5 top tips for first time buyers
1. Vital steps in buying a property
Find a property you can afford. Check out Inspired Homes affordable houses, alternatively estate agents and the mortgage calculators on the internet can help with this. Click here for a useful links to estimate mortgage costs.
Make an offer. Once you have found and viewed a place you like make an offer on the property
Arrange a solicitor and surveyor. Solicitors handle the legal work around the property and the surveyor will survey the property to check for potential problems.
Finalising the offer and mortgage. Renegotiating prices, finalising your mortgage
Exchanging contracts. This is where your solicitors check details are correct. At this stage you and the seller are committed to the sale.
Completing and moving in. Once the sale is completed you will have to pay the remaining money you owe, i.e. mortgage, solicitor fees, stamp duty. Now you are ready to take the keys to your new home!
2. How much deposit do I need to buy a house?
You will need to start saving for a deposit. Generally, you need to anywhere between 5% and 20% of the cost of the home you are looking at. Properties priced at £250,000 will require a deposit of at least £12,500 – similarly the more you save the easier it will be to apply for a wider range of cheaper mortgages.
3. Applying for a mortgage
Mortgage lenders want to know that you will be able to repay your mortgage. In order for you to have a mortgage approved you will need to prove your income and show evidence of outgoings, including debts, household bills. Expect lenders to ask for payslips and bank statements, if self-employed you may be asked to present tax returns and business accounts. Click here to see more info on how to apply for a mortgage.
4. Remember other costs of buying a home on-top of mortgage repayments
As a first-time buyer it is important to be clear about the financing of your first purchase. The process applying for a mortgage can be rigorous, where the lenders check you can afford the mortgage and your ability to afford monthly mortgage repayments. With all the focus on mortgage don’t forget to budget for other additional costs such as:
-Stamp duty tax (depends on the value of the property – check brackets here)
-Lenders arrangement fee (circa £1000)
-Solicitor fee’s (circa £1500)
-Survey fees (circa £500)
-Removal costs (circa £0-£500 )
-Service charge (depending on property circa £100p/m)
-Initial furnishings (at least £2000)
(These are costs are estimates aimed to be indicative)
5. Know the difference between freehold and leasehold
When buying a house you will either be buying a freehold or a leasehold. Buying a freehold means you own the land and the property outright. Included in this is the responsibility for maintaining the property and land. A leasehold is typically what you purchase when buying a flat, this means you own the property and the land for as long as the freeholder has agreed. It is important to take into account how many years are left on the lease as this can affect you getting a mortgage.