So, you are about to get on the property ladder and it feels like there is a mountain of information in front of you. You will probably have more unanswered questions than answered!
In this guide we will give you more of an understanding by answering some basic questions that will help get you on the road to buying your very first home.
You may be asking yourself “what do I need to know before buying my first home?”. Our advice is not to feel overwhelmed. Firstly, it is not as complicated as you may be thinking. Secondly you will be assisted by a team of professionals including first time buyer mortgage brokers, solicitors and estate agents that will be on hand to help you buy your first home.
Like most things in life, the first time you do something can feel a little overwhelming however once you have gone through the process it seems a lot less daunting. Within this guide we will take a step-by-step walk through what you can expect and what you need to do to get you in to your first home.
How early should I start to get things in order ready for my mortgage?
It makes sense to literally get your house in order a few months before you are ready to buy your first home. 4-6 months before you start to look for a house would be perfect.
What do I need to get ready before I start looking for a property?
So the chances are that you will need a mortgage. The mortgage lender will be carrying out several types of checks and will need some documents from you when you apply. We have listed below what you will need to get ready.
- Make sure you are on the electoral roll. This is essential as banks and building societies will need to know where you have lived for the past 3 years and being on the electoral roll will give them the required proof. You will know if you are already on the electoral roll if you have recently had voting cards through your door. If in doubt, call your local authority to double check.
- Get your bank account in order. Most lenders will want to see up to 6 months bank statements up to the date of applying for a mortgage. It is therefore important that your bank accounts look healthy. Make sure you don’t go over your overdraft. Ideally try to get out of any overdraft you may already have. Make sure loans and credit cards are all paid on time.
- Stop any online gambling. This will show on your bank statements and will be seen by the lender when they ask for your last 6 months bank statements. This is of high importance as all banks and building societies will not give you a mortgage if you carry out any type of online gambling.
How do you find the best mortgage broker for you?
Buying your first home can feel daunting initially however get yourself a great mortgage broker or adviser to help and guide you through the process. Ask your friends that have moved recently if they used a mortgage advisor and would they recommend you use them. An alternative option is to Google ‘local no-fee mortgage broker.’ Next visit the websites suggested and it may be worth looking at Facebook pages too. Look at their Facebook and Google Business reviews, making sure they have 5 stars with customers saying lots of great things about them.
Will it cost me to get a mortgage broker to help me?
Although some mortgage brokers do charge a fee there are many that don’t. We would suggest you get a fee-free mortgage advisor as this will save you hundreds of pounds. As advised in the section above make sure you use Google to find a no-fee mortgage advisor. How are YesCanDo Money are no fee mortgage broker?
What can I expect from the mortgage broker initially?
A mortgage broker will search the whole mortgage market and well over 14,000 different mortgages to get you the best rates. Not only will they get you the best rates they will also be able to find any first-time buyer incentives being offered by the different banks and building societies. The types of incentives that can be offered include free valuation surveys and cash-backs. This could save you hundreds of pounds.
Before the mortgage broker even starts to advise you on suitable mortgages they will let you know what maximum mortgage you will be able to get from all the different lenders and how much per month you can expect to pay. The mortgage broker will explain the different types of mortgages including fixed rates, discounted rates and cash-back mortgages. To put your mind at rest most first-time buyers tend to choose a fixed rate mortgage as it gives them the certainty of knowing what their monthly payments will be.
Once you feel you are ready, the next step will be for the mortgage broker to apply to a lender on your behalf and obtain a decision in principle.
What is a mortgage decision in principle?
A mortgage decision in principle is an agreement from a bank or building society that they will lend you a pre-agreed mortgage amount, so you are able to buy your first home.
Now for the exciting bit, searching for your first home!
Buying your first home will be not only be one of the biggest purchases you will ever make, it is also one of life’s most exciting experiences.
