Clambering your way onto the property ladder and buying your first home can feel like an overwhelming and impossible task. However, if you’re equipped with the right information and you know where to start, it will feel a lot more achievable.
Purchasing your very first home is a big, big deal. If you know where to find a mortgage, how to apply and what you can do to improve your chances of success, you’ll be in a stronger position to achieve your goals. That’s why today, we want to share with you our step-by-step guide to buying your very first home. So, without further ado, here’s everything you need to know as a first-time buyer.
1/ Buying your first home? You’ll need to save your deposit
Typically, you will need to save a deposit of at least 5% of the price of your desired property.
For example, if you were looking to buy a house worth £200,000, with a 95% mortgage, you would put down £10,000 as a deposit and borrow the remaining £190,000.
If you can wait a little longer, it pays to take your time and save more. This is because a larger deposit will enable you to apply for mortgage deals with lower interest rates.
2/ Find out how much you are able to borrow
Various factors, including deposit size, income and credit score will impact how much a mortgage provider will be willing to lend you.
If you are buying a property alongside other people, their finances will also be taken into account.
Most lenders will allow you to borrow a maximum of approximately four-and-a-half times your annual salary, although this can and will vary depending on your personal circumstances. To get a ballpark idea, you can use online calculators, such as this one.
3/ Apply for a mortgage agreement in principle
A mortgage agreement in principle (AIP), also known as a decision in principle (DIP), is a confirmation from a lender that they would be willing to lend you a certain amount towards your home, principally speaking.
Having an AIP is not required, but it will serve to make you a far more attractive buyer. This is because it shows the seller and their estate agent that you will be able to secure the required amount of money. Here at The Mortgage Brokerage, we can help you to secure an AIP.
4/ Register with estate agents and view properties
By registering with local estate agents in your chosen area, you may increase your chances of finding your perfect home.
Registering is free and doesn’t make for any obligation on your part. However, it’s definitely worth your while, as agents often contact registered buyers before they list properties online.
As well as registering with estate agents, you’ll want to start viewing properties in person. In doing so, you’ll be able to get a feel for a property and its character.
Once you find somewhere you like, go back several more times, perhaps striving to visit at different times of the day. This way, you’ll get to know the house a little better, and perhaps identify any potential issues, too.
5/ Found the one? Now make an offer!
Once you’ve found the home you’ve been looking for, it’s time for you to make an offer.
This can be a little daunting, and it’s hard to know exactly how much to offer. Whilst it’s common to offer below the asking price, it all depends upon the individual property at the end of the day. If it’s particularly desirable and other people are interested, you may need to offer the asking price or perhaps more.
When you make your offer, mention any notable points that position you favourably. This is the perfect time to place your status as a first-time buyer on the table, as this makes you a chain-free candidate and opens up the potential for a quicker turnaround time.
In order to reduce your chances of being gazumped, you may wish to say that your offer is subject to a survey and to the property being withdrawn from the market.
6/ Apply for a mortgage!
You’ve made it this far, now it’s time to secure that all-important mortgage. This is where we come in!
Of course, you can apply for a mortgage on your own, and many people do. Working with a mortgage broker, however, will enable you to access the full spectrum of deals on the market, and make a decision that is truly in your own best interests.
With so many different types of mortgages out there, it gives you a great advantage to benefit from the professional guidance and advice offered by a broker. This is particularly true for first-time buyers, who are entirely new to the whole process of securing a mortgage!
7/ Find a conveyancer or property solicitor
Once your offer is accepted, conveyancing is the legal process that takes place.
Conveyancing involves carrying out searches, drafting up and checking over contracts, dealing with the Land Registry, and paying any stamp duty. If you’re a first-time buyer, you are only required to pay stamp duty if the property you are purchasing is priced above £425,000.
8/ Consider getting a house survey
A house survey is not mandatory, but it does come highly recommended.
House surveys are intended to assess the condition of the building and detect any structural problems. Whilst they’re optional, it’s preferable to be made aware of any issues before you exchange contracts.
If any issues are found, you can consider negotiating the purchase price down, or asking the seller to address the problems.
9/ Arrange your home insurance
Buildings insurance is an absolute must. In fact, a large majority of mortgage providers will outline this as a condition of lending.
Here at The Mortgage Brokerage, we don’t just handle mortgages, we take care of insurance, too. So, we can find you the very best deal on your home insurance, as well as find you the most competitive mortgage deal.
10/ Exchange contracts and move in!
Now comes the time to finally exchange contracts.
This is the time when the buyer’s and seller’s legal representatives swap signed contracts and the deposit is paid. Once this is done, the agreement to buy is legally binding and the chances of anything falling through are close to zero. So, you can take your foot off the pedal and relax a little!
Once deeds have been transferred, you’re free to start the process of moving in and settling yourself into your very first home of your own!
Whoop!
Are you a first-time buyer looking to secure a mortgage? We can help. Simply get in touch today.
