First Time Buying: House Help for Newcomers to Property
Buying a house is probably the biggest financial commitment you’ll ever make. It’s not as simple as picking something you want, getting a mortgage and moving in; it’s a lengthy, arduous and often frustrating process that could really test your patience and – sadly – temper. That is, of course, if you’re unprepared. A lot of first-time buyers are.
Like getting a credit card, it’s hardest to apply for a property and succeed first time around; by taking on board several key considerations listed below – alongside others, of course – you will give yourself plenty of things to think about – and enough to help yourself prepare.
Know what you can afford.
Mortgage companies are now more stringent than ever about their lending, so your choice of properties could be more limited than you realise. Mortgage companies always use the annual salary of those paying for a home as the guideline for the size of mortgage they will offer; it tends to range between four and five times a person’s total annual salary, though this can be above or below due to certain issues (bad debt, upcoming second job, the house you’re buying, etc).
Consider the other costs on top of the house itself.
It’s not just the price of the house that you have to budget for – there’s a cavalcade of other things you’ll need to account for. Legal fees alone can be pricey; solicitors transferring ownership will need to be paid. Stamp duty is also a hurdle; this levy stands at one per cent of properties costing between £125,000 and £250,000. There are also mortgage administration and Land Registry fees that will be discussed by your mortgage provider. Don’t forget the price of furnishings, especially if the house is dated and needs modernising!
Break down your monthly outgoings.
When you apply for a mortgage, whether it’s a tracker option or a simple fixed-rate deal, you will be asked about your monthly spending in order to account for what needs to be earned before it is spent. Consider using a budgeting tool – there are plenty of free ones online, such as this one.
Priorities the search criteria for your coming home
Make a chart that details the things you require the most – and least – in a prospective home. The usual list includes the style of house (semi-detached, flat, maisonette, etc), the number of bedrooms or bathrooms, the location (centre of town, in the suburbs or close to a school, bus stop or supermarket), features such as a balcony or parking, and even how old the house it. Don’t be afraid to take this information with you to a property dealer; after all, you may find yourself presented with an even better option.
When you go to have a look around properties, it’s important to view several; you can guarantee that you’ll get a better deal if you have others to compare to, especially when you barter for the final price – after all, you’ll have a better idea of what’s considered “good value for money”. Also look at a home at different times of the day; this way, you can pick up on other aspects, such as difficult neighbours, loud traffic or over/under-lighting. Take plenty of notes and pictures, too – if you’re allowed, of course. It’s always worth refreshing your memory of locations regularly.