Considerations for first-time buyers

Being a first-time buyer can be daunting. Not only are you about to make one of the biggest financial decisions in your life, but you’ll probably also have family members and friends offering their ideas on the right house, mortgage, lender conveyancer and even removal company for you.

We’ve put together some ideas to try and take away some of the stress and confusion and give you confidence to move through the home buying process as smoothly as possible.

Get the right advice Of course, we’re going to say that - it’s what we do! We’ll review your circumstances and look at your income, debt, day-to-day outgoings, employment and the size of your deposit, to assess what you can afford to borrow now and in the future. We’ll talk you through the types of mortgages we think are right for you and the lenders who offer them.

Save as much as possible Buying a house is going to be expensive so it’s important to save, save, save to get yourself in the best position possible. Some lenders will accept a minimum deposit of 5% of the cost of the house you’re buying but aim higher. The bigger your deposit, the smaller the mortgage (and monthly mortgage payments) making you more attractive to a lender.

Compromise We can all admit that it is easy to get a little carried away when looking for our ‘dream’ home, but sometimes buying your first house is all about compromise. Deciding what you’re prepared to compromise on is an essential step when considering your first home. Whether it’s the luxury of having extra bedrooms or a bigger garden, it’s unlikely that you’re going to get everything you want at a price you can afford.

Know your budget Your hard-saved deposit and monthly mortgage repayments aren’t the only expenses you need to be mindful of when buying your first home:

• Some lenders will charge for a valuation fee to help them establish how much they are prepared to lend you.

• You’ll also need to factor in the cost of a survey (depending on the type of property you’re buying and the lender you choose to go with you might need a basic mortgage valuation, a homebuyers report or a full structural survey).

• In Scotland you also need to budget for Land and Buildings Transaction Tax on properties over £175,000.

• In Wales you’ll need to budget for Land Transaction Tax on properties over £225,000.

• In England or Northern Ireland, you’ll need to budget Stamp Duty Land Tax on properties over £425,000.

• You’ll also need to pay your solicitor or conveyancer for any legal work and local searches they do on your behalf.

Talk to us and we can help with practical financial advice on your first and future home purchases.

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE. Approved by The Openwork Partnership on 16/03/2023.