Here’s What You Need To Know When Buying Your First Home
Every lender wants you to commit some of your own money into a property purchase. The more you have the more they like you.
Buying your first home is one of the biggest milestones of your life, up there with starting your first job, getting married, having kids, and watching England win the Euros. To be completely honest, buying your first property and England at the Euros have a quite a lot of things in common – we’re excited, nervous and we don’t have a clue what’s going to happen.
England winning the Euros isn’t anything you or I can prepare for, but we can definitely get you ready for that first property purchase. Luckily for you, I’m a mortgage adviser and estate agent based in Worcester and Malvern, so I have a few tips and tricks I’d like to share with you.
TIP ONE: WORK OUT YOUR DEPOSIT
Unless you’ve recently won the lottery and have the means to buy a house outright, you’re going to need a deposit and a mortgage.
Every lender wants you to commit some of your own money into a property purchase. The more you have the more they like you.
So, you will need to have savings, or perhaps a Help to Buy or lifetime ISA in place, and if you don’t, you’re going to need to get one or a gift from your favourite relative.
Don’t take the numbers in your bank account as your full deposit amount though. Buying a house comes with a lot of fees, including (but not limited to) legal fees, professional advice, banking transactions, disbursement costs, SDLT, arrangement fees, valuation fees AND maybe renovation costs. It’s really no surprise they say getting on the property ladder is so hard.
I suggest figuring out how much these may cost, round it up to the nearest grand, and take this away from your savings. Now you have a realistic deposit figure.
Not sure on how much you need to take away? I can help. Head over to my article “What’s my budget as a first time buyer?” and let’s break down all the above costs together.
TIP TWO: FIGURE OUT YOUR AFFORDABILITY
The first thing you need to do when wondering how much a lender with lend to look at a few affordability calculators. All lenders, estate agents and well, anyone in property, make these calculators readily available, so a quick Google search should bring one up.
These mortgage calculators take your monthly gross earnings, your net earnings and your outgoings to give you an estimate as to how much you’re likely to be able to borrow. It’ll also ask you a few other questions like how many people you’ll be living with, as well as how long the term you want your new mortgage to last before its repaid.
The longer the term, the more affordable the monthly payments, which means the more they will lend you…..to a point. This may get you a better house but the longer term will cost more overall.
Typically. the sweet spot is around 25 to 30 years, which seems like a long time, but it doesn’t mean you have to commit to living in that house for the next couple of decades – I promise! You don’t even have to stick to the stated term many mortgages allow overpayments, if you can afford them, which will shorten the term of your mortgage and save you thousands.
Want to find out more about your overall affordability? Check out “How can I calculate my mortgage affordability?” and let’s go through it step-by-step.
TIP THREE: CHILL OUT
Buying your first home, just like England playing in the Euros, is a rollercoaster. You might feel disappointment, excitement and triumph, but it’s all part of the fun.
With the housing market so busy, you might think you need to buy the first house you can afford and/or like, but this isn’t the case all. Don’t rush into any decisions; take the time to really figure out what you want.
You don’t have to go through it alone. I’d always suggest to anyone interested in purchasing their first home that they get the support of a few professionals, like a mortgage broker and an estate agent.
A mortgage broker is likely to come with costs, but it can actually save you money, as you know you’re getting the right mortgage for you. Over 75% of mortgages are arranged through mortgage brokers which is why many have access to mortgages not available direct to the public, so it’s always worth talking to at least one.
The right estate agent will get into the nitty gritty of understanding your property requirements and then only send you properties that tick those boxes in a location that suits you. On The Market has a feature that allows you to register for alerts too which gets you email alerts when properties are new to the market
I guess it’s kind of like Tinder. (So they tell me)
HOW CAN I HELP YOU?
I’m Big G on property.
I have over 20 years experience within the property industry and I’m also a mortgage adviser, meaning I’m the perfect person to help you along your property journey. I love to help people getting onto the property ladder. It’s not easy, but with the right guidance, it’s made a lot easier.
Got a question? Seen a property term you don’t understand? Give me a call on 01905 426000 or drop me an email gareth.evans@platinum-property.co.uk.
Written by Gareth Evans, Mortgage Adviser & Director at Platinum Property Agents