5 tips for First Time Buyers
1. Find out how much can you borrow?
It is rarely as simple as saying a lender will lend First Time Buyers up to X times your earnings anymore as lenders have tightened up their underwriting in lieu of the credit crunch. Before underwriting your borrowing capacity the lender will want to know?
- Details of your Income
- Details of your expenditure
- How much of a deposit you can put down?
Each lender has different criteria and will estimate your borrowing capacity differently which makes the need to get advice even more prevalent as these calculations often include a credit search and too many can be damaging to your credit score.
2. Budget, Budget, Budget
In buying a property you will likely incur some fees along the way such as
- Stamp duty
- Land registry fees
- Arrangement fees
- Moving costs
On top of that once you have bought the property you could also be responsible for meeting the additional cost of all the following expenses (depending on your personal circumstances):
- Buildings & Contents Insurance
- Rates or Council Tax
- Any Life Assurance or Income Protection
- Repair costs
A good budget is essential in preparing yourself for what lays ahead.
3. Choose the right rate for you
Generally speaking (always dangerous to speak generally about personal financial circumstances but we’ll go for it) most First Time Buyers opt for a fixed rate as this means they know exactly what they a paying for the first 2, 3 or 5 years. This obviously depends on the market at the time but is a sensible approach especially in the current market with rates at historic lows.
4. Timing, how long will it take to get a first time buyer mortgage?
This will vary from week to week and from lender to lender. Those with the most competitive deals will often take the longest as there is more demand for the product. In today’s market it could take from 2-4 weeks at best and 8-10 would be a reasonable estimate for the worst case scenario.
The key is to approach the lender prepared, you need to have all the answers and documentation ready along with your deposit etc. and a good Mortgage Adviser can help you with this.
5. Get independent mortgage advice
Of course we would say this but here’s why:
- Buying your first home is stressful and as such it is worth speaking to a mortgage professional that will guide you through the process from start to finish.
- Deposits, rates, affordability and terms for First Time Buyers vary from lender to lender and this needs to be matched to your circumstances.
An Independent Mortgage Adviser will help you from start to finish including finding a suitable lender, working with Surveyors, your Solicitor and making sure you have any necessary insurance.
Images courtesy of Sunfox on Flickr[well type=””]
This page does not constitute advice and should not be taken as a recommendation to purchase or invest in any of the products/services mentioned
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE[/well]