Getting your foot on the property ladder can be a daunting prospect. With a home being the biggest expense you’re likely to make in adult life, as a first-time buyer you’ll want to find the best deal on your perfect home, whilst sticking to a budget.
Here are a few things that you’ll need to consider when buying your first home.
Many mortgage lenders require you to have a deposit of at least 10% and anyone with less than 25% of a property’s value will be charged significantly higher interest rates.
Saving up as much money as possible for a deposit will give you a cheaper mortgage deal and lower monthly repayments.
Don’t forget about the additional fees that you’ll have to pay too – arrangement fees can be as high as £2,500 and you’ll have to pay stamp duty on properties costing more than £125,000. Make sure you remember to factor these fees into your budget.
Improve Your Credit Score
To be approved for a mortgage, you need to think about your credit history. Banks want to know that when they lend money to you, you’ll be able to pay them back.
You can improve your credit rating by getting on the electoral roll.
Prospective lenders will use this to check your details. Living at the same address and working at the same job for a reasonable amount of time will improve your chances of being approved for credit.
If you’ve never had any credit before, it’s difficult for a lender to assess your financial history. Consider taking out a credit card. By making a few purchases on it a month and repaying the balance in full at the end of the month, lenders will be able to see that you can responsibly manage your credit.
Invest in Expert Knowledge
You’ll be spending tens of thousands of pounds on your new home so as a first-time buyer, it’s worth it to invest in some expert knowledge. Here are the areas where you could seek help from professionals:
- A good solicitor can give you valuable advice when buying your home and handle the legal aspects of your purchase
- If you want to find affordable housing, for example through an auction, you can consult a property consultancy like Allsop to help you find your perfect property at the best price
- When you’ve found a property, hire a surveyor to check for defects that might not be obvious to you as a first-time buyer