ARE YOU LOOKING to buy your first home? Whether you’re a young professional or simply planning for the future and trying to be smart with your money, purchasing a home is one of the biggest financial decisions you’ll ever make.
The journey of purchasing a property is not always easy and hurdles can crop up along the way, so it can feel simultaneously exciting and overwhelming. However, if you are a first-time buyer you do have one advantage when it comes to securing a property.
By not already owning a home, you are not part of a property chain. This is attractive to sellers as it means you are not tied down to the sale of your own home before you can move into your new one.
With this in mind, we have compiled our top ten steps to give first-time buyers an edge when they decide to get on the property ladder.
10 STEPS TO HELP YOU GET THERE
1. Set a budget and stick to it
To get a sense of how much you can afford, you should obtain professional mortgage advice. Most estate agents will also require proof of your budget, so having an ‘Agreement in Principle’ from a mortgage lender will help speed up the process. You need to consider what you’re willing and able to spend on your new home.
After you have saved for your deposit and agreed on your maximum mortgage, it is important to stick to your budget. Make sure you set a clear limit and do not view properties above that if you are not willing to haggle with the seller. If you don’t want to dip into any further savings at the beginning, only view properties that you can afford.
2. Apply for a mortgage early
The vast majority of first-time buyers require a mortgage to afford a property purchase. If you get mortgage ready as early as possible, you’ll be in a stronger position with sellers. And, it’ll relieve a little stress from the home buying process. Leave it too late to get a mortgage, and you could risk losing your dream property.
You may find it helpful to speak with a first-time buyer mortgage adviser. They can provide you with a mortgage key facts illustration so you can see the monthly repayments and fees you need to pay.
If qualifying for a mortgage is a bit tight, you may want to investigate getting a joint mortgage with your parents. Their extra income will allow you to borrow more. Alternatively, they could give you some cash to help with the deposit, this is called a gifted deposit.
Having an ‘Agreement in Principle’ ready can help you appeal to sellers looking for a quicker transaction. Not only that, but it will also save you time in the long run.
3. Consider the extra fees
Make sure you are aware of the extra fees that are involved in the buying process. From stamp duty to solicitor’s fees, conveyancing fees, property searches and surveys, it’s useful to know what extra costs you’ll have to pay so you can plan your budget when you’re thinking of buying a home.
These are just some of the extras that you need to be aware of. Be sure to include these in your budget calculations at the beginning so you are prepared for the extra expenses.
4. Instruct a conveyancer early
If you are committed to buying a property, you can instruct a solicitor or conveyancer without having the details. This will put you a step ahead of the rest when you have an offer accepted.
But you should instruct them to start the process as soon as your offer has been accepted on the property you intend to buy. Conveyancing is the process of transferring the legal title of a property from one homeowner to another.
5. Composure while on property viewings
When you find the property that you have been dreaming of, it can be easy to forget yourself. But keep in mind that your reactions may impact you further down the line.
Be positive and interested, but keep in mind that gushing or becoming overexcited will reveal your hand early. This could have a negative impact if you want to negotiate on price.
6. Agents do not work for buyers
This is one of the key points that many buyers do not realise. Estate agents work for sellers. While they accommodate buyers during property viewings, their job is to sell the property at the highest price. Being aware of this will help you conduct yourself during viewings while the agents are assessing you on behalf of the seller.
7. Be mindful of the asking price
When you are looking for potential properties, one of the best tips is to be aware of the asking price. Remember it is a figure that the sellers want from the transaction. Do your research for similar properties in the area to give you an idea of what approximate prices should be. This will prevent you from overpaying in an area where you do not have to.
What to consider before making an offer on a house?
8. Consider government schemes
The government is committed to its pledge of turning ‘Generation Rent’ into ‘Generation Buy’ and there are a number of schemes available to help first time buyers get on the ladder:
- The mortgage guarantee scheme
- Help to Buy: Equity Loan
- Shared Ownership
- Right to Buy
You should find out which one is best for you as it could help you with your purchase. For more information visit www.ownyourhome.gov.uk.
9. Ensure your credit score remains stable
You’ll need a healthy credit history to give lenders confidence in your ability to repay your mortgage. Often, buyers will overlook their credit score when the mortgage process has started. Lenders will revisit your credit file once completion looms so ensure you keep your credit profile stable throughout the process.
Mortgage lenders consider your credit score and earning power, but also your spending habits. Avoid taking out new credit cards or opening any new accounts until the process is over to avoid incurring additional costs.
10. Take out property surveys
When you’re buying your first home, it’s all too easy to get seduced by the look and feel of the place and ignore the shabby chic brickwork or gurgling sounds coming from the boiler. A valuation is often required by a mortgage lender but building surveys and homebuyer reports can reveal more about the property you are buying. They will prevent any nasty surprises and can even help you negotiate the asking price with the seller.
How a property is constructed is also really important. Most homes are build with bricks, or blocks, and have a tiled roof. This is known as standard construction and is accepted by all lenders.
On the other hand, you have properties of non-standard construction. These could include PRC concrete houses, single brick wall houses, steel framed houses or ex-council houses to name just a few. Your mortgage choices will be limited with these properties as they are less desirable for a lender.
Even the proximity to shops can be a problem. Where a home is next to a commercial property, lenders start to get a bit jittery.
