Buying your first home is one of the most exciting things any of us will do, from initial house-hunting to being given the keys. It can also be incredibly stressful if you are not properly armed with the right information. There are many things to think about, such as the different mortgage types and putting down a deposit. Jumping into a mortgage without getting advice and being certain of your choices can have disastrous consequences and leave you unhappy with your first home.
Luckily, we’ve put together a first-time home buyer guide, packed with all the guidance you could need so that you can find your dream home. Buying a home does not have to be rocket science: by following our top tips and tricks, you can be sure to find a property you love, with mortgage payments and a deposit that suits you. Keep reading as we guide you about how to navigate the property ladder as a first-time buyer!
What to consider when buying your first home
How much deposit do I need to buy a house?
You will generally need around 5% of the house’s total cost, leaving you with a 95% mortgage to pay off. For example, if you are looking to buy a property that costs £450,000, you will need to put down £22,500 as a deposit.
If you have more money that can be put down as a deposit, we recommend doing this, as the larger the deposit, the lower the interest rates on your mortgage.
If you cannot save 5% of a mortgage for a deposit, this does not mean you won’t move into your dream house. There are many government schemes for first-time buyers, requiring you to put down a 5% deposit.
Budget for the other costs of buying a home
Many first-time buyers make the mistake of only budgeting and saving up for their deposit, but there are many other costs that you need to factor in.
The upfront finances involved with buying a house include, but are not limited to, stamp duty and land tax, valuation fees, survey fees, legal fees, and removal service costs. These costs will depend on things such as the location of the property and its mortgage size.
As for ongoing costs, this will be made up primarily of insurance, utility bills, council tax, and maintenance and repairs.
In terms of insurance, most buyers choose to invest in contents insurance, which protects your belongings in the event of a burglary. Life cover allows for mortgages to be paid off no matter what happens to the homeowner.
Make sure you can afford your monthly repayments.
Before embarking on the journey that is buying a home, be certain that you can afford all the costs, including monthly repayments. When purchasing your home, the mortgage lender will check that you can afford mortgage payments, and you will be asked to prove your income, as, without a steady income and savings, you will struggle to make ends meet. The best thing to do is create a thorough budget that details your monthly outgoings and incomings, not just regarding your house but all bills or regular expenses.
If you choose to let us guide you through your mortgage application and the home-buying process, then we can give you more information on how you can be sure to afford your monthly repayments. We will budget for you and tell you how you can afford to spend each month on mortgage payments and ongoing costs like bills and tax.
Affordable home-buyer schemes to get you on to the property ladder
Several schemes run by the government that you can get involved with if you are looking to make your way onto the property ladder.
First are shared ownership schemes, an amalgamation of buying and renting, created to give first-time buyers a helping hand. Rather than owning an entire home, you will own a portion of it up to 75%. If you are not making enough money to buy a whole property, this is a great option, as you can buy bigger shares as you begin to earn more.
Next up is the help-to-buy housing scheme. For homebuyers who cannot put down more than a 5% deposit, the government will lend you 20-40% of a house’s purchase price, interest-free for 5 years. If you are based in London, this can be particularly useful as you can borrow nearly half of your first home’s buying cost.
Finally, the right-to-buy scheme allows those who rent their home from the council to purchase it at a discounted rate. The discount size will depend on where the property is located and the type of property it is.
How Mortgage Saving Experts can Help you find and buy your First Home
Here at Mortgage Saving Experts, we are committed to helping first-time buyers make the property market work for them. Get in touch with us before striking up a deal with mortgage lenders or your bank, as we will get you the best deal and make sure that your payments are suited to your income and circumstances.
We guide homebuyers through each step of the mortgage process, from breaking down mortgage fees to figuring out the best mortgage term. If it is your first time purchasing a property, then the whole experience can be confusing, and there is a lot of room for mistakes to be made. By coming to Mortgage Saving Experts, we eliminate the risk of error and do all the hard work for you!
Finding a Mortgage
There are many kinds of mortgages out there, and you must find the right one to suit your budget and lifestyle.
One of the most important things you can do to secure a good mortgage is by having a good credit score. This means keeping on top of bills to your credit cards, regularly checking your credit scores, and paying off any outstanding debts you may owe.
The two main types of mortgages out there are fixed-rate and variable-rate. A fixed-rate mortgage means that the interest rate you are charged stays the same regardless of changes to interest rates, typically for a period of 2-5 years. On the other hand, a variable-rate mortgage means that the interest you pay is subject to change depending on how the average mortgage rate fluctuates. If you go for a variable rate, then make sure you have savings and enough money for payments to increase with little notice.
There are advantages and disadvantages to both types of mortgage, which is why we advise speaking with a mortgage broker before making a decision, as we can assess your income, run a credit check, and make recommendations based on what you can afford.
What is a Mortgage guarantor?
When a family member or parent acts as a guarantor and takes on some of the responsibility of a mortgage, if a first-time buyer cannot afford to make their monthly repayments, the guarantor will step in and cover the payments. Another description of this mortgage is “joint borrower sole proprietor”.
