Five tips for first-time buyers

Although making your first step onto the property ladder can seem daunting, it’s an exciting time and the start of a new life. Whether you’re a young professional looking for an investment, or a couple searching for your perfect family home, purchasing your first property is a large financial commitment that requires a lot of careful research.

It’s easy to be overwhelmed by information and figures so before you sign that final contract, make sure you are fully prepared for the process. We’ve compiled a list of our most helpful tips to guide you through it:

Make sure you can afford the deposit

Before you start the property hunt, make sure you save for a deposit. As a general rule, you need to have between 5%-20% of the value of the house put aside. However, the bigger the deposit you raise beforehand, the cheaper your mortgage deal will be, so it may be worth holding out a few months if it means your mortgage repayments will be lower in the long-term.

Research mortgages               

There are many options when it comes to choosing a mortgage. It’s easy to be confused so make sure you do your research. For example, will you go for a fixed or a variable rate? A variable rate changes with interest rates, whereas a fixed rate mortgage is set at a certain rate and does not change.

Certain lenders such as Lloyds TSB offer specialist mortgage schemes for cash-strapped first-time buyers so it’s worth searching around. Many people employ financial advisors to help with the decision-making process but ultimately, make sure you do your own research to see what will work for you.

Check if you are eligible for government assistance schemes

Several government schemes encourage people onto the property ladder by providing financial help. In Wales, we have a ‘Homes within Reach’ programme designed for first-time buyers. The scheme is administered by a group of housing associations that provide house buyers with an equity loan to help them get on the housing ladder.

For people who would otherwise need social housing, the ‘Homebuy’ scheme provides an equity loan for 30-50% of the property price, so make sure you do your research to see if you are eligible.

Research the market

You may have a dream location and an ideal home in mind, but it’s important to research a range of options to ensure you get the best deal. Being open minded and willing to compromise will help you find the home that is right for you. Research properties in the area to see how prices compare and don’t forget to ask the right questions. Make sure you know what the neighbours and local area is like, whether there have been any historic problems with the building, and what exactly is included within the sale.

Budget for other costs

Buying a property is a financial commitment for life. It’s not only the mortgage repayments and the deposit you need to consider, but there are a whole host of other costs you need to consider before signing that final contract. Make sure you have budgeted for stamp duty as well as funding a solicitor to handle the legal work and a surveyor to survey the property, otherwise you might get a big surprise by hidden charges.

Here’s a great article revealing the hidden costs which often accompany buying a house.

Hopefully this guide helps with the concerns you have regarding buying a home. First-time buying is stressful, yet ultimately an exciting and rewarding decision – so what are you waiting for?