. If you’ve had a pay rise or improved your credit score, you may be eligible for a more competitive rate.
Speak to a specialist lender
The way we work and live has changed significantly over the last couple of years, especially since Covid. As such, many people no longer fit into the traditional mortgage applicant mould, and find themselves locked out of the mainstream mortgage market.
If you are a ‘non-standard’ applicant, i.e. self-employed, have adverse credit or have unique financial circumstances, specialist lenders like Together may be able to help. It’s always good to speak to a professional financial advisor who can take your whole financial situation into account, and help you find the best solution for your individual needs.
