Most important by far for first time buyers is saving up a sizable deposit. The minimum required is usually 5% of the value of the property. However, the larger the deposit the lower the interest and repayments on the mortgage will be. Special rates with the best deals are usually available with a deposit of 25% or more.
Type of Mortgage
Mortgages fall under two main categories, government or mainstream lenders. The government offer several schemes to help first time buyers onto the property ladder such as Help to Buy, Right to Buy and shared ownership.
The Help to Buy scheme only requires you to save 5% for your deposit and the Government will add 15% – 20% depending your eligibility. Shared ownership allows you to buy a portion of the property from a landlord such as the council and rent the remaining share.
Many mainstream lenders offer specialist FTB (first time buyer) Mortgages which are guarantor mortgages. There are also certain lenders which do deals for people with a 5% deposit. It is good to shop around to make sure you get the best deal.
Finding the Property
Just like it is good to shop around for the best deal on your mortgage it is also sensible to check out as many properties as you can before you make your final decision. Take a look around online sources such as Zoopla or Rightmove and go out and visit your top 10!
Take note of different locations to consider commuting and amenities. You can also register with local building agents to be notified of new developments in your chosen location.
Other things to consider when you find a suitable property :
what is included in the sale?
how long has it been on the market?
why is the property being sold?
Finding out this information will help you make an informed decision to ensure your future happiness in your new home!
Making an Offer
It can feel daunting preparing to make your first offer but one thing to remember is first time buyers are in a strong position as they are not part of a chain.
Try not to make an offer too low, estate agents can help with this decision.
Sometimes an ‘Agreement Principle’ may be required to show that as a first time buyer you can secure a mortgage.
This is why making steps to organise your mortgage before you make your offer is very important.
Having good legal representation is the most important part of buying a home, make sure you have a solicitor that works for you arranging such things as stamp Duty, contacting Land Registry, transferring money during the sale, and acting as a general intermediary between you, the lender and the seller. This will save you a lot of time.
Worried about buying your first home? You could consider applying for a mortgage with us. Simply click the link here to put forward any queries, or contact us on (0191) 581 9018 for a free financial consultation.