Buying a home for the first time is exciting, but it’s also a daunting task that places many obstacles in your path. In the UK, the dramatic mortgage rate hikes have made it necessary for first-time buyers to enter the market bringing with them at least a £62,500 deposit. After overcoming the hurdle of saving for a hefty deposit, the following tips can help you get started!
Consider Whether You Can Afford A Home
The first step before browsing dream properties is to consider how you can afford to buy a property. Usually, this is where you’ll need to find a reputable mortgage lender. Of course, in order to qualify for a mortgage, you need to put down a deposit as well as pay certain fees that are associated with purchasing a home. You may ask this mortgage broker Huddersfield to help you get your dream house.
Either a bank or a building society will usually offer to lend you the money in the form of a mortgage as long as they have cause to believe that you can pay it back. Usually, it’s customary to have about 10% of the property’s asking price as down payment and to pay off the remaining as a mortgage.
Unfortunately, the recent price hikes in the UK are making it more difficult than ever for first-time homebuyers; in order to own anything, more than one person needs to participate in the purchasing process.
*Before starting, use a free online mortgage calculator that can give you an idea of how much you can borrow. This will allow you to consider how much money you will need to save as a down payment.
*Be ready to compromise. Since buying a property is expensive, you may need to self-reflect and consider whether it’s the right logical step for you. Likewise, you may also need to compromise on size or location.
*Use a calculator online to help you find out the amount of interest rates you will need to pay.
*Pull your credit report and go over it with a fine-tooth comb. Take into consideration whether there are certain actions that you can take in order to improve your score. This is the report that all mortgage lenders are looking at when considering you as a candidate.
*Make an appointment with a mortgage broker and speak to them about any financial concerns that you may have. There are many things you need to think about when qualifying for a mortgage, and a broker can help you find answers.
*Make sure to work hard to have a large down payment. The more money you can put down, the less you will need to borrow from the bank. Of course, never ignore the importance of also paying for legal fees in the process.
How To Budget for Home Buying Fees
There are numerous fees associated with purchasing a property, and first-time buyers may need a bit of help. Here are some of the more commonly associated fees to consider:
*Conveyancing fees can run anywhere from £500 to £1,500. Usually, in order to buy a property, a conveyancer or solicitor is necessary.
*A land registry fee is also tacked on depending on the actual purchase price of the property. Usually, homebuyers can expect to pay anywhere from £90 to £140. Depending on your solicitor and location, this fee may become a part of your conveyancing package.
*Stamp duty charges are also important to keep in mind. First-time homebuyers have a fairly high threshold to take into consideration.
*A homebuyer survey is usually performed for £400 to £1,500 to give you an idea of the actual condition of the property. Getting a thorough survey will allow you to find out any potential issues with the property.
*The mortgage fee is essentially the charges slapped on by the lender for giving you the loan. This can run anywhere from £1,000 to £2,000.
*Valuation fees are also charged by the mortgage lender to confirm whether the property you’re looking to buy is worth the asking price.
*Indemnity insurance is recommended as it can protect buyers in case a problem with the property could lead to legal or council action in the near future. For example, if the previous homeowner undertook an illegal loft conversion, this insurance will protect you against further legal obligation.
*Building insurance costs will usually total about £110 per year and are considered a requirement by most mortgage lenders.
Tips For Posing Smart Questions
When purchasing a home for the first time, it’s essential to start asking the right questions. From the area you want to buy the property in to the amount you can spend, knowing what you want is important. Remain realistic about how much you can spend and also have a list ready of items you may be unwilling to compromise on.
Ask tough questions such as:
*How many bedrooms and bathrooms are a must-have?
*What local shops or amenities are important?
*Does the quality of the local school system make a difference?
Buying a home in this economy isn’t easy and it’s considered rather difficult. However, the tips above can help first-time buyers expand their knowledge and work towards acquiring their dream homes.