First time buyers guide
We know that getting that first foot onto the property ladder isn’t always straightforward. We are here for you at every step of the way. We have put together a short home buying guide for first time buyers covering a few key points that you need to take into account.
If you would like some advice or to have a chat with one of our specialists then call or pop into your local branch.
1. Consider your needs
When you look for your first home you will no doubt have a list of things you really want from it. Finding a property that meets every single one of those requirements is extremely hard, and if not impossible, so you must also grade them as must-haves and would-likes. Be prepared to compromise on the would-likes! Consider all possibilities and research everything fully before committing. Don't forget non-property related things too, for example such as schools, travel distances to work, friends and relatives, bus routes, train stations, local amenities and medical centres for example. Read our area guides for a little assistance on some of these.
2. How much can you afford?
One of the biggest financial tasks you will ever face is saving for your mortgage deposit. Remember to budget for all the other associated costs of buying a home too such as solicitors, surveys, removals and possibly stamp duty.
Our expert mortgage advisers at Embrace Financial Services will be able to help you plan and budget. To get an idea in the meantime you can use our handy budget planner to see how much disposable income you may have for a mortgage or to save for a deposit.
If you’re one of the lucky few you will have parents who can to contribute. If not, you could pretend you already have a mortgage and start paying into a fund as practise (preferably one you can take the money out of again easily when it is needed). Not only will you know if you could keep up with the payments but you would be building your deposit fund.
In 2015 the Government introduced the Help-to-Buy deposit ISA to help people save for their first deposit. They will contribute a lump sum to start and a monthly saving bonus amount. Details can be found on their Help to Buy ISA Guidance notes.
If you can, get a savings account that restricts your access so you’re not tempted to go on a spending spree. It’s easy to dip into it when something else comes up, which it will.
No more extra luxury items
Work out how much you could save by cutting out the extras like gym memberships, extra nights out at pubs and restaurants, holidays abroad etc... You'll be surprised just how much you spend on things when you sit down to think about it. All of that extra can go into your savings pot.
Keep track of your spending
It's a good idea to try and keep a list of what you spend, when you spend it and what on. There are plenty of smartphone apps out there to help, or even a basic spreadsheet will do. This helps you to see where you can make savings and helps you focus on the goal. If it helps, allocate yourself a set amount of spending money each month, week or day and give it to yourself in cash every day. Any leftovers can go in a pot for the rest of the period.
If you have the time, can you take on a part-time or evening job? Anything you can do to hit your target, do it. It’s only for a short while and you'll be so glad you sacrificed some time. Be sure not to overdo it though.
Set realistic targets
Set yourself 'realistic' targets to stay focused on that dream. You will make it if you remain dedicated.
Most people cannot afford to buy their home outright from savings and will need a mortgage to fund the purchase. A mortgage is a loan secured on a property. You will be required to put down a deposit and you will need to apply for a mortgage to cover the rest of the purchase price.
You then need to repay the mortgage to the lender. Usually this is done in monthly instalments over the term of the mortgage.
Banks and building societies offer a range of mortgages with different loan amounts and interest rates. A mortgage specialist like Embrace Financial Services can search the market to find the most suitable deal for you.
There are a number of affordable options available when you’re looking for your first mortgage:
Some lenders will offer specific mortgages tailored to first time buyers. Often, they will only require a small deposit.
Help to Buy
Help to Buy is a Government scheme aimed at helping purchasers with limited deposits. You secure as little as a 5% deposit on a property. Find out more about help to buy