Buying your first home will easily be one of the most exciting and stressful experiences of your adult life. But, with the current mortgage guarantee system, it’s the right time to take the plunge.
Stopping having to pay rent, and instead owning your own residential property is an exciting step. But being a first-time buyer comes with the stress of taking your first steps on the property ladder.
First-time buyers don’t need to learn by trial and error, and with the right research, the whole process can be much simpler. This article will help first-time buyers run their business like a seasoned pro.
1. Additional costs
List price is just the beginning, and for most people, the home budget dictates everything. Therefore, it is important to have an experienced and knowledgeable Independent Mortgage Advisor on your side from the start.
For first-time buyers, the quality service provided by qualified and seasoned professionals, such as those at PBS Mortgage Solutions, will ensure that you don’t sacrifice the factors that are most important to you and your family. It will also help you get the best interest rate and understand what your monthly repayments will look like.
A mortgage advisor will also tell you about ways to save money, such as through government programs and condominiums. Co-ownership is a purchase system in which you pay part of the rent and part of the mortgage.
Another additional cost to bear in mind is Stamp Duty, or Stamp Duty Property Tax, which is a 5% government charge for homes over £300,000. So if the purchase price of your home is less than £300,000, you don’t pay stamp duty. However, if the purchase price is over £300,000, you pay 5% on the amount over £300,000, not the full purchase price.
The deposit can also represent a significant initial cost. Currently, the mortgage guarantee scheme only requires a 5% deposit to secure a mortgage. Remember, however, that the more down payment you make, the lower your monthly payments will be.
And there are other costs and fees, such as appraisal fees, survey fees, e-transfer fees, mortgage fees involved in the mortgage application process, real estate transaction tax , moving expenses, land registration fees and basic legal fees like buying a house is a legal process.
This is why consulting a mortgage advisor is strongly recommended, especially for first-time buyers.
Once you’ve done your affordability assessment and know what you can afford, the next big question is location.
Remember that you will be making mortgage payments for the next 25 years. This means that you not only have to consider what your daily life needs now, but also in the future. Think about what that means, or better yet, think about how your life will and might change over the next 25 years.
Questions to consider include:
- How is the traffic, including weekends?
- Is the area well maintained? are there visible elements of crime and decay or pride and ownership?
- Are you single, married, do you have children or do you plan to have any?
Remember that the exterior of the house will have a more direct and significant effect on your life than the interior of the house. So think about your lifestyle, not just the number of bathrooms and bedrooms.
3. Nearby schools
One of the most critical elements involved in choosing the right location is schools. It’s especially difficult if you don’t even have children yet.
One of the best things you can do is visit local schools yourself, find out how your kids would get to school, and ask all the families in the area what they think of the schools. You can also check schools in your area using the government’s Ofsted website.
4. Coming to work
Your commute to and from work is something you probably have to do at least 70% of the week. It’s a good idea to drive the car before you buy, and not just on holidays!
If you plan to add hours to your commute, you need to identify the offsetting benefits that come with it.
5. Type of ownership
Although you may not be able to afford all the space you want, consider whether it will be possible to add space to the house later, such as another bedroom, an additional bathroom or even a garage. Or, as your life changes, can you convert the use of coins to other purposes.
Also, have the values of homes in the general area increased over the past few years, or not? Unless you can afford a new home construction, you may need to consider changes to the property over time.
6. What’s nearby?
Your current and future lifestyle is an essential part of the location. Not just schools, but community programs, family doctors, family dentists, grocery stores, parks, restaurants, gas stations, fitness centers and gyms, pharmacies, dry cleaners , etc.
Also consider potential drawbacks, such as proximity to railway tracks, airport/under a flight path, near or on a floodplain, etc.
7. Don’t overlook any flaws
It’s very easy for first-time buyers to overlook some big issues because they’re blindsided by all the good ideas they see in the property. Remember that in most cases, even first-time buyers wanting to get on the property ladder should be buying a home, not a project.
Ask questions, no matter how trivial:
- How long has the property been for sale?
- When can you move in, when do the owners move out?
- What work has been done in the house; how old is the roof, boiler, windows, plumbing, wiring, etc. ?
- What is included and not included in the sale?
- Can you see the energy performance certificate?
First-time buyers usually learn the hard way how to do things right. However, with the right know-how, you won’t need it.