Posted on Febuary 17, 2022 at 5:17 PM
Getting on to the property ladder is extremely exciting, however it can also be incredibly daunting. It is no secret that it can be an expensive process to buy a house, as not only do you have to pay a deposit, but there are also solicitor fees, valuation fees etc., but it will all be worth it when you receive the keys to your first home! As there is a lot to think about before even starting the process, we have put together a few tips to help you get there.
Get your finances in check
When applying for mortgages, banks, building societies and mortgage lenders will check your finances to see if you will be reliable enough to pay your mortgage back and to make sure you are eligible for the loan. This means you should look at a few things.
Firstly, it is important to have a good credit score. There are multiple websites that can help you check this, and many banks also offer this service. To ensure you have a healthy credit score, make sure to pay any credit card bills on time and try to regularly clear any outstanding debts so you are starting with a clean slate.
Saving is also very important before buying a house, due to the fact there are so many different payments and fees to be made. You will usually have to make a “payment on account” to your solicitor once you have had your offer accepted on a property to get the legal process moving forward. This will cover the search fees and some parts of their initial administration fees.
When making an offer on a property, you need to remember that you will usually have to have saved for the deposit, which on average is around 10% of the price of the property. This payment will be made when you exchange contracts, so you need to make sure you have the correct amount to hand and that it can be easily accessed on the due date, as well as any other fees that may be paid in the process.
Research schemes to help first time buyers
Whilst it is expensive to buy your first home, the Government and Banks have provided some aid to make the process a little easier to get into.
If you have a “Help To Buy” ISA account that was opened before November 2019, you can still use it for your house buying deposit if you buy before December 2030. You can save up to £200 a month and the account will give you a 25% bonus on your savings.
More popular now is the “Lifetime” ISA – you can save up to £4,000 a year into this account so long as you make your first payment into the ISA, even if it’s just £1, before you are 40. A 25% bonus will be added up to a maximum of £1,000 a year.
Other schemes worth considering are Shared Ownership and the Mortgage Guarantee Scheme which was introduced in 2021 to help buyers to purchase a property with just a 5% deposit.
All of these might help you start your home buying process a lot earlier than you thought. It is worthwhile looking and seeing which of these schemes will be most beneficial to you and your circumstances.
Be realistic in your property search
It can be easy to imagine your dream home and what it is going to be like as soon as you move in, but it is important to be realistic in your search.
We would always recommend speaking to a financial adviser before you go “shopping” to get a realistic idea of what you can borrow and what you can afford. Then you can be realistic in your property search and consider property size, location and condition.
Will you have any updating or renovations to do? How much the deposit will be? Is it the right area for you? There is so much to think about, and it can often seem very overwhelming but by taking it one small step at a time, your dream home could be closer than you think on that ladder.
To find out more about other factors to take into consideration and how we can help you take the first step, don’t hesitate to get in touch.
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