Now that you have a decision in principle in place you know what value you can look up to. Get yourself set up on Rightmove, Zoopla and Prime Location. Start to look at properties within your price range in areas you would like to live in. Make sure you have notifications turned on. This will allow you to be notified when new properties come on to the market.
When you receive a notification that a property you like the look of has come fresh to the market make sure you act quickly. As well as you, hundreds of other potential buyers will get the notification at the same time therefore if you like the look of the property act fast. Contact the estate agent and arrange to view the property.
What to look out for when viewing the property
The average time a first-time buyer owns their first house is 4 years. Therefore, keep this in mind that it won’t be your forever home. It needs to be a property you will be happy in for around 4 years and that will allow you to grow as a person.
Ask lots of questions about the property
When viewing the property make sure you ask plenty of questions. One of the first questions to ask is where the current owners of the property are moving to. This can be important to determine if they will need a quick sale because they have found a property or a slower sale if they have yet to find a property. Ask plenty of questions about the property that you would like answered.
So, you have fallen in love with the property. What do you do next?
You have decided this is the property you want to be your first home. The next step is to make an offer to the estate agent who is selling the property. You will need to decide if you want to offer the full asking price or if you want to offer below. This is a difficult decision and will be based on how quickly properties are selling in your area. In a market where properties are selling within a couple of days of coming to the market you may well need to offer the asking price. In a slower market an offer may be considered. Speak to your mortgage broker and they will have knowledge of the local market and know if properties are selling at the asking price. When making the offer the estate agent will need to see a copy of your mortgage decision in principle, proving you are able to proceed.
Yay! Your offer is accepted
So, you have had an offer accepted on the property. Now the process steps up a gear or two and you will have a busy few days. Your mortgage broker will submit a mortgage application on your behalf and will need your up-to-date payslips, bank statements and your passport or driving licence.
You will need a survey
You will need a survey carried out to make sure that the property is structurally sound and to ensure that you are not paying too much for it. This is done by the mortgage broker as part of the mortgage application and they will advise you on what type of survey you may need.
You will need a solicitor
When purchasing a property, you will need a solicitor to carry out the conveyancing to enable you to buy the property. Use Google to search for a local solicitor and get quotes from three different companies so you can get a feel of not only how much they will charge but also how well they would look after you.
The solicitors look after all your legal work. Sometimes known as conveyancers, your solicitors will liaise with the mortgage broker, lender and estate agent to bring all the legal work together. They will communicate with the solicitors that are working for the owners of the property you are buying and will highlight any concerns they have as to why they think you shouldn’t buy the property. Your solicitor also applies for local authority searches, which are an application to the local authority to make sure they know of no reason why you shouldn’t buy the property.
Exchange of contracts
Once the solicitor receives the mortgage offer from the lender and they are happy with all the legal work, they will arrange for you to visit their offices to discuss completion dates and when you would like to move into your new home. The solicitors will get you to sign all the legal paperwork ready for the purchase. Once everyone in the property chain is happy with the legal work and agree on a completion date, the exchange of contracts can happen.
Completion day is the day from which you legally own the property and can move in. You will know this date from the day of exchange and this is usually 3-4 weeks after. Completion normally happens early afternoon, when you are called by the solicitor to confirm that you can pick up the keys from the estate agent and move into your very first home.
Summerising the things you need to know before buying your first home
Although a lot happens when you buy your first house, you will see that by having a great mortgage broker working alongside you they will take away a lot of the stress and uncertainty. They will be able to help you get your finances and credit file in a good position a few months before you start looking for a property.
The mortgage broker will be able to get you a mortgage decision in principle so you can go and find your first property. They will liaise with the estate agent, solicitor and the lender to make your first purchase far smoother.
At YesCando Money we are an independent, family-run, whole-of-market NO FEE mortgage broker. Situated in Hampshire close to Portsmouth, Fareham and Chichester we are close at hand for a face-to-face meeting at any time. If it’s more convenient please feel free to say hello via a phone call, email or message and lets see if we can help you on your journey to owning your very first home.