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Top tips for first-time buyers


Buying a house is a huge financial commitment, and one that is renowned for being both time consuming and stressful. However, once the contracts have been signed and the keys handed over, it is the start of an exciting new chapter.

The trials and tribulations of first-time buyers are never far from the headlines, as the property market’s tumultuous past few years has left many people worrying that they will be renting forever. Not to mention, those lucky enough to have enough financial backing to take those all important first steps may still find the house buying process particularly confusing.

Here, we will take you on a step-by-step journey through the entire buying process, helping to ease the burden at this already stressful time.

Saving a deposit

Initially, you need to work out how much money you can put towards the cost of a new property. In general, the larger the deposit, the better mortgage rates you will be offered, meaning your monthly payments will be lower.

As a rule, you need to try and save a minimum of five per cent to 20 per cent of the cost of the property to get a mortgage. With 25 per cent, you could almost certainly gain access to the best deals.

When you decide you want to save for a home, you should start saving as soon as possible, for as large a deposit as possible.

Finding a mortgage

It is very rare that an individual can afford to buy a house outright. Therefore, getting a mortgage is usually an essential part of the process. In short, a mortgage is a loan taken out from a bank or building society that is used to buy a house or an apartment. The borrower has to reimburse the bank or building society for the loan with interest.

When it comes to finding out about the best mortgage deals, a simple internet search can help. It can seem daunting at first, but the more research you do, the better. Simply browse mortgage comparison websites, keep up to date with the latest property market news, and read guides on mortgages to ensure you have all the information you need.

Another way of finding out more about the house buying process is by speaking to friends and family members about their experiences, or dropping into a bank or building society to chat about their latest deals.

Speaking to a mortgage adviser is also recommended, however, this comes with a cost. If you are a first-time buyer, enlisting the help of a professional will help to soften the burden of this complicated process, so is likely to be worth it.

In the wake of the recession, lenders have strict checks in place to make sure that you are able to keep up with mortgage payments - especially in cases where your financial circumstances change, or in the event of an interest rate increase. Therefore, when you attend your first appointment, make sure you take proof of income and outgoings - such as payment slips and household bills - to give a detailed picture.

The type of mortgage you decide upon is dependent on the size of your deposit. In general, the most competitively priced deals are rolled out for individuals with the higher deposits.

Looking at government schemes

There are a number of home ownership schemes available from the government, which can vary between countries across the UK. Details of some of these have been outlined below:

  • Help to Buy - This is ideal for those with a smaller deposit. Here, first-time buyers can buy a home with a deposit of five per cent. The equity loan part of this scheme is only available through newly-built homes worth up to £600,000 in England. Borrowers need to secure 80 per cent of the value of the property through a deposit, and the government will provide a loan for the remainder.
  • Mortgage guarantees - This option is available on new and existing properties that are valued up to £600,000 across the UK. As part of the Help to Buy scheme, this guarantee is provided to lenders on up to 15 percent of the value of a new home by the government. This is set to end in December 2016.

Find out about Stamp Duty

Stamp Duty is the name given to a tax that is paid when purchasing property or land that is over a certain value in England, Wales or Northern Ireland. On April 1st 2015, the Land and Building Transaction Tax replaced Stamp Duty in Scotland. The levy increases depending on the value of the property and is paid on homes worth £125,000 or more and commercial properties and land valued at more than £150,000.

Think about additional costs

There are a number of additional costs to consider when buying a home. For example:

  • A lender will charge you for entering into a mortgage agreement
  • You may be asked to cover the cost of valuing the property - known as a valuation fee
  • It is likely you will need to hire a chartered surveyor to ensure the building is safe
  • You may wish to appoint a property solicitor - or conveyancer - to help you manage the legal side of the purchase. This professional will carry out a number of tasks, which could ease the burden on you

Finding a property

Once you have established a budget, you will be better placed to begin your hunt for an ideal home. Here you should ask yourself the following questions:

  • What type of property do you want to live in - a house or a flat?
  • Would you prefer a new-build or existing property?
  • Are you looking for a freehold or leasehold contract?

Starting the house search is quite simple, with an online search. Signing up for a property alert is another good way of beating the crowd if you are looking in a particularly popular area. Registering your interest with local estate agents could also help you to find the type of home you are after quickly.

If you have found a home you like and have arranged a viewing, you should take a friend or relative with you in order to help you make tough decisions and remind you to ask important questions that you may forget if you fall in love with a property.

As a first-time buyer, you should ask the following questions:

  • Why is the vendor selling this property?
  • Has the existing owner found another property?
  • How long has it been on the market?
  • Have any other offers been made on the property?
  • What is included in the sale?

Putting in an offer

If you think you have found your dream home, it could be time to put in an offer via the estate agent. As a first-time buyer, you will need to provide proof that you can secure a mortgage, but you are in a strong position to negotiate because you are not already part of a chain.

When your offer is accepted, you then need to formally apply for the mortgage. At this point, surveys are carried out on the home you would like to buy. This stage is largely managed by a solicitor.

Exchanging contracts and completion

Your solicitor will commence the legal work associated with transferring the property to your ownership. This will include arranging the Stamp Duty, contacting the Land Registry, transferring the money during the sale and acting as a “middle man” between you, the seller and the lender.

If you would like any more information regarding property sales and purchases, you can contact our licensed Conveyancers by calling 0151 666 9090 today, or by completing the Quick Enquiry” form. Click here for more information.

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