Top 10 Things First Time Buyers Need to Know

Buying your first flat or house can be a daunting process. It’s a huge expense and plays an enormous role in your life, so don’t go into it without doing the proper research. Here are ten absolutely vital things that first time buyers need to know before they purchase a property.

The process can take a long time

Buying a house is complicated. Even once you’ve gone through deciding on a location, completing affordability checks, agreeing on a mortgage and putting in an offer, there’s still the long process of searches, checks and conveyancing to wait out. While it might seem simple from your perspective, you also need to be aware that the seller may be in a long chain. That means that even if you are completely ready to buy, you might still need to wait. There’s nothing you can do about this, unless you can specifically buy a property that isn’t in a chain – just be ready to stay patient and hope for the best.

Affordability checks are exceptionally important

It might seem like a waste of your time to go through affordability checks with a financial adviser or mortgage broker, but remember that a mortgage is a huge commitment and means guaranteeing a lot of money every single month. It simply isn’t enough to do some quick sums where you subtract the monthly mortgage cost from your wages to establish whether you’ll have enough money – you need to factor in exactly how much you’ll have left to spend each month to understand what you can actually afford. Remember you’ll need to account for everything from insurance, maintenance costs and council tax to food shopping, bills and leisure activities. Go through this with a professional who will be able to work out exactly how much money you can expect to have left every month.

Inspect a property thoroughly before you commit

According to recent figures from Rightmove, average house prices in England and Wales have now risen above £300,000. That’s a lot of money –and given that the home is probably going to be the most expensive purchase of your life, you would think you’d spend several hours inspecting every aspect of the property to ensure that it’s perfect. In reality, most people have a maximum of two viewings lasting around ten minutes each. Spend this time wisely, and check through the little details.

You need to have a survey carried out

Following on from the point above it’s very important to have a full survey carried out. Remember that the seller does not need to reveal everything about the home and the buyer is considered to be responsible for establishing that they are happy to make the purchase. A surveyor will be able to tell you if the building has any structural weaknesses or problems with damp as well as the condition of brickwork, stonework, roofing and more. This takes a lot of the pressure off you to take in the state of the property and you can simply establish whether the size, layout and configuration suits your needs.

Not all mortgages are created equal

With a range of providers all offering a variety of different mortgages you need to take the time to work out which one is right for you. This is another example where it can be a great idea to talk to a mortgage broker as they will be able to go through all the details with you and pick out the right one for your needs. Picking the wrong mortgage can end up with you paying more than you need to or missing out on a great deal.

Don’t use up all your money on buying

Once you’ve set a budget for your first home purchase, there can be a tendency to look at properties that sit right at the upper limit of your price range. Ultimately this is fine as you have budgeted for them, but the problem begins when you start to look just above your price range and see properties that you think are ideal.

Doing so will mean you look for additional ways to get more money – this may mean dipping into savings and other backup funds in order to buy the home. This is where you can then encounter difficulties. If you’ve used up all of your money on buying the home, you’ll be in a very difficult position if you have any problems that need fixing. Not having the money to carry out repairs can leave you having to get a loan and entirely ruin your careful budgeting.

You might need to use tactics to increase your credit score

Many first time buyers don’t realise that their credit score might not be in a strong enough position to be accepted for a mortgage. If this is the case for you there are a few tactics you can use to increase your score and get approved. One of the best ways is to use a credit card regularly – but make sure you pay every month and pay it all off quickly. And remember that you shouldn’t apply for a mortgage several times in quick succession if you’ve already been rejected. Instead use a credit score checker to establish whether your score has improved before trying again.

Understand the difference between freehold and leasehold

Now is the time to learn the difference between freehold and leasehold ownership so you can make an informed decision about buying. Owning a freehold property means that it is yours outright, as is the land that it is built on. Leasehold properties are owned by a separate freeholder who then leases the property. The majority of houses are freehold while the majority of flats are leasehold.

Have a long-term plan

Too many first-time buyers don’t think about the long term when they make their purchase. You might be buying as an investment or as a long-term family home, but you need to be aware of your ultimate goals while you live there. Consider carefully how long you’re likely to spend in the property and how your circumstances might change. For example if you are thinking of having children and are likely to stay in the property throughout their childhood you need to consider the location of nearby schools and other amenities.

Get the right insurance

It may be tempting for first time buyers to find ways to reduce their monthly outgoings – but trying to save money on insurance is a bad idea. You need to have full buildings and contents insurance to ensure you are covered in the event of damage to your home.

Article contributed by Mike James, an independent content writer in the property industry. For the information in this post, Peter Barry Surveyors were consulted.

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