Buying your first home can be as challenging and daunting as it exciting, and is probably the single biggest investment you’ll make. If you are dreaming of the day you get your first set of keys to your new home, and are already planning your moving in party, our tips for first time buyers may help in your transition from dream to reality.
Deposit
Before looking at properties, you need to save for a deposit and generally, you need to try to save at least 5% of the cost of the home you’d like to buy. For example, if you want to buy a home costing £150,000, you’ll need to save at least £7,500 (5%) for the deposit. Saving more than 5% will give you access to a wider range of cheaper mortgages available on the market and a lower interest rate, but is not always easy to achieve.
There are a range of schemes available to help first-time buyers to help you get on the housing ladder, particularly if you only have a small deposit, including the Lifetime ISA, Help to Buy, Right to Buy and Shared Ownership.
Check and strengthen your credit
Your credit rating not only affects whether your mortgage application is successful – it influences how much your monthly repayments will be, too. That’s why it’s essential to improve your credit score before you apply for a mortgage.
The best way to understand your credit report is to see it for yourself. You can request your report from the three credit referencing agencies (Experian, Equifax and TransUnion). Making sure your information is correct is the first thing and checking any financial links to other people along with trying to lower your use of unsecured credit to below 50% is a good starting point.
Mortgages
When you’re ready to start viewing properties it’s a good idea to get a mortgage agreement in principle from one or more lenders. This will give you a good idea of how much you can borrow. Before going ahead with an agreement in principle application check whether the lender will carry out a credit check as this will usually appear on your credit file.
An agreement in principle is generally valid for between 30 and 90 days and is an estimate rather than a guaranteed mortgage offer.
Additional costs
Apart from your monthly mortgage payments, there are others costs when buying a home. These include:
– survey costs
– solicitor or conveyancer fees (this often includes extra costs, such as search and land registry fees)
– mortgage arrangement and valuation fees
– removal and moving in costs
– buildings insurance
– initial furnishing and decorating costs
– stamp duty
Here at Emma’s Properties we can assist you from start to finish and for further information on tips for first time buyers and anything else relating to purchasing a new home, selling or letting a property please contact us here.
