Buying your first house is an exciting endeavor, but can also feel overwhelming. It’s a long and complex process, with lots of legal documents to read, applications to make, and financial hoops to jump through. To help you know what to expect, here are eight steps to buying your first home.
1. Start saving up your deposit
In order to buy your first house you will need to pay a deposit of at least 5% of the purchase price. If you can manage it, a larger deposit is better because it will enable you to access a wider range of mortgages at more preferential rates. Those who are struggling to save up enough money might consider one of the help to buy new builds, for which you can take out a loan from the government.
2. Find out how large a mortgage you can get
Before you start looking at properties, you should find out how much a mortgage provider will be willing to lend you, as this will determine which houses you can afford to buy. The provider will look at factors such as your income, outgoings, the size of your deposit, and your credit score in order to make a decision.
3. Apply for a Mortgage Agreement in Principle
This step is not strictly necessary, but can make you seem more attractive to sellers and estate agents. It’s basically just a confirmation that a mortgage lender would, in principle, lend you a certain amount of money if you applied for a mortgage with them.
4. View properties
Once you know how large of a deposit you can save and how big of a mortgage you can get, you can start looking at houses! Remember to make a list of all the factors to check during a viewing, research the local neighborhood, and ask any questions you may have.
5. Make an offer
After you’ve found a house or apartment that you love, you can make an offer to purchase it. It’s fine to offer lower than the asking price, but if other people are interested in the property you may end up having to offer more. Telling the estate agent that you’re a first-time buyer can work in your favor because you won’t be in a chain. Just don’t be persuaded to offer more than you can afford!
6. Apply for a mortgage
There are lots of different types of mortgages available – for example interest only and repayment, fixed rate and tracker – so be sure to do your research and speak to an advisor to figure out which is best for you. Online calculators can help you work out what your monthly costs will be.
7. Get a survey
Before signing anything you should definitely get a professional survey done on the property you’re thinking of buying. This will flag up any potential structural issues with the house so that you know exactly what you’re buying and can budget for any necessary repairs.
8. Exchange contracts
Once you’ve exchanged contracts, the purchase is legally binding – so you can relax and start preparing for moving day. This is also when you’ll actually pay your deposit. Congratulations, you’ve just bought your first home!