Tips For First Time Home Buyers From Homeowners
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The journey to being a homeowner can be very confusing as a first time buyer.
Too many things to consider, multiple layers of information and too many people involved.
We remember our experience when we first bought our home.
Despite Thando working in retail banking helping people get mortgages, it was still a learning curve.
Today, we’re sharing with you 5 tips for first time home buyers to succeed on your journey.
These tips are our top tips from our experience that will help your journey be much smoother.
Table of Contents
Tips For First Time Home Buyers
Before we get into the tips it’s important to ensure you’re ready to buy a house.
There are things you’ll need to have in place before you start the house buying process.
You want to ensure you have everything in place and ready for you to go.
For instance, there are many legal and official documents to produce.
Mortgage lenders can ask for documents as far back as two or three years.
As we said earlier, there are layers of information involved.
It’s not as simple as buying a car or a holiday.
Ok, let’s get into the 5 tips for first time home buyers so you can succeed in your house buying journey.
Know What You Can Afford
When we started to look for a house we looked with our eyes and our hearts.
We found some beautiful homes with everything we wanted in our dream home.
Only to be crushed when we realised our borrowing potential was nowhere near what was needed.
Borrowing potential is essentially how much you can afford to borrow as a mortgage.
Don’t waste your time or break your heart as we did.
No matter your desires to buy a 5-bed house in the city with a private pool.
If you can’t afford it, it’s a waste of time and sets youtube for disappointment.
The first thing you should do is find out how much you can potentially borrow as a mortgage.
What Is An Agreement In Principle (AIP)?
Banks allow you to get an indication of this through an Agreement In Principle.
Also referred to as a Decision In Principle or a Mortgage In Principle.
An AIP is really a quotation of how much a bank could lend you as a mortgage.
The outcome is based on a number of factors you fill in such as your income and your debts.
This makes it a pretty accurate indication.
You can complete an AIP yourself by going through each bank’s website (or branch).
Or, you can simply speak to an independent mortgage advisor who will check all banks on your behalf.
You’ll check multiple banks because each bank has different lending criteria.
There are three reasons why an AIP is the best thing to get:
- You’ll find out how much you can potentially borrow
- It does a soft search on your credit file, meaning it checks to see if your credit is decent enough to be considered for a mortgage.
- Estate agents will always ask if you’ve done this first before proceeding with your offer.
Just remember that an AIP is only an indication and not a guarantee.
The guaranteed answer will come the day you officially apply for your mortgage.
Make Your Must-Haves List
There are various types of houses of all shapes and sizes.
This tip is about looking with direction rather than scrolling through Zoopla aimlessly.
Think about the features and attributes you’d like with your house.
The number of bedrooms, style of building, size of the garden, location and much more.
Then, make a list of your must-haves.
This is the list you will use to sift through the houses that don’t match your desired criteria.
For us, our must-haves included spacious bedrooms, a wide kitchen and a low maintenance garden.
These are things we were not willing to compromise on when we did our house search.
No need to overthink it, you can amend it as you keep looking.
Research, Research, Research!
Do some research into the location you’re thinking of living in.
We took the time to walk around the area and get a sense of what we felt like.
We actually walked away from a few houses because the area just didn’t feel right.
Look into the housing market in general and the latest trends.
Also, look into how much your mortgage and bills could be in your home.
One of the good things about Zoopla is that it gives you an indication of running costs.
This gives you an idea of the impact being a homeowner will have on your budget.
Save As Much As You Can
This really goes without saying but you need to save a ton of money.
The usual costs of buying a house are the deposit, legal fees and mortgage advisor fees.
But there are other things to think of when it comes to money.
You may buy a house that doesn’t fit your style of furnishing and may need to redecorate.
You may buy a house that requires some work to refurbish some parts.
However, we understand that the deposit is the hardest mountain to climb.
You can look into using the Lifetime ISA to boost your deposit.
Or, you can leverage the Help-to-Buy schemes to buy your first property.
Be Very Focused And Very Patient
This is one of our key tips for first time home buyers.
We had to constantly refer back to our must-haves to ensure we didn’t get distracted.
The time it took to save up money was a long journey and we felt like giving up sometimes.
But we had to remind ourselves why we were on this journey.
There were moments when we looked at our savings balance and started getting ideas.
It’s only through focus and patience that we resisted the urge to spend the money elsewhere.
Buying a house is a marathon, not a sprint.
Marathons are not won by speed but by focus and patience.
Take Action
Take daily action towards buying your first home!
You’ll get there. We’re rooting for you.
Check out our Ultimate Money Plan to get in control of your money and smash your financial goals.
Share this post with others so they can also learn about money too.
Let us know how you’re getting along by getting in touch with us, we’d love to hear from you.
Knowledge is powerless without action.
So take action, and take care.
Thando & Lindie