A guarantor mortgage is a type of home loan where the guarantor offers their assets as security. In some mortgages, these assets can be used instead of a deposit. For some prospective buyers, this is the difference between getting a mortgage and not allowing them to purchase a higher-priced property than they would otherwise be able to.
Being a mortgage guarantor is not without its risks, however. If the person buying a house stops being able to meet their payments, the guarantor becomes responsible, which can be a big burden and is not something that everyone is willing to do.
What’s more, not all mortgage lenders offer a guarantor option, so it is best to do your research about which mortgages offer this if it is an important factor.
The mortgage application process
Speak to one of our Expert Mortgage Brokers Today
The mortgage application process is lengthy and contains a lot of information. We strongly recommend speaking to one of our brokers, who are experts and will help you find the best mortgage deals. No matter what part of the mortgage process you require assistance with or information on, we have specialists and guides that will break it down for you.
The services of mortgage brokers are there to be used and can save you a lot of time, money, and hassle. Our consultations are free of charge, so why not get in touch today and see how we can help you as a first-time buyer?
Start your Mortgage Application with us
There is a lot to think about when buying a home, particularly if it is your first time doing so. To make the process a little easier, entrust us to guide you through your mortgage application.
Work out your budget and any requirements you have before coming to us, then feel free to book an appointment. We can help you find the best plan by using our mortgage calculator to figure out how different mortgage deals will impact your monthly payments.
If you are buying your first home using an affordable home-buyer scheme, we can also help you. Applying for mortgages through a scheme requires a lot of paperwork that our mortgage and finances experts can make much easier for you.
Finding your ideal home
Finding the perfect property requires a fair amount of work. Firstly, you should consider which area you want to live in. For example, if you are looking to buy your first home in London, do you want to be central or further out in a residential family area?
When choosing your area, make sure that it has everything you need, whether proximity to the workplace, low crime levels, or good transport links. Once you know which area you want to move to, register with a local estate agent.
This costs nothing and will not place any pressure on you, and it simply increases the number of properties you will see, therefore increasing your chances of finding one you love!
When searching, you should also have a list of requirements, such as whether you are willing to make substantial home improvements, how many bedrooms you need, which amenities are important to you, and so on. It is worth having some flexibility in these requirements so you can widen your search and be certain you find your dream home.
Freehold or leasehold
Before buying your first home, you should consider whether you want to purchase a freehold or leasehold.
A freehold purchase means you will have ownership of a home and the land it is built on, as well as responsibility for any maintenance or repair work. Owning a leasehold property is not a shared ownership scheme.
A leasehold is when you only own property for the time that your lease with the freeholder dictates. This will be the case for most flats and some houses, meaning you will own the property itself but not the land it sits on. Before buying into a leasehold, there are a few things you must consider, such as your budget for services and whether the length of the lease works for your plans.
You are responsible for maintenance and repair costs, so this is incorrect. Paying a service charge does get the cleaning of communal areas and some repairs. Still, if the property needs a new roof, then all of the leasehold properties within the building need to pay the bill together to replace the roof. This can get very costly.
House viewing tips
Many people walk into house viewings with no idea what they should be looking out for, leading to problems further down the line. Follow our guide, and you will not have to worry about any nasty surprises!
The most important thing is to visit properties in person, rather than virtually. You must get a feel for the home and surrounding area.
There is only so much you can gauge from looking at photos on a website: to understand the property and its potential, you must see it with your own eyes.
Another valuable piece of advice is to put together a checklist before viewing any properties. This list should entail all the things you need out of your first home, such as multiple bathrooms, natural light, or parking.
This is not to say that your chosen home has to tick every single box, but it will stop you from getting side-lined and make sure you do not forget anything. There may be compromises you may have to make such as location or number of bedrooms etc.
Making an offer
Making an offer is one of the most exciting parts of a move, but it can also be daunting.
If the property you want has a lot of interest, then putting in an offer below the asking price will likely be unsuccessful and you should be prepared to pay either the asking price or slightly above.
If you are unsure of how much to offer, a good way of finding an estimate is to see how much similar properties in the area have sold for. This way, you can justify your offers to the Estate Agent and be certain that you are not paying excessive amounts.
You want to convince the Estate Agent that you are the right person for this house, which means mentioning anything that works in your favour. This could be your credit score, the fact that it is your first time buying, or your ability to put down a higher deposit.
Checklist for moving house
4 weeks before moving:
- Organise removals
- Begin packing your things
- Inform your utilities of the move
- Inform Royal Mail that your post will need to be redirected
1 week before moving:
- Request final telephone and utility bills, e.g. energy bills
- Let all necessary people and businesses know that you are moving
- Begin a plan for the layout of your new home
On moving day:
- Make sure you have not forgotten anything
- Turn all appliances off
- Keep all necessary belongings with you, such as toiletries or food items.
Get in Touch Today
If you’re looking for a first-time mortgage, speak to one of our mortgage saving experts today. You can either enquire online or give us a call on 01273 738072 for a free-no obligation chat.