A complete checklist for first-time buyers
02/05/2023
So, you’ve decided to purchase your first home? Fantastic! There are, however, for first-time buyers, various steps to take before you get the keys and officially own a home, including assessing what you can afford, budgeting for necessary fees and finding a property that’s right for you.
We want everyone to feel confident when climbing the first rung on the property ladder, so in this blog, we’ve provided a handy checklist for purchasing your first home, starting with working out your overall budget.
1. Determine what you can afford
The first step in the first-time buyer process is to work out your budget and what you can afford in a general sense when it comes to purchasing a property.
Whether you’re buying alone or with someone else, you will have a limit to what you can afford as there are various costs to consider.
Not only do you need to save up an initial deposit, but there are also solicitor fees, insurance policies and, in some cases, stamp duty to cover, and this is all before you move in when other costs come into the equation.
In order to determine your overall budget, speak to an experienced financial advisor to get an idea of what you can comfortably and realistically afford.
2. Build up your deposit
It can take years to build up a deposit of 5%, depending on your salary and financial situation, so it’s a good idea to start saving early.
The deposit you save should ideally be between 5-20% of the value of the property you’re looking to buy. For example, if you were looking to purchase a home for £230,000, you would need at least £11,500 to hit the 5% mark.
The 5-20% approximation helps to ensure that you will be accepted for a mortgage, as you are providing clear evidence of your available funds.
In order to boost your savings, we’d recommend setting up a Lifetime ISA or similar account, as the government provides you with a bonus worth 25% of what you pay in (up to a set limit) every tax year.
It may be easier for you to aim for 5% to begin with and then continue to build upon the savings you have, but it’s important to remember that the bigger the deposit you have, the better the mortgage rates available to you will be.
3. Search online for potential properties
After meeting with your mortgage or financial advisor and whilst saving your deposit, the next step is to start looking at homes.
Online portals such as Rightmove and Zoopla provide a variety of properties from a range of estate agents, and the websites include filters so it’s easy to select your budget as well as your other specific requirements.
For example, you may have the number of bedrooms and bathrooms required in mind, or perhaps you’re specifically looking for a bungalow or an apartment.
Although it can be tempting to start with this step – and if you’re interested in buying a house, you will have likely already browsed these sites – without a clear budget, it can be difficult to determine whether you are looking at the right properties in the right areas.
4. Agree on a Mortgage in Principle
Before viewing properties and considering putting in an offer on a house, you need to agree on and confirm a mortgage in principle with a lender.
It’s useful to get in touch with a mortgage or financial advisor for advice and support on how to acquire the best mortgage offer for you.
Your advisor (or the lender) will run a credit check on you to check for any outstanding issues, as this will help them to make a decision as to whether they will lend you money for your mortgage.
A mortgage advisor can then help you to compare and contrast a variety of mortgage offers, including whether they are fixed rate or tracker mortgages, the varying interest rates, the length of repayments and cashback opportunities.
Once you have selected a mortgage offer that suits your budget, you or your advisor will submit your application to the lender, and then it’s a case of waiting until your application is accepted.
5. View a variety of properties
Once you have received your mortgage in principle or even while you wait for approval, you can start to book property viewings and begin the search for your perfect home.
Although it’s best practice to wait until you have your decision in principle, unless your advisor or lender has flagged anything that may be a serious or unsolvable issue, you’re safe to view properties.
It’s important to visit a number of different properties in different areas and take your time when considering making an offer.
Don’t restrict yourself by only viewing one type of house within a small radius, as depending on the property market, you may be missing out on a long list of houses just outside of your desired location that is better suited to your needs and budget.
6. Make your offer
After viewing several properties and finding your dream home, it’s time for you to put in an offer.
Don’t be afraid to put in an offer lower than the asking price but be sensible about how low you go. For example, offering £50,000 less than the asking price may cause you to lose out on a property you love.
However, offering £195,000 for a property on the market for £200,000 is a more reasonable offer that will likely be met with a more positive response.
Be sensible with your offer, and there is always the option to consult with your financial advisor to ensure you’re making the right offer based on your budget and the value of the property. Remember, though, it’s ultimately up to you how much you are willing to offer for a home.
7. Contact a solicitor
At this point in the purchasing process, you should have an accepted offer, and there are legal agreements that need to be made for the legal transfer of the property.
For this process to go smoothly, you will need to contact a solicitor to conduct conveyancing on the property and keep in mind although all solicitors are qualified to do this, some are more qualified than others.
This process requires solicitors to review contracts, deal with the land registry and stamp duty (if applicable), transfer money during the sale, and conduct a survey of the property.
Once your offer is accepted, you need to be on hand to provide information and fill out any forms sent your way so all parties can carry out their role and keep the process moving.
8. Arrange a professional survey
It’s important to arrange for a professional survey to be done on the property you are purchasing, as this will flag up any potential issues, which will save you money in the long run.
This survey can also be referred to as the property searches that take place before the exchange and completion of a purchase, and solicitors will inform you of issues such as flood risk, access rights and planned future developments.
The solicitors you are using during your purchase will usually conduct your searches for you before you exchange and complete.
The property survey will usually be the final step in the conveyancing process, and if both your solicitor and mortgage lender are happy with the outcome, it will usually take a few weeks to swap and sign contracts between you and the seller you are purchasing from.
9. Arrange a completion date and get ready to move
Once all contracts have been signed, it’s time for you to arrange a completion date and make all of the appropriate arrangements for moving day.
At this point, it’s time to consider which companies you will use for your monthly or annual outgoing bills, such as water, energy and broadband, and purchasing the furniture items you need.
Then it’s finally time to move!
When in doubt, it is always best to speak to a mortgage advisor to have a clear picture of the property market and its obstacles, as well as your budget.
If you require expert mortgage advice for purchasing your first home, get in touch with us today!