Looking for your first home can be both exciting and daunting. Even though it will be the single largest purchase you ever make, a surprising number of first time buyers make costly mistakes in their choice. Make sure you do your homework properly and you will hit the jackpot and get the ideal home for you.
1. Don’t overstretch yourself financially
Many first time buyers get as far as putting in an offer on a property before they realise that they cannot afford it or are unable to secure a mortgage on the property. It is essential to know how much you can comfortably afford. This figure is calculated by adding up your monthly expenses such as credit card payments, motoring costs or transport fares, student loan repayments, food, health insurance, pension plans and food bills plus large annual expenditures such as holidays and insurance policies. Once you have this figure, deduct it from your tax home pay and this amount is how much you can afford for mortgage repayments.
It is a well known fact that those trying to get on to the property market, often have to compromise with their first purchase, but the question you must ask yourself, is whether you are happy to do this or would you prefer to continue renting where you are probably compromising already!
It is a sensible move at this stage to approach your mortgage provider to discuss your plans and to get and ‘agreement in principle’ or ‘mortgage promise’ which will enable you to put an offer in on a chosen property. These agreements are usually valid for 30- 90 days so do check and these can be impacted if you decide to take out a car loan or similar – so be careful.
Whilst mortgages with 10% deposits are available, there are some that need a down payment of just 5% and this is well worth checking out.
An important point to remember is that it usually takes 18-40 days to get approval for a mortgage – sometimes longer, so it is essential that you have started the mortgage application process before you make an offer on a property. A small fact that many first time buyers overlook but can save lots of hassle, is to ensure that you are listed on the electoral roll as this can help verify your identity and not being on the roll can impact your credit score.
2. Consider all the expenses
Buying your new home is definitely going to be your largest bill, but home owners do incur plenty of others and these need to be brought into the calculations so that you are not caught out. There will be conveyancing fees and a bill for the house survey (this one is essential – even for new builds) and once you have moved in there will be domestic bills, property and contents insurance and of course council tax. If you are buying a flat there could be communal charges too.
3. Think carefully about location and property size
These may seem obvious, but it is surprising how many couples get carried away in the excitement of finding their dream home and don’t give these important points careful consideration. Location is always high on ‘the tick list’ for many reasons including ease of commute and good local amenities including shops, restaurants and gyms.
The size of property you buy is important too. If you are intending to live in the property just a few years the number of bedrooms it has might not be quite so crucial, but if you are planning on staying in it for a number of years, you may well want it to become a family home and will definitely need more space.
When you are discussing things with your mortgage provider, make sure there are no constraints on buying a new build for example, or a property situated above shops or offices.
4. Don’t be wooed into buying a property
Some fist time buyers fall for all the sales talk, the 360º virtual tour and the presentation of the house by property dressers, but in reality this is all cosmetic! Spend plenty of time really checking out the property and whether it represents a good buy. Are there any major problems that you can spot? Does the property have double glazing and central heating as these are requirements of 92% of house buyers these days? Ask plenty of questions and look carefully behind furniture and in cupboards – can you spot any signs of damp? Why are the current owners moving? How long has the property been on the market?
It also pays dividends to do good research on your chosen area especially with regards to future plans for its development including new road networks and property developments on green spaces. Also make some price comparisons with similar properties in the area to ensure that your chosen property is being sold at a fair price.
It can be a good investment to buy a property that needs work doing on it such as a complete new fresh look for the interior decoration or maybe the bathroom or kitchen are dated and need an upgrade. The property experts at House buyers 4u say a good yardstick for first time buyers, is to buy a property that you can add value to as this ensures that when you sell, you will be able to climb onto the second rung of the property ladder. One good hunting ground for such properties are cash house buyers who buy any property in any condition – perfect if you want to start learning DIY skills.
5. Don’t be afraid to negotiate
Entering the property market for the first time can be scary and consequently, many first time buyers are nervous of negotiating and some end up paying more for their home than they need to. There is absolutely no reason why you should not negotiate on the price and you do hold the trump card as you are not tied into any property chain. Once you have decided on the figure for your final offer, make it firmly with an expiry deadline – in most cases the offer is accepted.
6. Get the timing right!
A surprising number of first time buyers are so excited about moving into their own home that they are over-keen to leave their rented property. All is well and good until there is a hitch and they find themselves moving in with parents for friends. Whilst the property buying process can go smoothly, it is best to be cautious and not leave your rented property or book furniture deliveries until the contracts have been exchanged and a completion date decided.
And the biggest mistake of all..
In a recent interview with Cosmopolitan UK magazine, property expert Elliott Castle explains that the biggest mistake of all is to give up the hope of buying your own home.
Nowadays there are several different government schemes around to assist you in purchasing a home.
“The Government has launched lots of new schemes which provide a leg-up for buyers who can only gather a small deposit – there’s the ‘Help to Buy’ scheme, ‘Help to Buy Equity Loan’ scheme, ‘Starter Homes’ scheme and ‘Shared Ownership’ scheme. Everyone should make the most of these schemes to help get their foot on the ladder if they need help”.
Don’t be one to give up, work and be smart – dreams really can come true!
