Not sure where to start when buying your first home?
At Mortgagemove our advisors have all been there, we have all been first-time buyers.
We have all faced buying our first home, the excitement but also the slightly anxious feeling of going into the unknown. It’s probably the biggest purchase any of us face in our lives and it’s completely natural to feel a bit overwhelmed and not really know where to start.
Mortgagemove have put together a list of questions that we often get asked by first-time buyers. We hope it helps, but feel free to contact us to talk anything through. We’re here to help, to answer questions and to hold your hand through the process, right up until you get your keys to your first home.
How much deposit do I need?
This is the big question. The simple answer is as a minimum you need 5% of the purchase price. You will have more options and you will have more options, and may get a better mortgage rate, if you have 10%. Increasingly, we see parents willing to release equity from their homes to help their children fund a deposit.
How much can I borrow?
The amount you can borrow will depend on more than just your salary. Lenders will consider the expenses you are committed to. Things like personal contract purchase agreements for a car, loans and credit card debts will be factored into what a lender will offer. It isn’t as simple as multiplying your income by a number. Different lenders will offer different amounts. This is how a broker can help you. For example, we work with over 70 lenders, and they will each calculate what they may lend you differently. So, we would search all the lenders on our panel to see who will lend you the amount you are looking for. Quite often, with a first-time buyer, it can be the amount of deposit they have available rather than the amount they can potentially borrow, that will determine what they can afford.
How much is stamp duty land tax and will I have to pay it?
Stamp duty land tax (SDLT) is a tax you pay on the purchase of land or property over a certain price in England and Northern Ireland. At the time of writing, if you are a first-time buyer, you will not have to pay SDLT if the value of the property you buy is below £425,000.
What other costs do I need to budget for?
Some mortgage products will have a fee although it is usually possible to add it to the mortgage. Most lenders will offer a free basic valuation but particularly on older properties purchasers may want a more in-depth survey. Depending on the type of survey required and the value of the property you may need to allow between £500 – £1500. In addition to the survey, there will also be conveyancing costs. On a straightforward purchase you need to allow around £1500 for conveyancing. Then there is the cost of moving your things into your new home. You may also to allow for the cost of using a removal company or hire a van to move your possessions. It’s worth shopping around for quotes.
What do I need to do to get myself ready to apply for a mortgage?
Obviously, everybody’s circumstances are different. Speak to a Mortgage Advisor, we don’t charge a fee for the advice we give to get our clients mortgage ready. Know exactly what you earn, including overtime and bonuses. Know what you owe, what the monthly payments are and the outstanding balances. Make sure that you are on the electoral roll and that everything is registered to the same address. Don’t apply for additional credit prior to applying for a mortgage if you can avoid it. Get a copy of your credit report and make sure it all looks in order. Make sure you pay your credit commitments on time and try not to max out on your available credit.
So, we hope that helps a bit. There is no such thing as a stupid question. If you are thinking of buying your first home and want to talk it through with someone who understands what you’re going through……we’re here to help you!
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP WITH YOUR MORTGAGE PAYMENTS.
Approved by the Openwork Partnership on 07/02/2023
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