Buying your first home can be an exciting and overly stressful time. Navigating the buyers market as a newbie can be overwhelming, to say the least. Knowing what to ask, negotiating the house buying process and what you need to do isn’t a natural process, but doing your research beforehand can help you be more aware of the process and your responsibilities as a first-time buyer.
But the main side of getting a mortgage is having the right funds in place to be able to afford what is likely the biggest purchase you will make in your lifetime.
Deposit.
Recent news that 95% mortgages are back on the table for buyers can be an attractive incentive for people who otherwise wouldn’t be able to get a foot on the ladder. However, it is still best to ensure you have a sizable deposit behind you. A minimum of 10% of the cost of the property, 20% is desirable, with recent figures suggesting that the average family needs to save for 12 years to afford a deposit for a house. So, in reality, it is never too soon to start saving.
Mortgages
It is recommended you have your mortgage in place before you start looking for your home to avoid disappointment if you cannot obtain a mortgage or cover the cost of the house you want to buy.
Ask around family and friends and contact banks and building societies to see what mortgages they offer. If you are after a fast and headache-free mortgage application process, it could be worth working with a mortgage broker to help you see what options are available and do the work for you on your behalf.
There is a vast array of mortgages and mortgage options available, so finding the right one for you can take some time as you weigh up your options.
Other Costs
Buying a home can be expensive, and it comes with various fees as part of the process.
The lender would almost certainly charge an arrangement fee for entering into a mortgage agreement. These are frequently very high for lenders to keep the headline rate, enticing you in – as low as possible.
You may also have to pay a valuation charge to cover the expense of determining the value of the property you want to buy.
Once you’ve found the house you want to buy, make sure it’s structurally sound before signing on the dotted line. A survey’s price varies depending on how comprehensive it is. However, in the long run, it can save you money on repairs and maintenance.
It’s also a good idea to hire a land solicitor, also known as a conveyancer, to handle the legal aspects of the transaction. While it might be tempting to do it yourself, they will draught the contract, negotiate with the Land Registry, and handle Stamp Duty fees. Land Registry fees, including Stamp Duty, are calculated based on the value of your home.
Other costs can include moving costs, decorating costs, buying furniture etc., which can add up and is worth considering and factoring into how much you save up before you apply for a mortgage.
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