A guide for first time buyers

Buying your first home is one of the biggest purchases you will make and it’s most probably something you have been thinking about for some time.

There is a lot of advice for first time buyers and there is no one size fits all when it comes to your first mortgage. Everyone’s situation and circumstances are different so the first thing we would say is to get advice that if right for you!

At Kingsbridge Mortgage Advice, we have helped many first-time buyers purchase their first home and have collected the top 10 most common questions asked when they start out on this process.

Start by having a look at properties in areas you might like to live. A good place to begin is with online property searches. You can also have a chat to your local estate agents and ask them to let you know about properties which you might be interested in. Given you may be living in the property for a number of years you need to take into consideration your life in the future, so think about location, transport links, nurseries and schools, outside spaces and the amenities in the local area.

We would recommend using one as it will help make the process easier for you. Ask around for recommendations and find someone who you like and feel comfortable with. You can talk to a mortgage advisor like ourselves whatever stage you are at, even if purchasing a property is something you have only just considered.

We can help you identify how much of a deposit you might need, whether or not you would get a mortgage and explain the process, so you are better prepared. When you are ready to buy, we will help secure your mortgage and be there every step of the way through to completion.

The minimum deposit you would need can be as little as 5% of the purchase price but may be more depending on the type of property you are looking to buy.  If you can save more and have a bigger deposit, it would mean you may be to apply for mortgage deals with lower interest rates.

It’s useful to start by Identifying the area you might like to purchase in and check out the house prices. You will then get an idea of how much you would need to save and what you think you can afford.

A mortgage advisor will be able to help you work out if you can get a mortgage and how much a lender is willing to lend by looking at how much of a deposit you have, your employment status and income. This could be different if you are a two or one income household. They will also take your credit score into account (see below). This will all influence how much you can borrow. There are some government schemes available for first time byers and they will be able to talk you through those as well.

As part of their assessment of your application, lenders will look at your credit report and your credit rating to determine whether to approve your mortgage application.  There are lenders that will help clients who have lower credit scores, typically the interest rates charged will be higher than mainstream or high street lenders.

It’s good practice to regularly check your credit score, that way if there are any changes you can find out why and take steps to rectify it.

If you are concerned about your credit rating or credit history, please get in touch and we will be happy to discuss this with you.

There are other fees which you need to take into consideration and save for when purchasing a property.

If you are buying a property up to £425,000 then you won’t currently need to worry about Stamp Duty. These are the rules as of today and things are always changing so when you are thinking about buying, it’s good to check this with your mortgage advisor.

After you put in an offer, your mortgage lender will assess the value of the property to establish how much they are prepared to lend you. Not all lenders charge for this, it depends on the type of mortgage product you select.

When you are spending a lot of money on your first property, you may wish to consider arranging your own private survey, which can highlight any issues you need to be aware of. Depending on the results, this may affect the purchase price, how much your lender is prepared to lend you and affect your decision on whether to go ahead with the purchase.

You will need a solicitor to carry out all of the legal work. We recommend you shop around for the best quote and ask for recommendations.

If you would like a professional recommendation from us for a survey or a solicitor, please get in touch and we would be happy to help.

The majority of mortgage products will charge an arrangement fee.  However, there are also products which are fee free, and as always, your advisor will discuss this with you and advise on the best product for your specific needs.

If there is an arrangement fee charged, you have a choice to either pay this fee upfront or add it to the loan. If you add it to your loan, it will increase your overall lending, the interest payable and the monthly payment.

Some mortgage advisors charge for their services, normally paid on application. We don’t charge a fee because we are interested in building a long-term relationship with you. We believe if we do a good job, you will come back to us again and even recommend us to your friends and family.

Commonly you will be asked for the following:

• Proof of ID – both name and address
• Bank Statements
• Proof of income. Lenders will ask for payslips if you are employed or tax returns if you are self-employed.
• Proof of deposit. If you are being gifted a deposit, then you may have to fill in a form or request a statement from the person gifting you the lump sum.

Once you know how much you can afford, your mortgage advisor will have a look at products from different lenders to find one that is best for you.

Once you agree to one, they will go to the lender to get a mortgage agreement in principle – this means the lender has agreed to lend you a specified amount, based on details you’ve provided about your income, spending and debts. If you decide to apply for the mortgage, they will ask more detailed questions about your finances to see how much you can borrow.

The benefits of this are it gives you a head start when putting in your offer as this part of the process is already done.

From initial offer to moving in is presently taking around four months. There are a few moving parts which need to happen at the same time.

• Once you find a home you like and are sure you want to buy you put in the offer to your estate agent. The buyers may have a number of offers so don’t go too low, and you can always increase your offer.
• You then find and instruct your solicitor. They will handle all the legal work, will communicate with the seller’s solicitor, carry out the searches and check land registry and draw up the contracts.
• Once your offer is accepted you can ask your advisor to go back to the lender and get your mortgage arranged – your mortgage advisor will help you complete the mortgage application and talk you through the process.
• Then comes the survey to highlight any work that’s needed now and in the future. Once you are happy with those results you can exchange contracts. This is when you and the seller exchange signed agreements which legally bind you to the sale.
• You then pay the deposit through your solicitor and agree to a completion date.
• The final part of the process is Completion. Which is when you become the legal owner of the property. Your solicitor will transfer the remaining funds to the seller and that’s it! You get to pick up the keys and move in. This is normally a month after exchanging.

Many mortgage contracts will have a condition that you need buildings insurance. We also recommend that you get contents insurance, to protect all of your stuff once it’s in the house

We also strongly recommend that you consider Life Insurance, Critical Illness Cover and income protection policies – this will help protect you, your family and your finances and bring peace of mind if anything unforeseen happens

Kingsbridge Mortgage Advice have helped many first-time buyers get on the property ladder and we will be with you every step of the way. We like to keep things simple for home buyers. Which is why we take the time to get to know you, give advice tailored for you and your circumstances and are always on hand to answer any questions.

Before you start viewing and looking for your first home, we recommend talking to one of our team to find out how much you can borrow and how that fits into your budget requirements so you can view houses with confidence.

Get in touch to speak to one of our advisors.