The Everything Guide to Buying Your First Home
If you are buying a home for the first time, you can find the process a little confusing and demanding. About 86% of people in the United Kingdom want to own their own homes. However, before you step in to purchase a home, you want to know whether owning one is right for you or not. This guide can help you if you are a first time home buyer.
1. Save enough for a deposit
You should have started saving for a home purchase so that you can take advantage of the government bonus when you buy it. In case you have not started doing so, you want to consider starting the saving. You will need to have been saving for at least one year before you can enjoy the bonus of up to 25%. Almost all mortgage lenders will want you to have a deposit, at least 5%.
2. Consider a mortgage
Apply for a mortgage agreement in principle (AIP) before you start hunting for a house. AIP shows that a lender would, in principle, want to lend you. The AIP document can be presented to estate agents to show that you are a serious buyer. There are also Help to Buy equity loans you can consider.
Most mortgage lenders can offer you a mortgage loan of maximum 3 to 4 times your combined annual income – that’s your income and that of others you are buying the property with. While you can use mortgage borrowing calculators, they will only provide you with rough estimates of the amount you are able to borrow. There are other factors like credit history that can affect the amount of mortgage to get from a lender. You need to talk to or engage with a mortgage broker so that you get more details about the amount you are likely to receive as a mortgage loan.
3. Start house hunting
You need to research the area you want to stay and begin the house-hunting process. Ensure you have real-life viewings of the homes so that you have a feel for the kind of property available for the budget you have. Acquaint yourself with the property prices in the areas you would wish to reside in.
Ensure you engage with the agents after you have registered with them so that they can provide you with an inside view about the things happening in the market including the property prices within the local area. The agents will also tell you if there are bargains. Have a checklist of property viewing and use it whenever you go to view a home so that you don’t miss crucial details. You need to understand how you can view a show home so that you avoid the sales tactics that the brokers use to sell homes to potential buyers. If you aren’t careful, you could purchase a home that is overpriced because you didn’t have the details of the property properly checked.
4. Make your offer
Once you have found the right property for you, and you feel that you can confidently afford it, it is time you make an offer. If the market is more of a buyer’s market, it makes things easier for you. You can be able to pay under the property asking price.
While sometimes you may find that the market is a buyer’s market, at other times, things may be different. Many factors affect your buying decision and the amount to offer. You need to know how to negotiate in the event that your offer has been turned down.
5. Apply for the mortgage
When you have your offer accepted, you should now apply for a mortgage. A mortgage broker can help you with the application process. The broker can tell you the lenders likely to accept you for a mortgage and how much it can cost you every month.
Since it can be complex to work out the best deal of a mortgage, you need to consider seeking a mortgage broker. The broker can help put into light some of the issues that you may not know about borrowing a mortgage. Even experienced home-movers tend to use the services of mortgage brokers.
6. Get a surveyor and conveyancer
Although the home you are buying may look good, you always want to have a surveyor do a survey to pick up any issues with the property. A conveyancer or property solicitor handles the legal work that is involved in the home purchase process. Besides, a conveyancer will sort out issues like stamp duty land tax in the event that you have to pay. Depending on where you live in the UK, you may find that the rules are different for first-time buyers. A stamp duty calculator can help you determine how much you pay.
7. Organize for removals and Insurance
You will need to make arrangements for removals as the moving day approaches. A removals company is going to shift your items and belongings to the new home. You can have a few quotes from different movers and choose the one that you think offers the best services and affordable moving prices. You also need to get your building’s insurance already in place on the new home after exchanging contracts. Consider reviewing the different home insurance providers so that you find the ones who are highly rated by homeowners.
8. Exchange contract and complete the purchase
Your conveyancers or solicitors and those of the seller will be involved in the exchange contract confirming the purchase of the property. Also, pay an exchange deposit about 10% of the home price, but you can negotiate down if you have 5% saved up. It is important that the purchase is legally binding. Complete the buying and move in. You will need to pay the remaining amount so you collect the keys.
This guide will help you if you are purchasing a home for the time. Ensure you have a conveyancer to help you. With this guide, you will find the home buying process a smooth one since you are able to prepare yourself adequately for most of the processes and activities involved in the home purchase journey.