FIRST-TIME BUYERS’ GUIDE
As a family-run property developer, there’s nothing we like more than helping clients move into a house that exceeds their expectations. And finding that first home to call your own is a particularly special time.
Are you ready to buy your first home?
It’s an important step in your life. Once you’ve decided you’re ready to climb onto the property ladder it’s likely you’ll want to dive straight into house hunting. However, there are some important things you need to do before you begin.
Make the process easier by following our first-time buyers’ guide to be in the best possible position when you see the place of your dreams:
1. Work out your finances
You’ll be in a much stronger position to put in offers if you’ve done your sums first. Understand what costs are involved in buying and moving so that you can compile a budget. Firstly, you’ll need a deposit of at least 5% in order to secure your first mortgage, and in most cases the more deposit you have the better the borrowing rate you’ll be offered. So save, save and save some more.
When securing a mortgage offer, banks take into consideration your deposit, salary, credit rating and debts, so ensure your finances are in order and do all you can to keep a healthy credit rating.
Buying also involves other associated costs such as mortgage arrangement fees, solicitor’s fees, surveys and removal expenses.
2. Get to grips with stamp duty
From November 2017, first-time buyers have been exempt from stamp duty tax on properties worth up to £300,000. For homes valued between £300,000 and £500,000, a 5% rate applies but only on the amount over and above the initial threshold. However, this is only available to those who have never owned a house before. If you’ve previously owned or inherited a property either inside or outside the UK, you will not qualify for the exemption.
This tax relief is also open to first-time buyers going through approved shared ownership schemes who elect to pay stamp duty in stages, and those who pay the market value. Visit the government website to see if you’re eligible.
3. Find out what help is available
The government has launched a number of initiatives designed to get people into their own houses, so it’s worth checking to see if you qualify. Visit our page on the Help to Buy scheme for more information on an interest free loan from the government to boost your deposit on a new home, or the opportunity to buy a share of a house and pay rent on the remaining value to a housing association.
4. Secure your mortgage before you find the house
This may sound a little back to front, however, securing a mortgage agreement in principle before you find a house could give you the edge when it comes to negotiating an offer. You’ll also be clear about how much you can borrow.
There are various different types of mortgages to choose from, including fixed, variable and tracker rates. Get to grips with the pros and cons of each one to work out which is right for you. Use online guides such as Money Saving Expert for the latest deals.
Rather than going it alone, many people now use mortgage brokers to get a complete picture of the products on the market. When choosing a broker look at their reputation, service fees and number of mortgages they offer to ensure they’re independent.
5. Do the research
Once you’re ready to start viewing properties it’s easy to get carried away and fall in love with the first one. Before you start, compile a wish list of desired features and suitable locations, and see as much in your price range as possible. All properties are not created equal! Review the pros and cons of each house as objectively as possible.
If the place needs work, get potential quotes to build up a picture of future costs. For properties on new estates, talk to neighbours to see what the build quality is like. The more research you undertake at this stage, the better informed you’ll be when it comes to taking the plunge. And never agree to anything that you can’t comfortably afford on a monthly basis. Remember that if you sign up to a variable rate mortgage, your monthly repayments will depend on the prevailing interest rate.
Wherever you are in the first-time buying process we wish you lots of luck with your purchase and hope the keys to the door are in your hand soon.
Why choose a house built by Charworth Homes?
Every property we build is lovingly crafted with our company ethos of quality and professionalism in mind. We don’t believe one size fits all, instead each house is as unique as its owner. Charworth Homes builds houses that delight from the first moment you step inside.
The good news is our homes can be purchased under the government’s Help to Buy scheme via an equity loan of up to 20% of the market value. For more information on how the scheme works read our Help to Buy guide.
If you’re interested in purchasing a Charworth Home of your own, call us today on 01652 659072