It is not surprising that most people feel that buying a first home is completely overwhelming. That is why we have put together this authoritative guide to lead you through the process.
Not only are you facing unfamiliar territory in buying a home you will also be faced with some odd sounding terms that it is important for you to understand. We will explain terms such as stamp duty, help to buy scheme and first time buyer. You will also benefit from a buyers checklist.
First things first, before you head to a real estate agent you want to spend some time on figuring out your finances and budget.
For the majority of new homeowners a mortgage will be a part of the process, unless you can buy a home with cash in hand of course.
Does it all sound a little overwhelming? It can, but it is important that you understand this is just part of the process for first time buyers.
There are several ways to find out more about first time buyer mortgages such as talking to family and friends or searching the internet for the best deals. You could also contact banks or building societies to determine what they have to offer or talk to a mortgage adviser. Of course, you will need to pay for the advice of a mortgage advisor.
Your mortgage will depend a great deal on your financial status, not only your income but the amount you have as a down payment. For instance if you are looking to purchase a home worth 150,000 you will likely need a 10% deposit or $15,000 up front.
As a rule, the more you have to put down the better your overall mortgage rate will be, and of course you will enjoy lower monthly payments as well. So you can see, it’s worth it to start saving as soon as possible so that you secure a good rate.
Now, that does not mean if you have a smaller deposit it is all over, you could get help from the government with the Help to Buy scheme. This program offers first time buyers (and even current homeowners) the option to purchase a property with as little as 5% down. You could even buy a new build property with a government interest free equity loan.
As soon as your mortgage details are finalized, you will have a budget to discuss with real estate agents, as well as a good price point to begin your home search.
There are several questions worth remember when you begin viewing properties in your price range that will help you narrow down your choices. For instance, has the current owner found another home? If not it could affect your move in date, by several months or longer.
Another thing you want to determine is if there are any other offers on the property you are interested in, this can help you determine how much you should offer or even if you want to proceed. You should also find out what is included in the sale, for example how much land, outbuildings, appliances, etc…
As a first time homebuyer, you will be more attractive to sellers and agents because you do not have strings attached, in other words, you do not have to sell your current property and you will be able to move quickly.
When you find the property you want to purchase you may need to hire a surveyor or inspector, to ensure the home is structurally complete. You may also want to enlist the assistance of an attorney or property solicitor to handle the legal side of things. You might be tempted to use a do it yourself approach, but when you consider drawing up contracts, managing stamp duty charges and dealing with land registry you might want to reconsider.
What is stamp duty? This is a duty paid on homes above 125,001 and increases accordingly as the price of the property increases.
These costs are all a part of the buying process and you need to carefully consider them when you are determining the budget.
When everything is complete in the buying process, you will exchange contracts, a date of completion will be set and then you can move into your new house.