Buying your first home is a significant milestone, but the process can seem overwhelming. To help guide you on your journey, we’ve outlined the essential steps involved and some helpful tips for navigating each stage smoothly.   

Begin Assessing Your Financial Situation  

Before venturing into the housing market, conducting a thorough assessment of your financial health is crucial.   

Evaluate your savings: Savings are essential for covering the upfront costs of the service, such as your down payment and closing costs. Your down payment is a substantial upfront expense that can vary depending on location and other factors. The average down payment on a UK property for a first-time buyer is typically between 5% – 10%. Additionally, it is essential that you are aware of and budget all the necessary closing costs to ensure you are well equipped before reaching the final stages of the process.   

Check your credit score: Checking your credit score is a good place to start, as it influences your mortgage eligibility, and the interest rates you qualify for. If your credit score is high, it will portray to lenders that you are a responsible borrower, and there is a likelihood that you will repay your debts on time. Conversely, a lower credit score may signal potential risk and result in higher interest rates or difficulty obtaining a mortgage. You can review your credit score through a credit agency like Equifax or Transunion.  

Tip: If you are looking to improve your credit score, try one of these methods:  

• Register to vote  
• Demonstrate your ability to manage credit repayments. For example, getting a credit card, and paying on time each month 
• Reduce the amount of credit you rely on  
• Review your financial links and remove any that are potentially harmful  

Schemes for First-Time Buyers

For many first-time buyers, financial constraints can make homeownership seem unattainable. Fortunately, various government schemes are available to support aspiring homeowners in overcoming these challenges.   

The Help to Buy Equity Loan Scheme assists buyers in purchasing a new-build home with a low deposit. The government provides up to 20% equity loans, or as high as 40% in London.   

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Shared ownership is a unique option which allows first-time property buyers to purchase a share of a house while paying rent on the remaining share, gradually increasing ownership over time. This scheme is particularly beneficial for buyers who don’t have access to the full deposit amount. 

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The Starter Homes Scheme offers discounted properties for first-time buyers under 40. These newly built homes are sold at a minimum discount of 20% below market value. To qualify, buyers must meet specific criteria, including income limits and a commitment to live in the property as their sole residence for a specified period.  

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The First Homes Scheme provides new-build homes at a discount of at least 30% below market value. These discounted properties are prioritised for local people and key workers to address housing affordability issues in local communities.  

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Exploring Your Mortgage Options

Navigating the array of mortgage options available can be daunting, but understanding each type is crucial for making an informed decision.   

Fixed-rate mortgages offer stability with a set interest rate over a specified period, typically two, three, or five years. The five-year fixed mortgage rate is most common for first-time buyers. This provides the security of fixed monthly payments, appealing to those seeking predictability.   

Tracker mortgages, on the other hand, fluctuate with interest rate changes. While this means monthly payments can vary, tracker mortgages often offer competitive rates. As this mortgage comes with the risk of payment increases if interest rates rise, it makes them more suitable for buyers with shorter-term home ownership plans or a high tolerance for risk.  

Meanwhile, offset mortgages offer an opportunity to link your savings to your mortgage, reducing the overall interest paid. While you won’t earn interest on your savings, you won’t pay interest on the portion of your mortgage balance offset by those savings.  

Choosing a mortgage that aligns with your needs and budget expectations is crucial, particularly for first-time buyers. As first-time buyers prioritise stability and risk reduction, they commonly prefer to use fixed-rate mortgages, which offer stability amidst market fluctuations.  

Finding the Right Property

Finding your dream home involves carefully determining what you require from a potential property to meet your needs and requirements. Start by making a comprehensive list of requirements which should include:  

• Location 
• Property type 
• Ownership structure 
• Size 
• Renovation potential 
• New build or older property 

Search for suitable properties using resources such as real estate agents, online listings, and property portals. Attend in-person viewings to assess properties firsthand, paying attention to factors such as condition, location, layout, and features.   

Tip: Utilise your estate agent: When viewing a property, ensure you do research beforehand and prepare questions to ask the agent to gauge an insight into the property’s condition, the area and any other queries you may have.  

Making an Offer

Making an offer on a property requires research, negotiation skills, and legal advice. We recommend researching comparable properties to gauge a general market value, strengthening your position to negotiate.  

During negotiation, ensure that you stick with the terms that align with your budget and priorities. We recommend you get legal advice to guarantee that the offer meets requirements and protects your interests. Once terms are agreed upon, you should finally submit a formal written offer that expresses your interest in the property.  

Explore our blog post here for further insights and advice on making a successful offer.  

Conveyancing & Surveys

Once your offer is accepted, the following steps involve conveyancing and surveys.  

Conveyancing is the legal process of transferring a property’s ownership. It requires the services of a conveyancer to ensure that all the necessary documents are completed accurately.  

Arranging a property survey provides valuable insight into the property’s condition, identifying potential issues or areas requiring attention. This information is crucial for making informed decisions about the purchase and may uncover hidden defects that could affect the property’s value or your future enjoyment.   

The Closing Stage

The closing process marks the final stages of the homebuying journey, culminating in the official transfer of ownership. Establish a timeframe for completing necessary tasks, such as finalising your mortgage, depositing essential finances, and signing paperwork.  

You will attend the closing appointment to review and sign various documents, including the closing disclosure, loan documents, and other relevant agreements. Once all these documents are signed and funds are disbursed, the keys to your new home will be released, officially making you a homeowner.  

Additional Costs:  

As exciting as becoming a homeowner is, it is common for first-time buyers to encounter unexpected fees, even after the closing process is completed. Therefore, it is advisable to research associated costs in addition to the property’s purchase price.   

Examples of additional costs to expect include:  

• Legal Fees  
• Moving Expenses  
• Stamp Duty  
• Survey Costs  

By accounting for these expenses in the initial stages of your buying journey, you can ensure a smooth transition without experiencing unexpected financial burdens.  

Conclusion  

In conclusion, navigating the homebuying process requires careful planning, financial preparation, and informed decision-making. By following our guide and enlisting professional services, you can embark on your first-time buyer journey with confidence and peace of mind.  

If you’re looking to buy a house and need to sell your current house quickly, get in touch today. We Buy Any House will get you moving, with a sale in as little as 3 days. 

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