Buying a house is an exciting and massive life and financial decision to make. These top tips for first time buyers will ensure you’re prepared for the journey.
Despite me working for a bank and Lindie working in finance, our house buying process was still stressful enough.
We were snowed under in details, information, choices, and varying advice that we nearly lost our minds.
These top tips are the main things to keep to mind when you’re a first time buyer buying your first home.
9 Tips For First Time Buyers
These tips have been written to cater for all stages of the journey you’ll find yourself in as a first time buyer.
Whether buying a house is a dream for one day or you’ve recently made an offer for a house, these tips will ensure you’re not overwhelmed by it all.
The most important tip I’d give you upfront is to understand that buying a house is a journey.
The journey will excite you and absolutely frustrate you all at the same time, but trust me it’ll be worth it in the end.
Here are the top nine tips for first time buyers.
1- Save As Much As You Can
Buying a house has many costs associated with it.
Above the deposit for the mortgage there are other costs to consider such as moving costs and solicitor fees.
You may also desire to buy a slightly run down house at a cheaper market price then do some refurbishments once moved in.
Or you may buy a house that has a very different layout to your current house thus needs new furnishings to fit the new place.
Ultimately there are so many direct and indirect costs when you’re buying a house and cash is king in this instance.
Save as much money as you possibly can.
The more money you have available the more options you give yourself and the less likelihood of getting into further debts.
2- Find Out What You Can Afford To Buy
This is such an important step, don’t sleep on it!
There is nothing more heartbreaking than looking at a beautiful range of houses only to be told they are out of your affordability range.
When applying for a mortgage your affordability is assessed, which is largely based on your income and other debt repayments.
In the UK the amount you can borrow as a mortgage is capped at around 5 times your annual gross salary.
So if your salary is £50k, you can borrow up to £250k subject to multiple factors.
So it is wise to first find out how much you can borrow before looking at properties that are outside of your price range.
3- Property Research
Once you know what your financial position is, start looking at properties within your range.
Research into your desired location, house types and sizes, plus potential monthly mortgage payments.
I’d advise you also go property viewing even if you feel you aren’t yet ready.
When we started to physically step foot in the property ourselves and get a feel for our options it gave us the fuel to want to buy a house.
Also research into first time buyer schemes, financial support, or others deals available in the market for you.
You may realise that you can’t afford the kind of houses you’d like on your own so you may find the Help To Buy schemes are right for you.
4- Check Your Credit Score
Your credit score has a direct link to your mortgage application being approved.
The last thing you want is to save some money, find a property you can afford and be ready to buy only to be told you can’t get a mortgage.
Check your credit report and do what you need to build a good credit score.
The better your credit score the better mortgage offers you’ll be given. By ‘better’ offers I mean mortgages with lower interest rates.
If you have any missed payments, defaults or negative history over the last 12 months, this may affect your application.
When it comes to credit scores it’s important to note that mortgage lenders have different eligibility rules. One lender may decline you for a mortgage whilst another would make you an offer.
Having a good credit score gives you more options by increasing the chances of approval from a range of lenders.
5- Speak To A Mortgage Adviser
Speaking to a mortgage adviser does not mean you want to buy a house there and then.
You can actually speak to a mortgage adviser even in the early stages of your journey so they can steer you in the right direction.
They can also do some of the work for you, particularly with calculating your affordability and seeing if your credit score is okay.
Mortgage advisers come from various places, some charge for everything others offer free consultations and only charge if you proceed with them.
You can also speak to a mortgage adviser from your bank or find an independent mortgage adviser.
The difference is that your bank’s mortgage adviser will only tell you what your options are based on your bank’s mortgage rules and offers.
Whereas an independent adviser has access to the whole market. This means they can check your affordability and offers across a range of lenders.
Ultimately, as a first time buyer calculating your affordability and knowing what mortgages to choose from can be daunting.
A mortgage adviser takes on that pressure from you and does the work on your behalf. To be honest the value you get from them justifies the fees you pay.
6- Get Your Paperwork Ready
Buying a house is a legal transaction plus getting a mortgage is borrowing money from the bank to buy the house.
This essentially means there will be a lot of documents to go through, verify your identity and prove your financials.
You sign so many documents you’ll no longer want to sign anything else for a long time.
Common documentation that you’ll be asked to produce include your ID, proof of address such as utility bills, payslips, and bank statements.
All original formats or digital PDF’s for some and usually dated within the last 6-12 months.
You may easily be called by your solicitors asking you to email them a bank statement so they can complete a check for your mortgage application.
You’ll want to be able to respond promptly to not delay the house buying process. At the very least, know where your documents are and how to access them from online portals.
7- Consider Other Costs of Being A Homeowner
There are other ongoing costs with being a homeowner outside the house in itself.
If you take out a mortgage you’ll be expected (or encouraged) to set up life insurance and home insurance.
You may also be buying new furnishings and appliances with their own appliance insurance covers.
If you buy a new build there may be some upkeep costs that cover the upkeep of the estate, grounds work, or gardener for the communal garden.
Ultimately, this is about having an idea of the impact of homeownership on your budget and living expenses.
8- Be Very Patient
Patience is your best friend.
You’ll need to be patient as you save up money for your deposit and other costs of buying a house.
If your credit score needs some work to be improved to get accepted for a mortgage, give it time.
You’ll need to be patient whilst searching for a house that you like, in an area that you want, and that feels right. Especially if you’re buying with someone else, that’s 2 opinions.
You may have found a house and made an offer but this does not mean you move in tomorrow. There are other factors that can delay the journey from offer to moving in.
Plus, once you’ve moved into your house it may need some work, refurbishing, or general furnishing until it looks ‘done’.
I’m telling you, you’re in for a nice journey that will need some patience to make it through with a smile.
9- Are You Ready To Buy A House?
Above all, the biggest tip for first time buyers is to really figure if you’re ready to buy a house.
Being ready to buy a house includes the financials and the credit score, but it’s so much more.
Take the time to analyse your life goals and assess whether now is the right time to buy a house.
Don’t buy a house because your peers are, or you feel left out, or because you want to impress others.
Buy a house when you are ready to and if it suits your life plan.
Tips For First Time Buyers
Hopefully these tips have helped to reduce the confusion that first time buyers have when buying a house.
The only thing now is for you to take action and enjoy the journey.
I’m giving you these tips because I’d love for you to reach your life goals of owning a home so I’m rooting for you!
Take Action
Which tip resonates with your most on the first time buyers journey?
Save this and keep referring back to it.
Share this with your friend, family, or partner and encourage them if they’re on the journey to buying their first home 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