Buying your first home can be an exciting but extremely challenging time, especially when navigating the property market as a first-time buyer.
In our recent blog, mortgage director, Mark Chadwick offers some of his top tips when buying your first home and some key considerations as a first-time buyer.
Begin saving for a deposit early
Saving for a deposit is a crucial part of the first-time buyer journey, especially if you want to reduce your monthly mortgage payments. The sooner you start saving, the bigger deposit you can put down, which could save you a lot in monthly interest payments.
Budget and tracking your expenses each month is a really helpful way to stay in control of your finances, there are many applications you can use to help you with this. These can help you track your weekly spending so that you can figure out which areas you can cut back to save money and give you a realistic view of your spending patterns.
You may also want to consider signing up for government schemes such as the Lifetime ISA which offers tax relief on contributions up to £4000. This can assist you with an initial step onto the property ladder.
Plan for the future by considering location
Location is a crucial part of your buying journey. Finding the right location can significantly impact your costs and future plans. You should check the area for things such as schools and public transport as these factors can affect future resale value.
When selecting an area with potential for value appreciation, you should also consider council tax bands. More reputable areas often have higher council tax bands, which can be an indicator of future value growth. This is something to factor into your budgeting as higher council tax bands mean higher monthly costs for you.
Be conscious of the additional costs involved
When you are in the initial stages of looking for a house, budgeting is a key part of your planning. You should also be aware of any expenses that are associated with buying a house. Some key things to consider include:
- Solicitor/ Conveyancing fees.
- Mortgage costs – consider the cost of a mortgage adviser, as well as your monthly mortgage payments.
- Life insurance.
- Deposit – this usually ranges from 5%-20% of the property’s value.
- Stamp duty – this is only relevant to first time buyers if your home is worth more than £300,000.
- Home insurance – this may be required by lenders and protects against any damage or loss.
- After purchase costs – it is important to consider those costs that come after buying your home. Things such as council tax and operational expenses (gas and electricity for example).
Ensure your mortgage payments fit within your budget
When looking to purchase your first home, it is important to consider the price range of property that you can realistically afford, so that you can ensure you’re able to keep up with your monthly mortgage payments in the long term.
You need to consider all costs to get a basis for the total price. Securing a mortgage in principle first can help you understand what lenders are willing to offer you. Once you have this, you can start looking at houses that fit within your budget.
Consider your credit score before purchasing
Credit score is something strongly considered by lenders when looking at mortgage rates and terms. A higher credit score means that lenders are more likely to approve your application for a mortgage and offer you lower interest rates.
To improve your credit score, ensure you pay any credits in time to avoid late payments, which will directly impact your credit score. You should consider setting up a monthly direct debit to automatically clear any debts from the previous month.
Registering on the electoral roll can also boost your credit score, which is highly beneficial when applying for a mortgage.
Contact a mortgage adviser
Navigating the world of mortgages as a first-time buyer can be challenging with limited knowledge. That is why it is important to get independent advice which is tailored to your personal circumstances. Using an independent whole-of-market mortgage adviser will ensure you receive unbiased, comprehensive advice tailored to your unique financial situation, helping you navigate the complexities of mortgage options and secure the best possible deal.
At PM+M, our expert mortgage adviser, Mark Chadwick, can provide you with informed recommendations about the most suitable mortgage products available to you. He will be able to guide you through the process of purchasing your first home with ease so that you can make the correct choices for you and your financial goals.
For further advice and to explore your options, please contact our mortgage director, Mark Chadwick, by clicking the button below.
PM&M Mortgages Ltd is an Appointed Representative of The Right Mortgage Ltd, which is authorised and regulated by the Financial Conduct Authority.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.
