Looking for your first home can be both exciting and daunting. Even though it will be the single largest purchase you ever make, a surprising number of first time buyers make costly mistakes in their choice.
Make sure you do your homework properly and you will hit the jackpot and get the ideal home for you.
1. Don’t overstretch yourself financially
Many first time buyers get as far as putting in an offer on a property before they realise that they cannot afford it or are unable to secure a mortgage on the property.
It is essential to know how much you can comfortably afford. This figure is calculated by adding up your monthly expenses such as credit card payments, motoring costs or transport fares, student loan repayments, food, health insurance, pension plans and food bills plus large annual expenditures such as holidays and insurance policies.
Once you have this figure, deduct it from your tax home pay and this amount is how much you can afford for mortgage repayments.
It is a well known fact that those trying to get on to the property market, often have to compromise with their first purchase, but the question you must ask yourself, is whether you are happy to do this or would you prefer to continue renting where you are probably compromising already!
It is a sensible move at this stage to approach your mortgage provider to discuss your plans and to get and ‘agreement in principle’ or ‘mortgage promise’ which will enable you to put an offer in on a chosen property.
These agreements are usually valid for 30- 90 days so do check and these can be impacted if you decide to take out a car loan or similar – so be careful.
Whilst mortgages with 10% deposits are available, there are some that need a down payment of just 5% and this is well worth checking out.
An important point to remember is that it usually takes 18-40 days to get approval for a mortgage – sometimes longer, so it is essential that you have started the mortgage application process before you make an offer on a property.
A small fact that many first time buyers overlook but can save lots of hassle, is to ensure that you are listed on the electoral roll as this can help verify your identity and not being on the roll can impact your credit score.
2. Consider all the expenses
Buying your new home is definitely going to be your largest bill, but home owners do incur plenty of others and these need to be brought into the calculations so that you are not caught out.
There will be conveyancing fees and a…
Continue reading the article and learn more about buying a home on Mike Gregory’s blog.