Signature’s First-Time Buyer’s Guide
Buying your first home is such an exciting time, but it can be very overwhelming. Buying a property is probably one of the most significant purchases you will ever make and getting the right advice from the start is so important, which is why we decided to put together a First-Time Buyer’s Guide that outlines the process of purchasing a property from start to finish as well as some frequently asked questions from First-Time buyers.
What is the first step?
The first step when starting your property journey is saving for your deposit. Generally, you need to try and save a minimum of 5% however depending on your circumstances, you may need to save more. Also having a larger deposit can potentially open up better mortgage products that lenders have available.
If you are at the very start of your journey and looking at options for saving your deposit, there are government backed schemes to help, such as a Lifetime ISA. This is a great option as the government will add a 25% bonus to your savings up to a maximum of £1,000 each year.
There will be other savings and ISA choices available, you can speak with your bank to see what they have to offer and see what option is best for you.
Once you have your deposit saved, you can then start to investigate your mortgage options.
Finding a mortgage
There are very few people who are lucky enough to be able to buy a property outright, especially a First-Time buyer, so the vast majority will need to look at a mortgage. A mortgage is no different to any other type of loan, a lender (bank or building society) will lend you a sum which you will agree to pay back over a certain period. Depending on individual circumstances, the maximum length of the loan can be up to 40 years.
There are a lot of factors that come into affordability and how a lender will see you, but the main things that are looked at are: income, outgoings, credit score and deposit saved. This step can be very daunting as there are so many lenders available with different deals and some lenders who are not even available on the high street.
To ensure you are getting the best deal possible, we would recommend getting some financial advice from an experienced mortgage broker/financial advisor.
Here are Signature we have a team of mortgage experts with years of experience and knowledge to help support you through this process. Click here to book your free, initial appointment – https://www.wearesignature.co.uk/finance/
Once you have crunched all the numbers to figure out what you can afford, you will apply for a mortgage in principle. A mortgage in principle is referred to as an Agreement in principle or Decision in principle. This is a document provided by the lender to show how much they would be willing to lend you. It is a good idea to have this document before putting an offer in on a property as Estate agents will ask for this as proof of affordability. Sometimes certain sellers might not even let you view the property without one.
Setting up a home for the first time is not an easy task and knowing about these one-off expenses upfront will help you plan accordingly. The main ones are:
- Stamp duty (for more info, please follow to the GOV website – https://www.gov.uk/stamp-duty-land-tax/residential-property-rates)
- Solicitor’s fees
- Arrangement fees for your mortgage
- Cost of organizing surveys
- Hiring a removal service
- Costs of any refurbishment or repairs to the property
- Decorating expenses
Searching for your property
Now you have got the boring but essential number crunching out of the way, its time for the fun part… Looking for your first property.
You can easily browse properties available on sites such as Rightmove, OntheMarket and Zoopla however when it comes to getting targeted properties that you are looking for, registering your interest with local trusted estate agents is by far the best method to get your search underway.
You can register your requirements with Signature here – https://www.wearesignature.co.uk/registration/
Remember that you will find the perfect property eventually, don’t settle out of fear as new properties come on the market all the time!
Putting in an offer
Once you have found the property that you love and you have your mortgage in principle sorted, you will want to call the estate agent as soon as possible to put in your offer.
There are some things you can ask the estate agent before putting in your offer to get a better understanding of the situation such as length of time on the market, how much interest has it had, any other offers on the table or that have been rejected previously, what is the seller’s onward plans?
Once you have decided to go ahead and put an offer in, you will want to ring the estate agent as soon as possible. From speaking to the estate agent and getting a better understanding of the property and the seller’s situation, you should already have an idea of what you would like to put forward. Once you have made the offer to the estate agent, they will speak with the seller to put the offer forward who will then decide to either accept or reject the offer you have placed.
Sometimes this step can take a bit of time going backwards and forwards to get to an amount you are both happy with.
What happens now you’ve had an offer accepted?
Congratulations on having your offer accepted! Now it’s time for the legal process to begin.
Once you have had an offer accepted on a property, you will want to go ahead and instruct a solicitor to carry out the conveyancing work for you. It is a good idea to research solicitors to find a firm you feel comfortable with. Speak with friends and family to see who they recommend, or your estate agent may be able to recommend a firm that they work with. Here at Signature, we do have a solicitor that we can recommend to you. Just speak with someone from our sales team and ask for your FREE quote to be emailed over.
Your solicitor will handle everything from here and will be your intermediary during the buying process. Once your solicitor has received the draft contracts from the seller’s solicitor, they will go ahead and apply for the local authority searches, this process can take a little bit of time. Once your local searches come back and they are satisfactory, you will then go ahead and apply for your full mortgage offer.
Once you apply for your mortgage, the lender will organise for a mortgage valuation to be carried out on the property you are purchasing. It can be a physical valuation or a drive by valuation, depending on the property however this is done by the bank to ensure that they are happy lending you the amount you have asked for against the property.
Once your mortgage is approved and all paperwork is completed, both party’s solicitors will look to exchange contracts. Once exchange has gone ahead, this legally binds you into an agreement with the seller. At this point your deposit will be taken from your bank account ahead of completion.
Once the big day finally comes around, the keys will either be handed into the estate agent handling the sale or handed to you by the seller directly however all of this will be worked out ahead of time.
Click here to book your appointment and start your journey with one of our expert financial advisors.