If you’re a first time home buyer looking to get on the property ladder, you might need to have your wits about you throughout the whole experience. Things are about to get emotional and slightly stressful. However, if it all goes to plan, it
SHOULD have a happy ending!
Here’s the top ten tips to bear in mind as you navigate through the paperwork, estate agents, unexplained delays at the bank and escalating costs of moving into your first home.
START SAVING – EVERY SINGLE PENNY
When you decide to get on the property ladder, you will need to save and you will need to save hard. If you have help from family, great, but if you’re doing it on your own you will need to be really strict with yourself. That will mean turning down invitations to big nights out, holidays and expensive purchases. It’s all about presenting yourself as fiscally responsible to the lenders.
BUT SHOW LENDERS YOU’RE GOOD WITH CREDIT
Now’s the time to turn all those minimum payments on your credit card up a notch. This will not only improve your credit score but show lenders that you’re good at handling credit.
CHECK YOUR CREDIT SCORE
It doesn’t take that much to get that credit score up. Some of easy ways of doing this include getting on the electoral roll and not opening up any new credit agreements for the period of time in which you’re being considered for a mortgage application.
GET AN AGREEMENT IN PRINCIPLE (AIP)
This is simply a document from your lender saying that you have been approved your mortgage. Making sure you have a copy of your AIP can go a long way. Owning this (which is free from your lender) will give assurance to sellers and agents that you mean business.
WORK OUT YOUR BUDGET
First time buyers will normally wait to see what mortgage amount they will be approved for, and then work out the type of house they can afford from there. This then gives you some idea of the deposit amount but also your mortgage repayments on a monthly basis. It’s slightly different with HiP, see how they have changed this to work in the first time buyer’s favour.
INVESTIGATE YOUR HOUSE’S FOR SALE PRICE
It’s good to have an idea where your potential house lies on the price barometer. Looking at sold prices on the street in the past 18 months gives you some indication if you’re getting a good deal or not. If the house has been on the market for some time, there’ll be a good reason for this, so investigate.
BEAR IN MIND THE COST OF MOVING
The act of buying a house isn’t simple. There are services that you cannot skimp on when buying a house that you will have to budget for. Services like your solicitor or conveyancer who will sort out the legal side of things for you (normally up to £1500 + VAT), or the survey which you’ll have to carry out before you buy the house (around £600 for a full structural survey). Then there’s stamp duty if it applies (a good few thousand pounds if your house is worth over £125,000), the valuation fee (£150-£1500 depending on the property value) and any removal costs.
TRY AND MAKE A CONNECTION WITH THE VENDORS
If possible. Sometimes, you might not even meet, but if you do, forming a rapport could make the difference of getting the house or not. In the melee of pushy estate agents and potential buyers, if you’ve made a good impression on the vendors, you might have swung it so they choose to accept your bid. It’s always worth a go.
SAVE SOME EXTRA MONEY FOR AFTER YOU’VE MOVED IN.
We know this is already costing you an arm and a leg, but squirrelling away some extra money for after the move will be a godsend. Typically, there will be an unexpected cost and you won’t know where from until it hits you in the face. You’ll obviously need to furnish the house, buy toasters and tea towels, cleaning products and lightbulbs – but when you own a house, be prepared for an emergency repair that comes out of the blue.
IF YOU’RE MOVING IN ON YOUR OWN, GET A HOUSEMATE
Perhaps enjoy a few months of having your own space, but after that, you might want to start thinking about your overheads – owning your first house by yourself is not cheap. Get a housemate in who can help you pay the bills and give you a bit of extra spending money. See it as a temporary move while you adjust your finances accordingly.