How to Buy a House UK First Time

Purchasing a home can be a challenging process, most especially if you are a first time buyer. This process can both be incredibly scary but at the same time exciting. Good news is that there are some guides to assist you in buying your first home.

Some steps that you need to learn about and understand are savings, types of mortgage, government schemes for first time buyers, stamp duty, hunting for a property, putting an offer, exchanging contracts, other costs, and more!

Prior to starting the home buying process, you must first weigh the pros and cons of owning a home. Can you handle the costs involved in maintaining one? If you have already decided that you can make it work, sort out your finances and decide how much you can give for deposit.

Steps in Purchasing a Home

  1. Ensure that you have saved some money to use as deposit. Determine how much you are putting towards the home you plan to purchase. For this, you need a minimum of 10% of the property’s cost, although there may be lenders who can provide deals for a deposit of 5%. It is advised though that the larger amount of deposit you have, the better rates of mortgage you may also be offered. And the mortgage payments you will pay per month will be lower as well. 

  2. Search for the best deals and rates for mortgage through different avenues such as through friends and family, online, building societies, banks, or better yet a trusted mortgage broker. The latter may be a good option to consider as they might have some access for competitive rates that are not published on open market. You should also learn about the different types of mortgage brokers as well as the kind of mortgages available. Also learn about improving your chances to get approved for one and know about the other factors that may also be taken into account such as bonuses, income, savings, spending, etc. Be prepared with a proof that you will be able to keep up with your payments.

  3. Check out the government’s schemes for first time buyers which include Help to Buy for those with a smaller deposit, Equity Loan which is available for homes that are newly built, Help to Buy ISA, shared ownership, and more. There are many schemes to help first time buyers and they differ among Northern Ireland, UK, Wales, and Scotland. Check the pros and cons for each before making a decision.

  4. Be prepared to pay for Stamp Duty if the property you purchase is in Wales, Northern Ireland, or the UK. You are not required to pay Stamp Duty though on the first £300,000 if your purchased property is worth a maximum of £500,000. If your home costs from £300,001 to £500,000 a 5% shall be applied.

  5. Other costs would definitely come up so be prepared for these as well. This may include valuation fee, cost of survey to see if the home is structurally sound, arrangement fee, redecoration cost, payment for the property solicitor, and fee for removal. If you plan to do this on your own, you would have to deal with the Land Registry, Stamp Duty, and the like.

  6. Then comes the exciting part of hunting for the right property that is within your budget. Once you have found some potential homes, you will then schedule viewings for each so you can decide which one suits you best. Have some questions ready when viewing a property such as why the property is being sold, what is included in the sale, and how long has it been on the market, etc.

  7. When you have found your home to purchase, then it is time to put an offer. This is done with the help of an estate agent and with this, an agreement in principle comes in handy. 

  8. Final step of the home buying process is the exchanging of contracts and the completion of the sale. In this stage, all the administrative and legal work that are involved with the property transfer will be taken care of by the solicitor and the final agreement on the terms of the sale will also be in this step. Here, the date of moving in will also be discussed and a deposit for the home will be made. 

When all paper and legal works are completed, keys to the property will be turned over to you either by the seller or the estate agent. 

More Tips When Buying a Home for the First Time

Though at least 10% is required for the deposit, having more like 25% will get you to have better offers. If you plan on purchasing a home, then saving up as soon as possible is the best thing you can do because it can take so many years to save up for a 20% deposit, and a much longer time if you will buy in London.

Be familiar with mortgage terms such as discount mortgage, fixed- rate mortgage, tracker mortgage, etc. so you can choose appropriately. Also, know the factors that can increase the chances of your mortgage to be approved like having a steady job, maintaining a good credit history, and the like.

Part of the documents that you may provide as proof that you can make your repayments are utility bills, and pay slips so be sure to keep them on hand. And when you are already in the process of finding a property, decide whether you want a leasehold or a freehold, a house or a flat, or if you want an already existing home or a new build. 

Appointing a conveyancer would be a good idea as they will take out all the hassle in dealing with paper works and all the legal stuff. They will also be the intermediary between the seller, you, and the lender plus other duties which will save you a lot of effort.