Top 5 practical tips for first-time home buyers
Written by Robert Bester, Consumer Finance Expert Robert has been a writer for six years, specialising in consumer finance and the UK lending market. Concentrating on consumer credit products, Robert writes informative articles that help customers manage their personal finances efficiently.
22nd February 2021
2 minute read
While getting on the property ladder can sometimes seem a bit of a tall order, it can be worth it to move into a property that is truly yours, and you can set about making it your own by redecorating and refurbishing to your heart’s content.
Even if you have everything in place to buy your first sacred dwelling, there are loads of things to consider before you’re ready to settle. How much deposit do I need? What are the best mortgage rates? Can I even get a mortgage? Don’t panic though; just pull up a bean bag and witness the wisdom.
The Guru’s top five tips for wannabe first-time buyers:
1. Save a big enough deposit to get the best rates
While you might only need to put a minimum of a 5% deposit down, if you’re a bit flush and in a position to put more down, then you really should. Putting a larger deposit down will open up more products for you to choose from, and give you a better chance of bagging cheap mortgage rates.
There are a number of government-backed savings schemes aimed at putting home buyers onto the property ladder, including the Lifetime ISA and the Help to Buy ISA to help first time buyers save for a deposit. You can benefit from a 25% bonus on whatever you save so it’s extremely worthwhile. Check out this page for more information.
If you’re struggling to save, there’s always the option of asking mum and dad to chip in. Getting a gifted deposit or at least a contribution can really boost your savings if you are having trouble raising enough money.
2. Budget for additional fees and costs
Unfortunately, the deposit and the mortgage aren’t the only costs involved in buying a house. Be wise my friend and make sure you have money put aside for these extras. Other fees you might have to fork out for are:
- Conveyancing fees
- Mortgage valuation fees
- Arrangement fees
- Stamp Duty on properties over £300,000 (under this price is free for first-time buyers)
- Survey of the new property
- Removal costs
- Fixtures and fittings costs
- Home insurance
Whether you need to make a written list or create a spreadsheet to help with your budgeting, it can really help so you aren’t caught short when it comes to covering these important costs.
3. Check your credit rating
Having a poor credit score will affect the amount you’re able to borrow with a mortgage, or even getting a mortgage at all. Make sure you’re in control of your finances and know your credit score, well before you plan to apply for a mortgage. This will give you plenty of time to have any mistakes corrected or, if you’re in a spot of financial bother, to improve your score.
Get up to date with your financial history and browse credit report providers here.
4. Don’t use a mortgage broker
As much as it can be useful consulting a mortgage broker or getting advice in any form from a solicitor or mortgage advisor, there are plenty of options to narrow down the best deal online. Our moneymatcher tool will allow you to tailor a mortgage deal to your exact requirements and grab a great deal in the process. Going it alone might seem daunting, but the admin fees can be expensive enough without lumping a mortgage broker fee on top.
5. Do your homework
It might seem obvious, but you really need to do your research when looking into your first home mortgage. There are plenty of schemes out there to help you transcend difficulties when buying your first house, including affordable house schemes, help-to-buy and shared ownership.
Buying your first house can be a wonderful time in your life, but the process and the paperwork can become a bit of a drag. If you’re struggling to get your head around first-time buyer mortgages, check out our full guide: how to get a mortgage as a first-time home buyer for more information.