Stepping onto the Property Ladder
MyEquifax Offers Advice To First Time Buyer
London, May 14th, 2004 – It is well reported that first time buyers are struggling to get on the first rung of the property ladder and many are turning to family to help them achieve their dream. With a first mortgage being a particularly heavy financial burden, MyEquifax is advising that it is more important than ever for first time buyers to get a copy of their credit report before shopping around for a mortgage deal. As with the case of 22-year-old Claire Foster from Surrey, this will provide a valuable insight into all their existing credit commitments, and help them understand some of the key factors that a lender will take into account when they make a mortgage application.
Claire Foster graduated in 2002 and, after working abroad for a short period of time, she returned to the UK with her partner and now wants to get onto the property ladder. Crucially, Claire’s credit history is central to her and her partner getting a mortgage because he is not a British citizen and therefore they cannot make a joint application.
So one of the first steps Claire took in planning for her new home purchase was to get a copy of her credit file from MyEquifax. This showed that she had kept up to date with her credit cards, store cards and two mobile phone contracts.
Claire says, “Like many students I didn’t keep a close eye on my money and spent most of the time juggling my finances by using credit cards. As I wasn’t completely sure of my credit status I applied for a copy of my credit file. To my relief I had kept up to date with all my credit repayments.”
Claire approached two of the UK’s leading mortgage providers, with whom she and her family have had long and positive relationships. As her partner is a non UK citizen and cannot have a mortgage in his name, Claire enquired about a guarantor mortgage. As both lenders required deposits of over 10%, with one asking for as much as £18,000, this proved to be outside of her budget. The alternative was that Claire applied for a joint mortgage with her father which only required a 5% deposit.
Claire concludes, “As my partner can’t apply for any credit it is essential we keep my file in good order. I have to commute a long way to work every day and need to upgrade my car. We will also have to buy new household items such as the washing machine and sofa. Ordinarily we would save up for these items yet we have to save for a 5% deposit, surveys, solicitor fees as well as keeping some aside for emergencies – so credit will be an important factor over the next few months. Knowing that I can access my credit file instantly online gives me the peace of mind that I can keep track on my credit status, and know how lenders will view it when I make new credit applications.”
Neil Munroe, External Affairs Director for Equifax, says, “Many people like Claire graduate with large debts. It is important however that people in Claire’s position don’t financially over stretch themselves as it could lead to serious problems. This case demonstrates the necessity of knowing all of your current and previous financial commitments to make realistic financial plans for the future.”
Equifax advises consumers to regularly obtain their credit file to monitor their credit commitments. This can be done online at www.myequifax.co.uk. For just £8.25 consumers can obtain a copy of their credit file instantly, online.
ENDS
May 2004
