Many people assume that they have not saved enough, or do not earn enough to consider buying a property. If you have ever thought that investing in property is a goal you wanted to achieve but seems out of reach, we have a simple set of steps that will prepare you for your entry into the market.

Credit ratings

The three elements you need to research before your property journey begins are knowing your credit rating, borrowing capacity and the value of equity or savings you currently have. Credit ratings are used by lenders to determine the risk involved in granting you a loan. Credit ratings are usually affected by late or failed repayments on bills and credit cards. If you have a good credit score, you will be in a good position to secure a loan.

Equity and assets

Before looking into loan options, you will need to assess the value of any assets you have, savings and income. Borrowing is based on risk, the lower the risk, the greater your borrowing capacity. A reliable, steady income will assist in you gaining approval for a loan as it reduces the risk of you potentially defaulting on repayments. Your savings and saving history is a good risk reduction metric for lenders as well and works in a similar way. The value of any assets or equity you have will increase your borrowing capacity because it can act as an ‘insurance’ against you defaulting on your loan.

Loan calculators

There are a number of banks and lenders who provide free mortgage calculators. These calculators are an excellent tool to help you understand what your loan repayments are most likely going to look like. You are even able to see what impact interest rates, length of the loan and different loan options will have. Once you know what size loan you will require and are comfortable with the likely repayments, the next step is reaching out to a lender.

Lending options

Securing a loan pre-approval through a lender will answer any final questions on how much you can borrow and any conditions associated with the loan (deposit requirements, interest options etc). There are a number of options available to you such as banks and building societies. But we recommend you use a mortgage broker to give you a better idea of all the mortgage options available in the market. Once you have attained pre-approval, your next step is making an offer on the investment you have been dreaming of.