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First Time Buyers Guide to Buying Your First Home

house keys in front of a new home

First Time Buyers Guide to Buying Your First Home

Ready to take the leap into buying your first home, but don’t know where to start? It can seem like a daunting process, especially as it will likely be one of the biggest purchases you make in your lifetime. To help you make your way through the buying timeline, we’ve compiled the below information to take you through the various steps you are likely to follow.

Where do I start?

Research your desired area

Where is your ideal place to live? Within 10 minutes of work? Within half an hour of your family? Are you looking for good schools, shops or entertainment nearby? These need to be the questions you are asking yourself when looking for where to buy. It is also useful to consider how much leeway you have on this area, and whether you would be happy to move slightly further away from your perfect location to save money or be closer to local amenities. Additionally, look into the average cost of a home in different areas to find out where you can afford.

mobile phone showing google maps on top of a paper map

What can I afford?

To work out how much you can afford to spend on your first home, you need to know how much deposit you have, or how much you want to save. To calculate your affordability, multiply your household income (this is you and whoever you are buying the property with) by 4.5, and then add your deposit on top.

For example:

£30,000 household income x 4.5 = £135,000
£135,000 + £15,000 deposit = £150,000

You can also use our helpful budget calculator to work out your budget.

Other things to consider when looking at affordability is whether you are going to use the government's Help to Buy scheme to help with your deposit, where the government offer you 20% of the value of the property as loan which you pay back interest free for the first 5 years. You will also need a 5% deposit yourself.

piggty bank and coins on a table

Register online

Register for as many online property sellers as you can, as they will each be advertising a range of different properties in your area. They will take your budget and desired location and contact you when something suitable becomes available. They are also likely to show you properties that perhaps you hadn’t thought of, but may be highly suitable.

You can register for our new homes alerts here and get notified when new developments are available in your area.

Buying schemes

Depending on your household income, savings for a deposit and desired location, it may be suitable to look at home-buying schemes to help you buy your first property. These are especially good, and usually tailored to first time buyers to help get a foot on the property ladder. There are many schemes for first time buyers, including Help to Buy and Shared Ownership.

View properties

View as many properties, houses, flats & apartments and maisonettes as you can. Range from terraced to detached see exactly what you like, feel comfortable in and can get for your money. This is especially important so you end up buying a property for a good price, and not overspending on a flat when you could have bought a house. Many companies do virtual and videos tours as well, which is perfect if you are unable to have an in-person viewing.

Go into viewings with a good list of questions to ask about the property, generic as well as specific to you. Important questions could include:

• Is it double glazed?
• Is it freehold or leasehold?
• Does it come with the kitchen appliances?
• Is the heating gas or electric?
• Which council tax band is it in?
• Which way does the property face?

You could also ask to contact the people who are living there currently to ask more specific questions about the property and the surrounding area.

typing on a laptop with pictures of houses

Apply for a mortgage in principle

There are plenty of comparison websites available that will compare mortgages from hundreds of banks and lenders for you, just like comparing car or home insurance. They are a great place to start if you are unsure of which bank is going to be best for you to borrow from. They can also send your details over to the lenders once quotes have been made, making it easy for them to contact you in regards to starting a mortgage application.

Alternatively, visit your preferred bank, either online or in branch, and apply for a mortgage in principle yourself. For this, you will need your most recent payslips, more than one form of ID as well as other personal information for credit checks. Once you have gone through this with the bank, they will give you proof of what you can afford to borrow over a set period of time, including the interest rates and term lengths, with an AiP (agreement in principle,) which you then give to whomever you are buying the property from, whether it be a developer or estate agent. This proves to them that you can afford the property, and will allow them to eventually take the property off the market if you put in an offer.

You can also employ a mortgage broker to help to find a mortgage tailored to you, as it is important that mortgages are tailored to your needs, especially as it is a long commitment.

I've found a property - what's next?

So you’ve found a home that’s in a good location, within your budget, and most importantly that you absolutely love! What’s next?

Make an offer

Make an offer to the seller - this can be lower than the asking price, but be prepared for them to decline if your offer is too low. Bartering is common when making offers for a property, but make sure you are staying within reason.

When they accept, you’re ready to go!

Have a second viewing

Your first viewing of a new home will be full of excitement and you may have forgotten to look for those important things you will need to know about before exchanging contracts. Go to your second viewing with a list of compiled questions that are more relevant to the structure and condition of the property, such as:

• Check the boiler to see the quality and note how it works - is it combi or immersion
• Do the windows and doors open well, are they in good condition
• Are the walls and carpets/floors in good condition
• Is the outside brickwork/siding in good condition
• Check for mould and damp
• Check the water pressure
• Check the internet speed
• Look at the layout - is it suitable for your needs?

At this time, you should be able to take other people along to the viewing, such as parents or other family members.

I’ve had an offer accepted!

Apply for a mortgage

Go back to your bank with whom you got your mortgage in principle and state that you’d like to apply for a mortgage. Your mortgage broker or bank teller will help you throughout this process. Ensure that you understand the entirety of what you are borrowing, the interest rates, and how much you will pay back over the length of your mortgage - usually 25 to 40 years. Ask if there are any fees, and whether it’s better to pay these upfront, or have them added to your mortgage. This is vital to ensure you are not overspending, or are landed with surprise bills.

property survey

Conveyancers and Solicitors

Solicitors handle all the legal business that surrounds the buying and selling of the property. They will look at planning and local issues and be in contact with the council about anything that might affect the value of the property, as well as handle things like leasehold fees, legal fees and property searches.

Conveyancing simply means the transfer of property from one person to another, and will act as the middle-man between your mortgage lender and the seller. They can also survey the property for structural issues such as subsidence, where the house is built on sinking ground, causing the floors to move and potentially crack.

Most estate agents and property developers will be able to recommend solicitors for you to use, but you can also shop around to see what each solicitor will offer you and for what price. There are many comparison sites that will compare your local solicitors for you.

Get a property survey

Solicitors will ensure that there are searches done on the property, but this will not include structural surveys. Property surveys help to assess the condition of the building and detect structural problems. They are optional, however it is very much in your best interest to get a survey done to avoid running into problems with the building when you have already bought it that might be very expensive to fix.

It might be the case that the survey will enable you to offer a lower price for the property, as issues may come up that you will have to pay to fix.

Finalise your mortgage

Once you have decided on the amount you are borrowing along with how much deposit you are putting down, whether you are going with a fixed or variable rate, the length of your mortgage and any insurance, your lender will allow you a short period of time to decide whether the mortgage is 100% right for you, and give you the chance to pull out. Once finalised and contracts are signed, this is binding until the first term of your mortgage is finished, usually between 2-5 years.

Exchange contracts

Upon no delays or final problems, you and the seller sign your own and each other's contracts through your respective solicitors and the sale is now final, meaning neither party can now pull out. Your solicitor should go through the contract with you to ensure all details are correct and make sure you are happy with how the property will be left once the sellers vacate. At this point, you will also need to pay your deposit.

hand holding a set of house keys

Completion

You’re ready to move in! Once all your fees and bills are paid, you have bought home insurance and made plans to vacate your current property, you can begin to start the moving process. This is likely to include:

• Hiring a removal company
• Moving your bills over to a new property or starting from scratch
• Redirecting your post
• Make sure you have internet and TV license if necessary
• Ensure all water, gas and electric is turned on

Remember to ask those around you for help as well! Your developer, estate agent, family and solicitors are all there to help!

Think you’re now ready to take the plunge? Start your search today!

 

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