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.

Here are some helpful tips for first-time homebuyers:

1. Get the right advice:

It's important to seek professional advice to understand your financial situation and identify the right mortgage options for you. Consider factors such as your income, debts, daily expenses, and employment status to determine what you can afford to borrow.

2. Save as much as possible:

Saving as much as you can for your initial deposit is crucial. While some lenders may accept a minimum deposit of 5%, aiming for a larger deposit can make your mortgage more affordable and attractive to lenders.

3. Compromise:

Recognize that compromise is often necessary when purchasing your first home. Prioritize your needs and determine what you can afford within your budget. You may not find a home that meets all your desires, so be prepared to compromise on certain features.

4. Know your budget:

In addition to the deposit and monthly mortgage payments, consider other expenses such as valuation fees, survey costs, and taxes associated with your property purchase. Factor in these expenses to avoid financial surprises during the home-buying process.

Some lenders will charge 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 homebuyer's 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 02.09.2024