Buying your first house can seem a pretty daunting prospect. It’s the biggest investment and financial transaction that most of us undertake during a lifetime. You need to be certain, first of all, that it’s the option for you and there a number of issues to get in place, including that all-important deposit.
Getting the Deposit
First and foremost, if you have decided to buy you need to arrange your finances. The key is going to be getting the deposit together – essentially the down payment on your mortgage. The general rule is that the bigger deposit you can provide, the more favourable a mortgage rate and deal you will be able to get. Most experts say that you need between 5 and 25% of the property value as a deposit. How much you can provide is certainly going to depend on where you live. If you are buying a house in London, for instance, the prices are going to be much higher and your deposit will obviously not go as far as you might like.
Looking for a Mortgage
The loan for your property is called a mortgage and there are plenty of different deals out there to choose from. This is one place where you really need to do your research and make sure you get things right. You also need to ensure that you have the financial security to handle a loan of this size – mortgage providers are a lot more rigorous nowadays in their lending procedures after the financial crash.
Before looking at a first time mortgage it’s a good idea to check out any government schemes that are available. There is a help to buy scheme for England where you can get a 20% loan for a property worth up to £600,000 which means you only need to get an 80% mortgage. Scotland and Northern Ireland also have their own schemes.
You can find out about help to buy schemes here.
Extra Charges
When you are buying a house, you need also to consider extra charges such as surveyor and solicitor fees that can be quite substantial. If the value of your house is over £125,000 you will also have to pay what is called Stamp Duty which starts at 2% over this amount. You will also want to think about costs of work that needs to be done on the property you are buying and how this will impact your budget as well as things such as buildings insurance.
Finding the Right Property
Once your finances are sorted and you are in a position to buy a house, the next step is finding the property of your dreams. There is a much wider choice available nowadays with online portals such as Zoopla. You can, of course, choose to go to a local estate agent who might be able to give you a better one to one service. When viewing any property, it’s a good idea to have a few pertinent questions in mind. For example, how long the house or flat has been on the market and whether you will need to do work on it such as put in new heating, windows or other renovations.
Making an Offer
When you have found your property, it’s time to put in an offer. You might also need to provide proof that you have access to a mortgage and that this will go through if the purchase goes through. If you your offer is accepted for the property, it’s time to carry out surveys and engage a conveyancing solicitor.
Your solicitor will arrange the exchange of contracts and deal with matters such as Stamp Duty. The terms of the sale will need to be agreed and, hopefully, your mortgage approved and you will be locked into a legally binding agreement to buy the property. The final stage is completion day when you pick up the keys and move into your new house.