The Definitive First Time Buyer Guide to Buying a House
Up there with getting married and having a child as one of life’s most stressful experiences, making the decision to buy a house is often the start of a long, frustrating and exhilarating process. A first time buyer guide to buying a house can make the task less confusing and much more straightforward, regardless of how many viewings and mortgage applications it takes before the ‘For Sale’ sign can be switched to ‘Sold’.
First Time Buyer Guide To Buying a House: Step One
Working out how much deposit you need for a house and finding a house you want to buy presents something of a chicken and an egg conundrum – do you save for a deposit first without really knowing the exact amount you need or view properties first and risk finding a house you love but can’t afford?
When you first start thinking about buying a house, it’s impossible to know how much of a deposit you’ll need and therefore, how much and for how long you’ll need to save, without first getting an idea of the kind of house or flat you like, what typical houses you like are selling for and which areas you can afford to live in. Invariably you’ll need to compromise on one or two aspects of your first home. It may be that you can afford a house with the number of bedrooms you want and a large garden and garage but not in your first choice of area for example, so looking around will allow you to figure out a savings strategy.
First Time Buyer Guide to Buying a House: Step Two
Having saved for the deposit, comes the fun step of conducting viewings and searching for a house that ticks all of your boxes. Before you set out to view properties, it’s worth having an idea of the kind of features you want – do you need a certain number of bedrooms, is a garage a deal breaker? Would you like a large or small garden? Are you looking for a house that doesn’t need anything doing or, are you willing to consider a property that needs work but would allow you to put your own stamp on each room? Does the house need to be near good public transport links or schools? Discussing these points before you start looking at houses for sale can result in less wasted time, with fewer unsuitable properties.
First Time Buyer Guide to Buying a House: Step Three
When you’ve found a house you like, putting in an offer and finding a mortgage should top your To Do list. Some first time buyer guides to buyig a house differ on whether you should start the ball rolling on your mortgage application process before or after you place an offer but, the two can be done more or less at the same time. Finding a home loan is one of the most difficult parts of the process simply because of the level of choice available and amount of nervous energy expended!
There are a number of 95% mortgages now available on the market, although lenders typically set very stringent requirements on those with a 5% deposit. A 90% mortgage or even 80% mortgage are easier to come by and make sounder economic sense in the long term as interest rates are usually lower. Most first time buyers purchasing homes this year have done so with an 80% LTV, so be prepared for this when applying to lenders.
Applicants will typically be asked for pay slips and proof of incomes as well as other financial information such as amount of outgoings, credit card debts etc. Having all of this information handy before you go to the bank can speed up the application process.
First Time Buyer Guide to Buying a House: Step Four
With the mortgage application done, the next step is to arrange conveyancing. This is a series of searches carried out by a conveyancer – many solicitors offer this service so a suitable person will be easy to find. While the conveyance checks local records for things like subsidence and conducts water and mining searches, the bank will arrange for a property valuation to be carried out for mortgage purposes.
Provided the property is found to be worth the asking price by the bank and the searches carried out by the conveyance have not unearthed any problems, the legal process of transferring ownership of the property will continue. Contracts will be signed and exchanged and a completion date finalised. The completion date is the date when the money to purchase the property will be transferred to the vendor and the keys given to the buyer.