The property market in 2023 is complex and ever-changing. First-time buyers have many things to consider as they prepare to make their move. There’s a lot of information to sift through and a lot of guidance out there online – so much so that knowing where to start is its own challenge!
Thankfully, if you’re hoping to hop onto the ladder this year (most likely after a long time spent saving, daydreaming about paint colours, and watching houses in your ideal area), these tips are exactly what you need. They should help ensure you’ve covered every base at a time that is well-known to be equal parts thrilling and overwhelming.
Follow our guidance and step into homeownership with deserved confidence. It won’t be long before you have a brand-new set of keys in your hands!
1. Identify Your Ideal Deposit Amount
To access most mortgage options, you’ll need a deposit of at least 5% of the total property price. The bigger, the better, though – a larger deposit will reduce your monthly repayments and the amount of risk associated with your approval in the eyes of lenders. Weigh up when you’d like to buy and how much you have saved, then carefully identify your ideal deposit amount. Don’t forget that better deals arrive as your loan-to-value (LTV) ratio decreases!
2. Think Carefully About What You Can Afford
With a commitment as important as a mortgage, you must avoid stretching yourself too thin. Crunch the numbers and decide what you can actually, reasonably afford in terms of monthly repayments (in a good month and a bad month) before you ask what a lender would be willing to offer. That way, you won’t be tempted to overextend. (Don’t forget to account for surveys, legal fees and moving costs.)
3. Look Into Possible Buying Schemes
First-time buyers often qualify for certain private and government-run schemes. Shared Ownership is a possible option, as are Equity Loans to help with the cost of building a new home, turning a ‘commercial property into a residential property’, or demolishing ‘an existing property and replacing it with a new home’.
4. Don’t Forget Your Credit Score
You don’t need a perfect credit score to buy a home, but the better your score is, the higher your chances of approval usually are. Make sure you use credit but keep your utilisation low (ideally, less than 30% of the limit). Pay your credit card balance in full each month (or pay off as much as you can above the minimum amount). Don’t make too many applications. Don’t miss any payments. Over time, consistency and careful credit-building are sure to pay off.
5. Seek Advice from a Professional
Many first-time buyers choose to seek out a professional for advice and guidance. Making sense of the jargon isn’t easy alone, but it’s a piece of cake with some support. A mortgage adviser can help you to make sense of everything and secure a suitable mortgage for your circumstances. They’ll also often have access to deals from a wide range of lenders.
6. Get an Agreement in Principle ASAP
Before you start viewing properties and making commitments, get a mortgage agreement lined up in advance in the form of an Agreement in Principle (AIP). This will clarify your budget and prove to estate agents and sellers that you’re a serious buyer. The AIP will usually include a soft credit search, and while it’s not a guarantee of anything, it’s a critical first step along the journey to mortgage approval and homeownership.
7. Research, Research and Research Some More
Knowledge is power, and research is key for a first-time buyer at every stage of the process. Your research will help you determine what you can afford, which areas might be right for you, and which mortgages are the best on the market. With a substantial financial commitment like this, there’s no such thing as too much information.
8. Ask Plenty of Questions during Viewings
How long has this property been on the market? Are there other interested parties? Why is the owner selling? What’s included in the sale? Have any of the rooms recently been renovated? Could any local plans impact homeowners? Asking these questions when you attend a property viewing is a must. A home is a considerable investment, and you want to build the best possible picture of the property before you think about purchasing it.
9. Always Get a Survey Done
A house survey is a detailed inspection of a property’s condition intended to highlight the need for any major repair or maintenance – for example, fixing a leak in the roof. Once you’ve found a property you love, made an offer and had that offer accepted, a survey is essential. Some leapfrog this step to avoid the expense – but that isn’t worth the risk! It’s imperative that you ensure the house you’re buying isn’t suddenly going to cost you a lot more than you anticipated.
10. Organise your Documents in Advance
The last step of the home-buying process is often filled with paperwork, and if you’ve failed to prepare in advance and ensure you have everything to hand, it can be a very stressful step indeed. When you apply for a mortgage, most providers will ask for proof of ID, proof of income, proof of deposit, household bills and bank statements. Dig these out in advance if you can, and get ahead of the curve to avoid unnecessary anxiety at a later, more time-sensitive moment.
Please don’t hesitate to contact a member of the team to find out more about the topics covered.