Buying your first home is a huge step, and it can be a stressful process. However, the more planning and research you do, the smoother your journey will be. Here are a few tips to help you take your first steps on the property ladder.
Work out what you can afford
One of the biggest hurdles for first time buyers is saving up for enough deposit to put down on a home. You will typically need at least 5% of the property’s value, although there are various schemes designed to help first time buyers. The average deposit is about 10%. The larger the deposit you can save, then the lower your mortgage repayments will be.
The amount you can borrow will also depend on your income, outgoings, and credit history. To make sure that your savings and credit score are in good shape, it’s a good idea to start planning your spending and sticking to a budget as early as possible.
Contact a mortgage broker
Once you have an idea about the type of property you need and can afford to buy, the next step is to contact a mortgage broker. It may be tempting to cut out the middleman and contact lenders directly, but there are hidden pitfalls to this approach.
A good broker will have access to a comprehensive range of lenders, which would be very time consuming and difficult to track down by yourself. If you have any non-standard circumstances, such as self-employment, or an adverse credit history, then you could damage your prospects by risking rejected mortgage applications.
A rejected application will be recorded on your credit file, and will make most major lenders more wary of making you an offer. However, an experienced broker will know which lenders are more likely to make you an offer, and which to avoid. They will also help to present your case in the most favourable circumstances to lenders.
Budget in other cost of buying a home
It is not just the deposit you need to save for—buying a home is an expensive business, and there are other less discussed costs involved. One of the main ones to consider are conveyancing fees, which are the fees you pay to a solicitor for the legal and administrative work involved in the purchase. These are typically between £600 to £1,500.
You should also have a homebuyers survey carried out on the property, to check if there are any serious issues with the condition which may affect the value. There are different levels of surveying, depending on the age and size of the structure involved. Costs range from about £500 to £1,500.
Other costs to consider include insurance policies. You will need to take out home and contents insurance, usually as a requirement of the lender. You may also be advised to take out policies on your mortgage, such as critical illness cover or income protection insurance.
These will help you to continue meeting the monthly repayments, should you suffer a loss of income through illness or injury. For further advice, please contact a mortgage broker Bounds Green.