A Quick Guide to First-Time Home Buying

With a stamp-duty break in the UK for a short while, it seems like a good time to buy a home, especially as a first-timer. But buying a home can be a long, legal process. From thinking about the budget that you have, to house viewings, and actually signing on the dotted line and moving, it can take a lot of time and planning. But this is for anyone who is new to the process, and needs a little guidance along the way. If you are looking to get onto the property ladder, but are unsure where to start, here are some of the things that you should be thinking about when first-time home buying.

A Quick Guide to First-Time Home Buying

Saving for a deposit

If you want to buy a home of your own, then the first step is to save up. You might have already been doing this, but the more deposit that you are able to put down, the simpler it will be to get a mortgage. You can just do this with a regular savings account, putting money aside each month until you have reached your total. However, you could also think about using an ISA, such as a specific help-to-buy ISA, or perhaps a Lifetime ISA. The benefit of these is that they receive top-ups as bonuses, which can all add up and help your deposit get to the level that it needs to be at. The bigger that your deposit is, then the better rates for your mortgage that you will be able to get. 

Finding a mortgage

The next step, before going house hunting and finding a property website is to find a mortgage. You might even be wondering if you can even get a mortgage, but there are some websites that go through a checklist with you, that will show how eligible you are (it can be harder to get a mortgage if you are self-employed, for example). 

One of the things that you can be doing in the meantime is taking steps to improve your credit rating. This can help a lot! The mortgage process will be when a lender looks at your credit and it will show how much they think they could lend to you. If you’ve not been good at paying money back in the past, then it can hinder your ability to get a mortgage, or at least one at the kind of level that you would like. You could look for someone like a mortgage adviser, as they can help you to find what the best mortgages for you are, especially in terms of affordability and suitability for you. It can help your chances of being accepted first-time, and can help to save you some money, so it could be something to consider. 

Different kinds of mortgages

Unless you inherit a lot of money or win the lottery and can buy a home with cash, then you will need a mortgage. It can be a good idea to check out the different kinds of mortgages that are out there, and see which will be right for you. It can be worth checking with a lender about getting a mortgage in principle letter from them, showing that you are eligible, but sorting out the finer details down the line, when a home has been chosen. This can be good when it comes to the house hunting process. 

  • Guarantor mortgages: if you are someone who might struggle to get a traditional mortgage, then you may be offered a guarantor mortgage. However, this will only work if you have parents or other family or friends who would be in a position to help you out if you are unable to pay.
  • Shared ownership: if you won’t be able to get a large sum of money from a mortgage provider, so you can’t buy the whole home that you want, then a shared ownership mortgage could be an idea. This means that you buy a certain portion of the home and then pay rent on the rest of the home. 
  • Help-to-buy: this is a kind of mortgage that makes owning a home more affordable. Through this scheme, an equity loan will cover a percentage of the cost of the new home. 
  • Buying with friends: if you wanted to buy a home with a trusted group of friends, so that you live together but aren’t wasting money on rent, then finding out a little more about being tenants in common is the best route to go down.

Once you have all of this planned and thought out, you will know what kind of budget you are looking at, and can get onto the fun part; househunting! 

*This is a collaborative post

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