First Time Buyer Checklist

Buying your first home is one of the biggest decisions you will ever make - while it’s such an exciting time, it can also be confusing if you’re not sure what to do, or where to even start.

We want make this process as smooth as possible for you, so we’ve put together a check list for first time buyers that need some guidance.

Is now the time?
The first thing you need to consider is, is now the right time to buy your first house? Will you be able to afford not only your deposit, but also solicitors fees and other moving costs? How much do you know about the area you are looking to invest in? Do you know what kind of property you’re looking for?

It’s important you’re committed and ready to buy, or you could face penalties or charges for ending your mortgage.

Saving for a deposit
The minimum deposit you will need to stand any chance of being accepted for a mortgage loan is 5 per cent, but are generally higher at say 10%; so, if you wanted to buy a property for £200,000, you would need to save at least £20,000. If you put a higher deposit down, you may be able to purchase a more expensive house and your monthly mortgage payments could be cheaper. The good news is 95% mortgages are now becoming easier to obtain for first time buyers

Saving for a deposit isn’t easy for most people, especially because house prices tend to rise faster than the rate of inflation. A cash ISA is a great way to save for your deposit, as all interest earned is tax free, meaning you end up with more money in your pot.

Budget your outcome and outgoings
As well as saving for a deposit, there are many other financial factors you need to consider when buying a house. Firstly, you’ll need to think about whether you can meet all the upfront costs, such as solicitor’s fees, surveyor fees and costs of removals.

Next, there are monthly bills, like insurance, mortgage repayments and council tax, to take into account. A mortgage advisor will check your affordability, but when completing your application, you must include all your regular outgoings, including car finance and credit card repayments. This can then affect the mortgage rate you are offered.

Stamp Duty
Stamp Duty is a tax paid on property purchases – and the good news for current buyer is, it’s on holiday!

The Stamp Duty Holiday was announced in July 2020, during the height of the pandemic, to revive the struggling property market and encourage buyers. The holiday means the price at which it has to start being paid was raised from £125,000 to £500,000 – a rise which could save you up to £15,000.

The holiday is still in place until June 30th, 2021, upon which point a staggered return to usual rates will be put in place, meaning if you buy before the end of September 2021, you won’t pay any Stamp Duty on the first £250,000 of a property purchase.

From October 1st, 2021, rates will return to normal, with the amount of tax rising as the property price increases.

Organise an appointment with a mortgage advisor
A mortgage advisor will be able to give a rough idea of how much you will be entitled to borrow. They will look at your salary and outgoings to see if what you have in mind is affordable.

When you meet with the advisor for the first time, you will need to take:
• Proof of ID – passport or driving license
• Proof of current address, such as a bill or bank statement
• Last three months’ worth of payslips
• Most recent P60 form
• Details of any credit commitments, such as credit card statements or student loans

Once you have had your first meeting with the mortgage advisor, you will need to get a mortgage in principle – this is a declaration of how much a lender is prepared to let you borrow – before you put any offers in.

Happy house hunting
Now is the time to start the search for your first home!

We advise making a list of things that are important to you and things you want but aren’t necessities. This will help you to narrow down your options and realise what you want from your home.

You will also need to think about things such as local supermarkets and schools, and amenities. If you’re moving to a new area, one of the best things we advise is to take a day trip to the area and get a feel for the place. You will then get a good idea of distances to local facilities.

Offer time
Making an offer on a house is often one of the hardest parts of buying your first home.

Before you make your offer, research similar properties that have recently sold, so you can get an idea of price range. Of course, many sellers won’t accept anything below the price, but there is generally room for negotiating, so offer what you feel is acceptable.

When you’ve decided on your first offer, this should be put to your estate agent, ideally in writing, who will communicate it to the seller. The estate agent will then liaise with the seller to negotiate, accept or reject.

Home sweet home
Once your offer has been accepted, it’s time to meet with your conveyancer and arrange searches, surveys and contracts.

When the relevant checks have taken place and the deposit has been paid, you’ll be given a completion date – usually 8-10 weeks after the offer has been accepted, as long as there’s no chain – and begin to plan your move. Then, the fun really starts!

We hope you found this guide useful to help you when buying your first house. If you need any help finding your dream home, get in touch with our team, or head over to our Facebook, Twitter and Instagram pages for more tips and tricks.