We know the property market can be a frightening place, especially if it’s your first time venturing in to it. The challenge of buying your first home can be a daunting process that it may be tempting to just go with the first house that falls within your price range or just continue to rent. If you’re looking for your first home, it can be difficult to wrap your head around the idea of getting from calculating whether you can afford a mortgage to walking in the door of your first home.
We have put together a guide to help you along the process:
Knowing your monthly budget
The first thing you need to know as a first-time buyer is how much you can reasonably spend on a house. When you decide that you want to buy a home, sit down and go through your monthly expenses and make sure you can afford a mortgage before you jump into house hunting! If you’re not sure where to start, then seeing a mortgage adviser might be the first step for you.
Deposit
For most first time buyers, getting a deposit together is one of the biggest hurdles of getting on to the property ladder. There is no standard amount that people need to have saved up before they can get a mortgage. Mortgage lenders have different requirements and it will also depend on the value of the property you are purchasing. But a basic principle to keep in mind is that the bigger the deposit you have, the cheaper the mortgage deals you will be able to get. But don’t despair if you’re struggling to save a large deposit there are still many mortgages out there for first time buyers as well as help to buy schemes.
Consider the additional costs
There are additional costs to consider when purchasing a property. These include stamp duty, which is payable at rates beginning at 2% on all property purchases priced above £125,000 and possibly mortgage arrangement fees charged by the lender. Again this varies from lender to lender and some may not have them. There will also be legal fees to pay your solicitor, plus charges for a survey of the property and Land Registry fees for registering your ownership of it.
Help to buy schemes
There are tremendous strains on first time buyers to gather together a sufficient deposit. The government have recognized this and have introduced help to buy schemes where you can secure a property with only a 5% deposit. They work by either offering you an interest free equity loan to buy a new build property or by the government part-guaranteeing a mortgage loan to make it less risky for lender to offer you a mortgage. So provided you meet the lenders’ affordability criteria and you have a 5% deposit it may be possible for you to secure a mortgage.
Finding the right property
Be careful to not discard properties on the internet from their potential poor photographs. People often make the mistake of saying they have seen 100 properties where as in fact they have viewed them online rather than actually visiting the property. You won’t get the feel of a property unless you are there. So if it meets your requirements then it is definitely worth a view.
Estate Agents
Estate agents can be crafty, particularly so with first-time buyers, so make sure you see your chosen property plenty of times and at different times before you buy. When making an offer get the seller to take the house off the market to avoid anybody else coming in with a higher offer. Highlight the fact that you’re a first-time buyer and have no chain in your offer. This makes you really tempting to sellers and could close a deal for you over competitors who have a property to sell.
Independent advice
Getting a mortgage is a huge financial step and one that requires much deliberation before you commit. It can be overwhelming to comprehend the lending market and even harder to find the perfect deal for yourself. This is where a mortgage broker steps in. If you’re struggling to get your head around the lending market speaking to a mortgage broker may be the best solution for you.