Home-buying tips for the haves and have nots

For most of us, the extended double bank holiday is rapidly becoming a memory. For the housing market, it may last rather longer.

The bad news for sellers is that experts such as the Centre for Economics and Business Research predict that house prices will remain flat or fall in 2011 and agents report a rise in unsold stock during April.

Meanwhile, lenders are clamping down on affordable interest-only mortgages and toughening up their general lending criteria in an attempt to protect themselves from possible defaults.

On top of all that, analysts predict a fresh mortgage crunch, as lenders attempt to make up for the £300 billion they expect to lose when official support programmes, such as the Special Liquidity Scheme, come to an end from next year.

All this means that, whatever your circumstances, you need to polish up your finances if you want a new home.

If youíre a haveÖ

Owning your home or having a reasonable deposit wonít necessarily send you straight to the top of the mortgage queue. Recent reports suggest that more than half the applicants for some lower-rate, low-deposit mortgages are being rejected, so it is worth trying these tactics before you apply.

ï Look up your credit report -This lists your credit accounts, such as cards, loans and your mortgage, and your repayment record. If you find any errors, contact the relevant lender and get it amended. You can see your Experian credit report for free with a 30-day trial of CreditExpert. Order your Experian Credit Score while youíre at it: if itís less than great, itís best to improve your credit history before you apply.

ï Never skip a repayment – Missed and late payments stay on your credit report for at least three years, so set up direct debits. If there is a legitimate reason for missing a repayment, such as unexpected illness, you can add a note of explanation to your credit file.

ï Get real -Do your sums before you commit to a property and donít overstretch yourself or you could end up losing your deposit and your home.

ï Take care with applications -Simple mistakes, such as missing out an answer, can make the difference between success and failure. And itís best not to apply to several lenders to see what offers you get ñ each application is recorded on your credit report and could make lenders think youíre desperate for money or even that a fraud is taking place.

If youíre a have notÖ

Getting onto the property ladder may seem an impossible dream, especially if you are struggling to find the money for a deposit. The good news is that 90 per cent loan-value deals are on the up ñ but, as ever, you are likely to need a solid financial history. Here are some ideas on how to improve your chances.

ï Keep on top of your credit status -Close any credit accounts you no longer use, especially if theyíre shared with an ex-partner ñ your credit status could suffer if he or she has money troubles. And put together an action plan for reducing your debts, starting with the ones charging the highest interest. Then check your credit report to be sure the changes have been registered. Itís free to see your Experian credit report with a 30-day trial of CreditExpert and you can check your Experian Credit Score at the same time.

ï Save every penny -Go through your income and outgoings to find out where you might cut back, then use price comparison sites, voucher codes and special offers to make less money go further ñ and set the saving aside.

ï Register to vote at your current address-This proves you live where you say you do and is likely to boost your credit rating.

ï Investigate your options -Ask parents or grandparents if they can help with a loan or can guarantee your mortgage, think about buying with friends and look into shared equity schemes, in which a commercial partner ñ usually a housing association or developer ñ retains a proportion of the property you buy. Donít forget the Governmentís FirstBuy programme, either ñ it helps first-time buyers with a loan of up to 20 per cent of the price of a new property and no interest to pay for the first five years.

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