We know that getting that first foot onto the property ladder isn’t always straightforward. We are here for you at every step of the way. We have put together a short home buying guide for First Time Buyers covering a few key points that you need to take into account.
If you would like some advice or to have a chat with one of our specialists then call or pop into your local branch.
Consider your needs
When you look for your first home you will no doubt have a list of things you really want from it. Finding a property that meets every single one of your requirements is extremely hard, if not impossible, so you must be prepared to compromise. Weigh up all the things you want in your mind, divide them into essentials and desirables and be prepared to trade-off the things you don't need.
Make sure to consider all possibilities and research everything fully before committing. Don't forget non-property related things too, such as schools, travel routes, local amenities and medical centres.
Most people cannot afford to buy their home outright from savings and will need a mortgage to fund the purchase. A mortgage is a loan secured on a property. You will be required to put down a deposit and you will need to apply for a mortgage to cover the rest of the purchase price.
You then need to repay the mortgage to the lender. Usually this is done in monthly instalments over the term of the mortgage.
Banks and building societies offer a range of mortgages with different loan amounts and interest rates. A mortgage specialist like Embrace Financial Services can search the market to find the most suitable deal for you.
There are a number of affordable options available when you’re looking for your first mortgage:
Some lenders will offer specific mortgages tailored to first time buyers. Often, they will only require a small deposit.
Help to Buy
Help to Buy is a Government scheme aimed at helping purchasers with limited deposits. You secure as little as a 5% deposit on a property. Find out more about help to buy
How much can you afford?
One of the biggest financial tasks you will ever face is saving for your mortgage deposit. Remember to budget for all the other associated costs of buying a home too such as solicitors, surveys, removals and possibly stamp duty.
Our expert mortgage advisers at Embrace Financial Services will be able to help you plan and budget. To get an idea in the meantime you can use our handy budget planner to see how much disposable income you may have for a mortgage or to save for a deposit.
If you're a first-time buyer it is very unlikely that you'll be buying in cash, which means you will need a deposit for a mortgage. The amount of money you'll need for your deposit will vary from person to person depending on your financial circumstances and the property value. It is generally advised that you save between 10-20% of the asking price, but the more you save the better interest rate you will get.
Set realistic targets
After using the budget planner and researching property prices in your desired area, set long and short term money saving goals for yourself. Calculate how much you can afford to save and the length of time you will need to spend saving in order to get your targeted deposit.
When saving a large amount of money, it's best to put it into a savings account, preferably one with limited access. Do your research and see what banks or building societies offer the best interest rates in order to make the most of your savings.
Keep track of your spending
It's a good idea to try and keep a list of what you spend, when you spend it and what on. There are plenty of smartphone apps out there to help, or even a basic spreadsheet will do. This helps you to see where you can make savings and helps you focus on the goal. If it helps, allocate yourself a set amount of spending money each month, week or day and give it to yourself in cash every day. Any leftovers can go in a pot for the rest of the period.
Cut down on non-essentials
Keeping track of your spending will also help you identify any non-essentials you might be wasting money on. Whether it's an unused gym membership, extra nights out, or even take-away coffees, every little saving can help.
If you have the time, can you take on a part-time or evening job? Anything you can do to hit your target, do it. It’s only for a short while and you'll be so glad you sacrificed some time. Be sure not to overdo it though.
Your property search
Take time and write a list of the areas that you want to live in. If you are moving to an area you don’t know, discuss with a local estate agent who can advise on the best areas, and even specific streets to look at to match your requirements.
Properties are usually posted on the main portals, social sites such as Facebook and estate agent websites so make sure you sign up for property alerts.
When viewing a property you will likely get a 'feel' for whether or not it's for you straight away.
However it's best to have a practical approach to the viewing. Does it meet your criteria? If you're compromising - is it to a level you would be comfortable with?
Make sure to ask questions. This is the biggest financial commitment you will make so you need to be sure it's for you. If it's your second viewing then make sure you do a more thorough viewing. Check windows, heating, look in cupboards and check walls and floors. Make sure you know what's included in the sale and what will be going with the vendors.
Knowing how much to offer is tricky. Some vendors will be expecting the asking price whilst others will be open to negotiation.
If the property has been on the market for a while or you think there are areas that would need work then you could offer lower than the asking price. However, if the property has just come to market or they're in no hurry to sell then they may be prepared to hold out for a higher price.
The vendor's estate agent will be able to give you a steer on what the vendor is hoping for.
You could also get a better price for the property if you're a first time buyer or not in a chain as this is likely to speed up the selling process for the vendor. It's also better if you already have a mortgage in principle in place as the estate agent and seller will know you have the funds in place to actually buy the property at the price you're offering.