Ultimate Guide for First-Time Home Buyers

Buying a house for the first time is such an exciting step in your life, but we understand it can also be quite daunting. You might wonder, where do I even start? To help you on this journey, we have created a guide to help you understand the important steps and factors to consider.

 

Assessing Your Financial Situation

You might want to jump straight into viewing properties, but it's important to first take some time to review your finances. This will help you get an idea of your current financial situation, allowing you to prepare for the process ahead.

 

1. Savings: Before beginning your house-buying journey, you will need to consider two costs: the down payment and closing costs. By understanding how much you have for each of these payments, you can set a realistic budget and create an appropriate savings plan.

 

2. Spending Habits: Examining your typical spending habits is a great way to find areas in your life that you can cut back on to ensure you have enough money to secure the perfect first home. This could be reducing spending on dining out, entertainment at the weekend, or even subscriptions. Even making minor changes to these habits can free up extra money to go towards your savings plan.

 

3. Credit Score: If you're applying for a mortgage, you need to take some time to review your credit score. Lenders will use this to determine if you are eligible for a mortgage and how much interest rate you will pay. Organise to get a copy of your credit report and make sure to fix any errors.

 

If you're looking to sell a property quickly to fund the purchase of a new one, We Buy Any House can help speed up the process. They can sell your house in as little as 3 days, providing you with the funds you need to buy your new property.

 

Mortgage Options

There are lots of different mortgage options available, which can be quite daunting to navigate as a first-time buyer. Each option will have its own benefits, so finding the one that suits your needs is important. Here are three common mortgages for first-time buyers:

 

• Fixed-rate mortgages: This mortgage offer stability and consistency with a set interest rate for a set period, which is usually two, three, or five years.

 

• Tracker mortgages: A tracker mortgage will vary as the interest rate changes. They are attractive as they tend to offer competitive rates at the beginning, but you face the risk of increased payments if the rates rise.

 

• Offset mortgages: This option connects your savings to your mortgage, reducing the interest you pay.

 

First-time buyers often prioritise predictability with their finances, especially in the first few years of owning their home, so they typically opt for a fixed-rate mortgage.

 

Schemes for First-Time Buyers

There is no denying that buying a home can be an expensive process, which may seem out of reach for you at this time. However, there are some great schemes available to help you overcome these challenges and begin your journey to homeownership.

 

1. Shared Ownership: Allows you to purchase a share of a property and pay rent on the remaining share. This scheme aims to gradually increase your ownership over time, eventually owning the property outright.

 

2. Starter Homes Scheme: The starter homes scheme provides discounted homes for first-time buyers who meet certain criteria, such as age and how long you intend to live on the property.

 

3. First Homes Scheme: This offers new-build homes at a discount, prioritised for local people and key workers. This discount can be up to 30% below the property's market value.

 

It's important to explore the support available to first-time buyers and choose the option that suits your needs and requirements.

 

Finding the Right Property

When you're trying to find the perfect home, it can feel overwhelming as there are many factors to consider. To help simplify this choice, here are two helpful strategies to consider:

 

• Make a List of Requirements: List everything you require in your new home. Include your non-negotiable features, deal-breakers, location preferences, etc.

 

• Attending Viewings: Once you've found some potential properties that fit your list, attend viewings to assess them in person. Make sure to get the most out of the agents showing the property, as they can answer any questions you may have.

 

By following these steps when looking for your first property, you can simplify your search process and increase your likelihood of finding a home that fits your needs.

 

Conveyancing & Surveys

Conveyancing and surveys are typically the steps taken after your offer has been accepted on your chosen property.

Conveyancing is the legal process involved when you're transferring the ownership of a property. A conveyancer handles all this legal paperwork, ensuring all requirements are completed accurately so you can transition into the property smoothly.

Although a conveyancer is required during a house sale, a survey is not. However, we highly recommend getting a survey done on the property you intend to buy. The surveyor will assess the property's condition, identifying any potentially problematic areas that could impact its value or liveability.  

When you prioritise enlisting a conveyancer and a surveyor, you can reduce the risks you may face, ensuring a successful outcome.

 

Closing

As you approach the end of the process, the closing stages will begin. During this time, a number of tasks must be completed to finalise the sale and gain full ownership of the house.

We would recommend creating a timeline to ensure all tasks are completed quickly and efficiently. This includes depositing your money, signing all your paperwork and finalising the mortgage. Keep regular contact with your legal representatives and lenders to ensure they all stick to your timeline and stay on track with the process.

Once everything is in order, you will need to attend a closing appointment to sign the last of the paperwork to finally transfer the ownership of the house to yourself. Once this has been completed and all documents are signed and submitted, you will receive the keys, which will seal the deal and make the house your new home.

Buying a home, especially for the first time, can be intimidating. However, by following our guide and taking time to plan and prepare for the process, you can navigate the journey confidently.