The Ultimate Guide for First-Time Home Buyers

Buying your first home is a stage of life that you should be excited about. However, we understand that it can also be overwhelming, as there are a lot of steps and considerations during the process. If you need help figuring out where to start, we have created the ultimate guide to get you through it with confidence and ease.

Assess Your Financial Situation

It can be tempting to dive straight into the excitement of property viewings. However, it’s a good idea to first take some time to look over your finances. This will give you a clear picture of where you currently stand and what you can afford.

• Savings: You should consider the down payment and closing costs, as these are some of your biggest expenses. Once you know how much you have available for these payments, you can set a realistic budget.
• Spending Habits: By looking at your monthly spending, you can figure out areas to cut back. This could be reducing how much you go out for dinner or the number of subscriptions you’re signed up for.
• Credit Score: If you plan on taking out a mortgage, you should check your credit score. Lenders will use this to decide if you’re eligible for a mortgage and what interest rates are applicable.

If funds for your new purchase depend on someone selling another property, you might want to avoid the complex chain scenarios that can come with the open market.  We Buy Any House can help you achieve a quick sale, completing the transaction in as little as three days. This can be especially useful when using the proceeds as a deposit for your new home.

Explore Mortgage Options

As a first-time buyer, mortgages can seem like a daunting prospect. Once you take some time to look at the options available, you can find the best one to suit your needs. Here are three common types:

Fixed-Rate Mortgages

Fixed-rate mortgages are a great option if you prioritise stability and predictability with your payments. It offers a set interest rate for a certain period, usually lasting between two and five years. This means you’re not at risk of unexpected higher payments, making budgeting much easier.

Tracker Mortgages

A tracker mortgage, on the other hand, would be a lot less stable. You will often receive a competitive rate when signing up for this option. However, the payments you make can go up if interest rates rise. So, if you want to avoid the risk of higher payments in the future, this may not be the best option for you.

If you’re less worried about payments or not looking to live in the house for a long time, this is an option to consider.

Offset Mortgages

This option is where your mortgage is connected to your savings account. It will reduce the interest you pay on your mortgage by offsetting it to your savings account. Although you won’t be earning interest on your savings while this is in place, it’s a valuable option to consider.

You will typically find that first-time buyers will lean toward fixed-rate mortgages, mainly down to its predictability and security.

First-Time Buyer Schemes

Buying a house for the first time can be extremely expensive, especially in the current UK property market. If you feel that owning a home is out of reach financially, take a look at some of the schemes available to help you get on the property ladder.

Here are two great options to consider:

• Shared Ownership: This offers you the chance to purchase a percentage of a property and pay rent on the rest. This scheme aims to allow you to gradually increase how much you own over time.
• Starter Homes Scheme: The starter homes scheme offers first-time buyers the opportunity to buy a property for below its market value. You must be under 40 to qualify for this scheme and plan to live in it for a certain amount of time.

Finding the Right Property

Viewing properties can be a fun and exciting experience, but actually finding the right property isn’t always as easy.

Let’s take a look at some tips to help you find that perfect home:

• Make a List: Yes, just sitting down and writing a list can really help you figure out what you want from your new home. You should include things like what you must have, the things that will be deal-breakers and the locations you are open to. This will help you pick out the best properties and speed up the process overall.
• Attend Viewings: When you attend house viewings, you must ensure you’re getting the most out of your time. Of course, you need to see a property in person to get a feel for it, but you should also see this as a valuable opportunity to get information from the agent. Be prepared with questions beforehand to find out more about the area, the neighbours, transport networks, etc.

Preparation is key here, making for a smooth and quick process.

Closing the Sale

Once you have found the perfect property and your offer has been accepted, you will then enter the closing stages of the sale. As you are right at the end, you will be eager to get everything finalised, and here are some tips to keep everything moving:

• Create a timeline to manage all the outstanding tasks. This will include depositing funds, signing paperwork, and finalising the mortgage.
• Maintain regular contact with your legal representatives and lenders to keep the process on track.
• You will need to attend a closing appointment to sign the last of the paperwork and officially transfer ownership.

Once all the paperwork has been completed and everything is in order, you’ll receive the keys to your new home, and you can begin the next stage in your life.

Conclusion

Purchasing your first property can feel like a stressful experience at times, but with the right approach, it will be worthwhile. Once you take some time to research your options and plan out how you’re going to approach the process, owning your first home is well within your reach.