Taking the first step on to the property ladder is one of the most significant moments of your life.
Entering a world of massive debt and confusing technical terms, potential homeowners can often be dissuaded by this daunting process.
Here are some things to consider when buying your first home.
Research
It might sound obvious but researching what is involved in the process of buying a house is crucial to preventing any costly blunders.
The internet has completely changed the way people can look for houses, with many now deciding to circumvent the traditional estate agent route for online advertising agencies.
Once you find a property you like, arrange a visit and study any information you can find about the house and the area itself. Your dream house will lose its appeal pretty quickly if it turns out it’s directly under a busy airport flight path.
Is it a new house? If so you want to check whether it has a Buildmark warranty. This is an official scheme which protects you against any defects due to poor workmanship or if the building company goes bankrupt.
It is also important to know whether the house is a freehold or leasehold property. If it is a leasehold then you may have to pay rent to a freeholder as the land on which the property is built is not included in the sale. Freehold properties do not have this problem as the land is incorporated into the purchase.
So if you manage to find a property you like – what’s next?
Making an offer
This is where things can get really confusing.
The majority of this will have to be conducted by a lawyer so make sure you have one you are happy with. Legal fees are often an overlooked expense when buying a house and can add up quickly so be careful.
Reading up on the basic process involved is also a good idea so you have at least some idea about what your hard-earned money is getting spent on. Lender valuation fess, survey fees and estate agency fees are all other silent charges that might not instantly spring to mind, but will chip away at your house fund nest egg.
Affording the property
But undoubtedly the largest expense house hunters face is their mortgage.
First time buyers face a bewildering array of options when it comes to mortgages and must tread carefully.
The housing market crash has forced banks to be more careful about who they lend to, with none now offering 100% mortgages. Advice is usually offered in branch and should be made use of to discover what type of finance plan suits you best.
Typically a 20% deposit will be required to secure a loan to purchase the property. Whilst mortgage affordability is now improving in some parts of the country, serious consideration must be taken before entering into a mortgage, with most lasting between 20-30 years.
What tips would you give to first-time buyers?
By Simon Grant