A Beginner’s Guide to Buying Your First Home

Beginner's Guide to Buying Your First Home main

Everyone dreams of owning their own home. Unfortunately, the entire process of buying a property is much more complicated than you’d perhaps first assume. Since this is obviously such a substantial investment, you’ll want to make sure you’re following the right steps and getting the best value for money possible.

After all, your first step onto the property ladder is undoubtedly the hardest one to make, especially when you don’t know much about the property development market. In fact, there’s so much red tape and confusing paperwork involved, many first-time buyers feel completely overwhelmed by the entire process.

Before you work yourself up into a full-blown panic, however, we’ve put together some quick beginner’s tips for buying your first home in 2019.

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How Much is a House Deposit in the UK?

Typically, anyone hoping to buy a property will need to come up with a deposit of 10% of the purchase price, although some properties can require as much as 25%. Since house prices are rising and wages stagnating, many first-time buyers are struggling to save such substantial amounts of money—inevitably leading to a particularly slow market.

According to the most recent Halifax figures, the average cost of a house in the UK is just under £228,000, meaning you’ll typically need to save around £23,000 for a 10% deposit. By going through the Help to Buy scheme, you’ll need a deposit of just 5%, meaning you’ll need to save £11,500 to buy an average home.

Help to Buy ISAs are also a great option for those struggling to get a deposit together, since the government will add an extra 25% to any monthly contributions of up to £200. Alternatively, you might want to consider applying for a joint mortgage or adding a guarantor to the deed.

Work on Your Credit Rating

When buying a property, mortgage lenders will always carry out extensive checks on your financial background, making absolutely sure that you’re capable of making your mortgage repayments on time. Since you’re incredibly unlikely to be given a mortgage if you’ve got a bad credit rating, you should check on the status of your own score before making an application.

You can either check your credit report online or contact a credit referencing agency instead. Either way, if your credit rating is poor, then this will need to be improved before you can seriously submit a mortgage application. Although there’s no set minimum credit score required to buy a house in the UK, a credit score of 700 or above is generally considered good (according to Experian).

The best way to improve your credit score is by regularly paying off your credit card and household bills on time. Unfortunately, building a decent credit history takes time, but it’s an essential requirement when buying a property—even if you’re taking out a joint mortgage.

Beginner's Guide to Buying Your First Home house

Search Affordable Properties

Before you start looking for properties, you obviously need to start saving and figuring out what you can realistically afford. Of course, there’s absolutely no point in looking at properties which are completely out of your price range, since this will only result in you feeling a little disappointed in the home you eventually end up with.

However, you don’t just need to worry about the eye-watering purchase price or monthly mortgage repayments, because you’ll also have to consider all the additional costs involved. Solicitors fees, stamp duty, valuation fees and insurance costs all need to be taken into consideration, while you’ll also need to fork out to have the property properly surveyed. In short, buying a property is always incredibly expensive.

Once you’ve put together an estimate of how much it’s all going to cost, you’ll have a much clearer idea of what kind of property (and which areas) you can actually afford. From there, you can start browsing properties within your budget, while also making sure you aren’t struck by any unexpected costs.

Negotiate the Price

Finding the perfect home is certainly no easy task, and you’ll need to consider factors such as the size, location and price to make sure you’re buying a property which suits your requirements. But when you’ve finally fallen in love with a place, it’s time to submit an offer, hold your breath, and keep your fingers crossed.

However, you should by no means immediately match the asking price of the seller, since most of the fun in buying a property can be found in the haggling. Before submitting an offer, you’ll have to look into the prices of similar houses in the same area and develop an overall sense of the market. In addition, you need to ensure the property has been adequately surveyed and assessed, since this could uncover a genuine reason to table a lower offer.

Whether there are any issues with the property or not, you should always start with a lower offer to make sure you get the best deal possible.


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