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First time home buyer guide

06 September 2022

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So, you’ve decided to get onto the property ladder. Buying your first home is very exciting however it can seem overwhelming; but that’s ok there are plenty of experts out there who can help!

Read on to find out what each step entails and the questions you should be asking before you begin your search.

First things to think about when buying your first home

Where do you want to live?

The area or neighbourhood you want to live in should be one of your first decisions. Even if you already have somewhere in mind and an idea on the kind of property you like, do some exploring and be open-minded.

What to consider…

  • Your daily commute and transport links
  • Do you need to be close to family?
  • Does it work for your social life?
  • Nearby schools
  • local shops and leisure facilities

What type of property?

  • Apartment, terraced, bungalow, detached or semi-detached?
  • New build or older?
  • How many bedrooms do you need?
  • How important is a garden/outdoor space?
  • What about a driveway or garage?
  • How much storage space do you need?
  • Do you need space to work from home?

Freehold or leasehold?

Whatever style of property you buy, you’ll need to find out whether it’s freehold or leasehold.

·       Freehold means you own the property and the land the property stands on.

·       Leasehold means you own the property but only for a certain amount of time. Ownership of the property goes back to the landlord at the end of the lease. Most flats are leasehold - it’s worth checking how long is left on the lease and if it’s possible to buy the freehold.

How much can you afford to borrow?

Lenders need to know much more about you than just your salary before making a decision on how much they’re willing to lend by way of a mortgage. The lender will look closely at your financial history and existing commitments before making a decision. This is done for every mortgage application.

Before you do anything else in your search for a home, speak to a Mortgage Consultant. They take a look at your finances and advise you on your mortgage options (subject to the lender status and criteria).

Your deposit

Very few lenders require no deposit, so you may need to raise at least 5% of the value of the property to secure a mortgage with lenders.

That means if you were buying a £200,000 home you’d need to raise at least £10,000 before applying for a mortgage. Typically home buyers provide a 10% deposit.

If you raise a larger deposit, you might gain access to mortgage products with lower interest rates, which could potentially result in lower monthly repayments.

Speaking to a Mortgage Consultant early on is advised as it can improve your chances of having an offer accepted by a vendor. This is because you will have what is known as a Mortgage in Principle – this essentially lets vendors know that you can afford to purchase their property.

There are lots of different types of mortgage products available, and the right one for you depends on your circumstances. Our Mortgage Consultants can help you choose a mortgage product that suits your circumstances (subject to status and lender criteria). Get in touch with your local Mortgage Consultant here.

Tips on property viewings

Now that you know where you want to live, the type of property you wish to live in and what you can afford, it’s time for the fun part – viewing properties!

Buying a property is a big decision and the most expensive purchase you will ever make. You may not get all the information you need in one viewing, so it’s best to visit more than once if possible – and ideally at different times of the day and week. That way you’ll get a better idea of the traffic and the neighbourhood.

Once you’ve found your dream home, your estate agent will help you to make an offer.

The legal side of buying a property

Things could move quickly once you find the right property, so it’s a good idea to think about choosing a conveyancer early on. When you have an offer accepted and proceed with your mortgage application, the next step is to finalise the legal details.

Conveyancing is the legal transfer of a property from one person to another. It includes all the legal work plus a variety of important searches and checks on the property.

Don’t worry if this part confuses you. Your estate agent will be able to explain everything that’s involved and even recommend a local conveyancer for you to use.

What fees will you need to pay when buying a property?

Although there are some mortgage products without fees, some do have costs. Your Mortgage Consultant will discuss these fees with you.

Here are some fees you may incur to secure your mortgage with a lender*

Arrangement fee - Paid to the lender for arranging your mortgage.

Booking fee - Usually charged upfront, it reserves the mortgage you have been offered while your application is being processed.

Valuation/survey fee - Pays for the valuation/survey carried out on the property.

Legal fees - Costs incurred by your conveyancer for the legal work required for a mortgage.

Broker fee - A one-off fee payable to your Mortgage Consultant for sourcing your mortgage.

Administration fee - Payable to your Mortgage Consultant for handling your mortgage application.

Stamp duty - This is a one-off fee that buyers have to pay the government on properties worth over a certain amount. Depending on the property value, you may be exempt from stamp duty as a first-time buyer. We can tell you about this, or you can check the government website for current thresholds.

Exchange of contracts

Throughout the transaction, you may have been working towards a completion date (the date you will become the legal owner of your new home).

Once your conveyancer is happy that all of the legal work has been completed, they will propose that you exchange contracts. Upon exchange of contracts, your commitment to buy your new home on the agreed completion date will be legally binding.

Final questions for the seller

Here are some helpful questions to ask the seller before you take ownership…

• Where are the gas shut-off valve, water stopcock and fuse box?
• Locations of gas, electricity and water meters?
• Is there drain access or a manhole on the property?
• How does the boiler/thermostat work?
• Do they have all user manuals and warranties you might need? If not, can you download copies?
• When are the bins collected? (You can also find this on your local council’s website)
• Could you visit the property again before completion to measure up for carpets, blinds, curtains and furniture?

 

Buying your first home doesn’t have to be stressful. Ensure you choose an experienced agent who can guide you through the whole process and take you through each stage step-by-step.

 

 

*The total fees payable will depend on the lender

ALL MORTGAGES ARE SUBJECT TO STATUS AND LENDER CRITERIA

A BROKER FEE MAY BE PAYABLE UPON MORTGAGE APPLICATION AS WELL AS AN ADMINISTRATION FEE. THE TOTAL FEE PAYABLE WILL DEPEND ON YOUR CIRCUMSTANCES. YOUR MORTGAGE CONSULTANT WILL EXPLAIN ANY FEES APPLICABLE IN YOUR INITIAL APPOINTMENT.

YOUR HOME OR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.

Information correct at time of publishing 14.2.23. MS/SQ/6283/08.22.

 

 

 

 

 

 

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