Feb 22, 2021
7 min read
Buying a house is a lot to wrap your head around – especially as a first-time buyer. But if you know what to expect, it doesn’t have to be daunting or stressful. While the market is in a constant state of flux, the preparation tips remain the same. And in property, knowledge is power. With our guide on buying a home for the first time, you can feel more confident about the process.
Before you start searching for homes for sale, you need to save for a deposit – and all the other expenses that occur during the home-buying transaction. For example, if you want to buy a home costing £200,000, you’ll need to save at least £10,000 (5% of the purchase price). Apart from the house deposit and monthly mortgage payments, factor in the following costs when buying a home:
It’s also worth considering products that will help you save quicker. For example, if you add savings into a Lifetime ISA, the government will add a 25% bonus to your savings.
Another common query among new homeowners is about first-time buyer stamp duty. The price you pay, if any, depends on the value of your property. If you’re purchasing your first home in England or Northern Ireland, you’ll pay no stamp duty on the first £300,000 (or £500,000 if it’s a shared ownership property). For properties between £300,000 and £500,000, the stamp duty is only applicable to anything over £300,000. First-time buyers will pay a standard rate of tax on properties over £500,000. stamp duty often catches buyers off guard – so be prepared for the price you may pay.
When you apply for a mortgage, lenders will look at a range of information, from your income to your debt, including your credit score. These details will determine whether or not you are offered a mortgage, so it’s well worth ensuring you’re presented in the best light.
Look for ways to reduce your debt (make repayments on time, shut down accounts you no longer use), and review your credit report to remove any errors. An instant way to boost your credit score is to make sure you’re on the electoral register – you can sign up online.
You may qualify for the government’s Help to Buy scheme, which aims to help first-time home buyers get on the property ladder.
In most cases, home buyers will need between 5% and 20% of the property price to move forward. The average first-time buyer deposit for a house is around 15%. While it’s tempting to hold back some money and opt for a lower deposit, generally, the larger the deposit, the lower your mortgage interest rate and the lower your monthly repayments. With that said, a smaller deposit could mean hopping on the property market sooner – so be sure to assess your financial landscape and work out what is best for you.
Unless you have access to serious cash or a sitting-pretty trust fund, you will likely need a mortgage to buy a house. It’s a good idea to research and find a mortgage before you start house hunting, so your search is realistic.
There are many different types of mortgages on the market. Whether you’re opting for a home buying scheme or already have a mortgage advisor scouring options, be sure to read through the terms carefully. You should be able to get a mortgage in principle, which shows Estate Agents and sellers that your finances are prepped and that you’re a serious buyer.
Make sure you’re in the strongest position possible as a new buyer. Be reactive when property hunting and during house viewings. With Boomin, you can learn about properties days before they appear anywhere else online and then book a viewing instantly, 24/7 – no more playing phone tag with Estate Agents.
Fallen in love with a property that ticks your boxes and suits your budget? When you’re ready to make an offer on a house and seal the deal, let your Estate Agent know (and put your offer in writing so details don’t get misunderstood over the phone). If your offer is accepted, congratulations. Get the bottle of bubbly out – you’re one step closer to becoming a homeowner.
Now you’ve found your new home, made an offer, negotiated and then got it accepted, you are now ready to instruct a solicitor. The Estate Agent should be able to suggest a local, reputable solicitor if you don’t already have one in mind.
Houses may not stay on a hot market for long, but transactions can take longer to complete than their expected time frames. It’s likely to be one of the largest financial commitments you’ll ever make, so it’s important not to rush it.
Once you have exchanged contracts, you’ll set a date for the sale to go through. Now is the time to inform your landlord (if you’re currently renting), redirect your mail and switch your utilities and broadband over. Also, inform your GP and dentist of your address change, arrange insurance and plan where your furniture will go in your new place. Looking for design inspiration? Our Property Playground is sure to get your creative juices flowing.
With this first-time buyer guide, you can feel more confident about the home buying process. Buying a home is no small feat, but at Boomin, we’re here to help. We have extensive guides that make home buying make sense. We work with a wide range of Estate Agents that help you navigate your first – and, likely, largest – purchase that will leave you feeling content in your new abode.
Our property site is a smarter place to browse houses and book viewings online, 24/7 so you can get excited about some dates in the diary. Boomin gives you a wider buying experience. Search our vast range of properties for sale today.