Making the decision to buy your first home is an exciting one. You’re ready to hit IKEA hard and you’re already packing boxes and building Pinterest boards full of ideas.
But before you get carried away, you’ll need to be sure you’ve got the right mortgage in place to suit you and your circumstances as a first-time buyer.
5 things all first-time buyers need to consider:
The bigger your deposit, the less you need to borrow, and the lower your LTV (loan-to-value) rate. This means access to more deals and better rates so save as much as you possibly can. Online mortgage calculators can help guide you on how much you could borrow. But the best way to be certain is to speak to a mortgage expert who’ll consider your individual circumstances and what you can afford.
An Agreement in Principle
Before you get too carried away on Rightmove, get your AIP in place. Your mortgage advisor will help you find a deal and then apply for this first-step that shows a lender is willing to lend you a certain amount. Doing this before you start viewing properties puts you in a great position as a buyer too.
If you’re buying a new-build or buying with others then make sure you explore government schemes such as the Help-to-Buy and Shared Ownership as you could get financial help and tailored mortgages.
Stamp Duty and other fees
As a first-time buyer you won’t pay stamp duty on a property up to £300,000 but anything over this and you need to factor in between 2% and 5% of the property’s value. And before you get carried away with cushions and cutlery you’ll need to factor in any mortgage arrangement or product fees, and valuation fees too. They’re commonplace with a lot of mortgages and expert advice will confirm how you can pay for them.
Mortgage and Home Insurance
As a first-time buyer your mortgage will likely become your biggest debt, so it’ll be worth considering insurances such as mortgage protection cover to help protect you. Mortgage lenders often make it a condition of the loan that you have full home insurance too, and you’ll need contents insurance to protect the things that make it a home.
Buying your first home doesn’t have to be overwhelming. Getting expert advice on your first-time buyer mortgage will make all the difference. Call our freephone mortgage advice line on 0333 005 0333. In just a 15-minute discovery call we can evaluate your financial circumstances and offer you helpful financial advice.
Your home may be repossessed if you do not keep up repayments on your mortgage.