Five things to consider and five things to avoid when buying your first home

Securing a mortgage and buying your first home is an incredibly exciting yet daunting time. The house-buying process can sometimes feel like a minefield of legal proceedings and spending excessive amounts of money. However, the process doesn’t have to be difficult – here’s five things that you should consider and five things that you should avoid when buying your first home.

 Five things to consider:

 1.    Planning for a deposit

Typically, the deposit for a house ranges between 5% to 20% of the full house price. However, you’ll be more likely to get a better mortgage rate by paying a larger deposit. Try to plan for the highest deposit that you can afford and save by creating a budget - see Spending and Budgeting that you can stick to. That way, you can get a more favourable mortgage rate.

 2.    Identify the right savings methods

There is an abundance of saving options on the market. Every saving method has its own unique interest rate and generally each provider has multiple methods on offer. Lifetime ISAs are generally a credible option for those looking to get onto the property ladder, as they are a savings or investment account that is specifically designed to help people aged 18-39 buy their first home or save for retirement. It’s important however, to compare multiple saving methods to decide on the most favourable option for you.

 3.    Secure a mortgage that you can afford

When securing a mortgage, the lender will take into consideration the mortgage amount that you can afford as well as monthly repayment amounts. It’s important to ensure that the monthly repayment amounts are realistic and affordable for you and will continue to be so.

 4.    Conveyancing

Once your mortgage application has been submitted, there is a period of time where legal activity needs to take place. Conveyancing refers to the legal transfer of a property from one person to another and generally involves looking over contracts that pass between you, dealing with land registry and the transfer of money during the sale – amongst other things. It may be possible to carry out the conveyancing process yourself but it’s worth considering hiring a solicitor to assist.

 5.    Consider additional costs

The cost of moving includes more than just the deposit amount and your monthly repayments. Don’t forget additional moving costs, such as van hiring, buying new furniture or solicitor fees. These costs should be included within your overall house buying budget, to avoid being slumped with unexpected costs.

  

Five things to avoid:

 1.    Setting your sights on a house before securing a mortgage

House hunting is an incredibly exciting time and you’ll be eager to begin viewing houses as soon as possible. To avoid disappointment however, it’s important to not set your heart on a house without researching if you’re eligible for a mortgage that covers the cost of the property.

 2.    Not getting an agreement in principle

An agreement in principle is a certificate from the mortgage provider which details the amount they are likely to allow you to borrow. They are valid for between 30 and 90 days and can be provided to estate agents to show them your commitment to purchasing a house.  

 3.    Not checking your credit score

Your credit score gives a clear picture of your financial situation and is a valuable tool for determining the mortgage rate that you are likely to receive. Checking your credit score before making mortgage applications can help to avoid any unexpected rejections and can allow you the opportunity to improve your credit score before making any mortgage applications.

 4.    Underestimating how long it takes to get a mortgage

There is no clear timeframe for a mortgage application to be approved. Generally, borrowers can expect to wait between 18 and 40 days to receive a mortgage offer, however the process can take a lot longer. Before making an offer on a home, ensure the mortgage application process is started.

 5.    Doing no research into an area

Before beginning your house hunt, take some time to consider the area that you would like to live in. If you find desirable areas, based on house prices, schools or amenities, ensure to conduct some in-depth research into the area before registering with an estate agent or beginning to look at houses online. It may even be worth visiting the area for a day or a weekend to get a feel for the atmosphere.

It’s important to ensure you take the necessary measures to avoid any bumps in the road on your journey to your new home.

 

Do you need advice on securing your first mortgage? Get in touch using our General Enquiry form.

  

DISCLAIMER: As a mortgage is secured against your property, it could be repossessed if you do not keep up the mortgage repayments.