Buying your first home is an exciting time, so to help the process go as smoothly as possible we’ve created this handy first time buyer guide, covering everything from budgets and deposits to applying for your mortgage and the big move itself.
Ready? Let’s get started!
If you’re thinking about buying your first home but you haven’t started saving yet, now’s the time to begin. But how much do you need to save? Simply put, a bigger deposit will usually mean a lower mortgage rate, which in turn can mean lower monthly repayments.
For example, if you’re looking at houses around the £150,000 mark, you will need to save a minimum of £7,500 for a 5% deposit, or more if possible. Most people need a minimum deposit of 5% of the home they want to buy, so it’s important to factor that into your overall budget.
If you’re thinking about buying your first home, you should book a chat with one of our mortgage experts. They can explain how the process works in detail and give you an idea of what monthly payments might look like for different mortgages.
Buying a house comes with several costs you need to consider before you start looking at a mortgage or making an offer. Crunch the numbers to make sure you’re not caught out!
It’s worth noting that all our valuations are currently free for properties up to £750,000, so you could get a free arrangement fee and valuation with us, subject to acceptance.
If you’re buying in England then it’s also important to factor-in stamp duty. Stamp duty is a tax paid when you buy property over a certain amount –but first time buyers don’t pay stamp duty on properties up to £425k, which is certainly a bonus. It’s worth noting that there’s a different system in Scotland involving Land and Buildings Transaction Tax (LBTT) which you can find out more about on the Scottish Government website.
A mortgage in principle is a confirmation from your lender that they agree to lend you up to a certain amount if you buy a house. This demonstrates to sellers and estate agents that you’re serious and you’re able to secure the amount of money needed for the property, which in turn makes you a more attractive buyer – important in this competitive market!
Getting a mortgage in principle can help to show estate agents that you’re a serious buyer in a position to proceed immediately with your purchase, which stands you in good stead when you see the property you like!
Now for the exciting part – searching for your property! Start by exploring the area you’d like to move to, preferably in person, to get a good feel for the neighbourhood. Talk to local estate agents as they may be able to suggest different properties or areas you hadn’t considered yet. It’s always worth keeping an open mind!
After you’ve chosen a few homes to view, it’s a good idea to visit them in person a couple of times.
Our expert tip is to view them at different times of the day, if possible, so you can see how the property and neighbourhood differ at peak traffic periods and after dark, for example.
When you’re viewing the property, don’t be scared to check walls for signs of damp, request access to the loft to see the condition of the insulation and the internal roof. Also ask about the neighbours and keep your ears open for noises – it’s worth getting the full picture before you commit.
Expert tip: Consider any relevant factors such as school catchment areas, transport links, flood zones, development applications and even crime levels, which can all be accessed online.
So, you’ve compared your options and found a property that’s right for you. Now it’s time to make an offer – but how much? If the house valuation suggests the property might need some extra work in the future, this could be a reason to make an offer below the asking price, to cover the additional costs. However, if you believe the property is worth the asking price and may attract a lot of bids, it could be worth matching the asking price straight away – if it’s within budget.
Expert tip: Research the price of similar houses in the area on sites such as Rightmove and Zoopla, where you can also check how long the property has been on the market. If it’s been on a while, then the seller may consider a lower offer.
Consider your position as a first time buyer as a very positive one as you’re not waiting for your house to be sold so you can move in swiftly – this can be a real plus.
By the time it comes to applying for a mortgage, you may have already spoken to one of our mortgage advisors at an earlier stage and are likely to have an agreement in principle. It’s important to discuss the types of mortgage that might be available to you, how long you want to pay it off for (this is known as the mortgage term) and also the support that’s available to you.
Once our mortgage advisor has completed all the details on your application, they will then ask you to sign it. At this point we’ll get the process started straight away. We will arrange for a mortgage valuation to be carried out on your property, which will confirm whether the property is suitable for us to lend on. This is also the point where you need to arrange for a conveyancer to get the legal work started – but don’t worry, we can help you with this.
Once your application has been processed, you should receive your mortgage offer – success! This means your mortgage has been agreed. Remember to check the details carefully before you sign.
A key part of securing your home is the property survey. This survey ensures that the value of the property covers your mortgage and that it doesn’t have any major problems. There are three main types of valuation. Our mortgage advisors can help you decide which one is right for you:
It’s essential that you have buildings insurance in place on your new home from the day you exchange contracts. This is because you’re legally bound to buy the property from the moment contracts are exchanged, so if the building was flooded or damaged before the day of completion and you weren’t insured, you wouldn’t be covered.
The great news is we can arrange home insurance for you through RSA and also arrange life and critical illness cover through our partners at Legal and General (both subject to acceptance). Just a couple of things to lighten your to-do list, should you require them.
In England, once your conveyancer has completed all the legal processes and checks, you will be asked to sign a contract. By this point your mortgage will have been approved, your solicitor will be happy with the results of the surveys, you will have agreed on fixtures and fittings and the seller will be ready to pass over the deed. Phew! The Scottish process is different, so if you’d like to know more about this then please get in touch with one of our Scottish branches.
Once you’ve signed and exchanged this contract, you are agreeing to become the legal owner of the house and are legally bound to buy the property. Your conveyancer will finalise all the paperwork and the transfer of the balance of money – this is usually where you pay your mortgage deposit, too. Once everything is signed and delivered, you can really celebrate!
Remember to give yourself enough time to pack up your belongings and acquire any essential furniture or items you might need, and arrange transport for the big day. The seller will also need time to move out and clean the property, ready for you to move into it.
Expert tip: As soon as you know your completion date, you should notify your utility companies or set up with new ones to avoid being without essential services. This goes for your internet provider too, the sooner the better! In addition, you need to inform anyone you regularly receive post from of your new address – for example doctors, dentists, service providers and the DVLA, if you hold a license.
If you’ve made it through the entire property purchase journey – congratulations! We hope you enjoy spending time in your new home and making it your own. Please remember we’re always here for you, so if you have any questions or queries then feel free to get in touch.