Buying Your First Home

When buying your first home

When you are looking to get your foot on the housing ladder, it can seem like a daunting task.  Even if you've an idea of the type of property you would like, what sort of things should you look out for?  Then there are estate agents, solicitors, sorting out the finance, exchanging contracts and not forgetting the move itself.  Consider what's important to you: will it be close to your place of work?  What are the transport links like?  Are there shops, doctors and other amenities nearby?

Where do I look for suitable properties?

Register with a variety of estate agents, they will send you details of homes in the area and price bracket you are interested in.  Check the property pages of the local newspapers; these will also include homes not being sold through estate agent, which might be cheaper.  Explore property websites at your leisure, most estate agents have websites showing details and pictures, so you are less likely to waste your time visiting unsuitable homes.  You may wish to consider shared ownership or the national Home Buy Scheme.

How much can I afford to borrow?

On your own (single applicant) - it varies depending on your circumstances - but typically ranges from 3.5x your annual income up to 5x your annual income.

With someone else(joint applicant) - you could borrow around three times the first applicant's income, or two and a half times your joint income.

Getting a solicitor

Once you have found the home you want, you will need to appoint a solicitor, or a conveyancer to make it legally yours.

Your solicitor will:

-         check your future home's legal documents called the 'title deeds'.

-         Check that the local authority has no plans that might affect your home's valuation such as new roads or nearby buildings.

-         Ensure any items the seller agrees to leave in the house are included in the sale.

Once everything is in order, your solicitor will:

-         Negotiate with the seller if the house needs any repair work or you want to lower your offer.

-         Arrange the exchange of contracts and complete the sale, that's when you'll own the home.

If you do not have a solicitor, it is worth asking your friends and family if they can recommend one.  Alternatively, you can ask your mortgage lender to send you a list of solicitors.

How much deposit do I need to pay?

If you are like most first time buyers, you will be trying to save up the deposit required to buy your first home.  After all, it can be expensive enough just paying for your day to day living expenses.

The minimum deposit depends on who you arrange your mortgage with.  It is usually between 5% and 10% of the property's value.  While there are some lenders who do not ask for a deposit (often called 100% mortgages), the interest rate you will be charged can be higher, as lenders consider it a greater risk.

If you can put down a bigger deposit, you might find you are offered a better rate of interest.  Plus you could avoid paying a higher lender charge (this is the fee charged by some lenders to protect them in case you can't keep up the repayments on your mortgage).

Do not forget all the other upfront costs involved in moving when you work out the size of deposit you can afford.

Examples of what costs will be involved

-         the deposit (between 5% and 10%)

-         Stamp duty

-         Solicitors Fees which would include their charge, Stamp Duty, Land Registry fee, Local Authority Search, Land Registry Search, Bankruptcy Search.

-         Household Building/Contents insurance

-         Removal Costs