Things are finally looking up for first time buyers. According to the Council of Mortgage Lenders, the number of first time buyers has hit its highest level since 2007. However, figures from another recent survey suggest this group is still a little green when it comes to the ins and outs of property buying. A poll conducted by MyVoucherCodes.co.uk shows that 62 per cent of first time buyers didn’t shop around for their mortgage deal, opting instead to lend from their existing bank. If you’re considering taking your first step onto the property ladder and are unsure of the ins and outs of purchasing a home, take a look at our top 5 things to be aware of:
There are some better rates and deals floating around for first time buyers now, including 95 per cent mortgages, but you need to think beyond a deposit when it comes to your savings pot. In addition to paying the removal man, solicitors and surveying fees, you may also find you need to pay stamp duty on your new home. At the moment, stamp duty is paid on properties in the UK that cost £125,000 or over, with the rate dependent on the price of the property. This means you’ll need a good few thousand pounds more than your deposit saved up.
In addition to your mortgage advisor, you’ll need to deal with a few people during the home buying process. Firstly there’s the estate agents and then the solicitors who help you process your sale. If you’re moving from one district into a whole new area, for example from London to the north, you may find it helpful to choose a local solicitor. Local solicitors may be more aware of local issues, such as new developments, so if you’re heading to the North East, consider switching to Newcastle Solicitors and if you’re going the other way, make enquiries about solicitors in your area. Word of mouth recommendations are often a good way to sort the wheat from the chaff.
The MyVoucherCodes research highlights a real knowledge gap when it comes to mortgages. It can be easy to get swept up and just pleased about being accepted for a mortgage without checking whether it’s the best deal for you or what it means for you in years to come. Mortgages can be a bit of a minefield, so make sure you know the difference between tracker, fixed and variable before you step on the ladder. This simple guide from the MoneyAdviceService is a good place to start.
Once you’ve found the house of your dreams, remember to check whether it’s leasehold or freehold. Many flats and even homes are sold freehold, which means you don’t own the land the property is built on. Depending on the length of the lease this may mean you have difficulty selling the property on in the future and it could mean you are liable for service charges.
Finally, don’t forget that once you own your home you’ll need furniture and other items to fill it. You may be lucky enough to have a few bits and pieces already. If not, try eBay, Gumtree and freecycle for bargains rather than overextending yourself on credit.