First Time Buyer
Whats the first step for a time buyer?
A first time buyer may have several questions related to securing a mortgage. The Sterling Capital Group mortgage advisers can answer all questions and provide guidance to help you understand every step of the process, from searching mortgage options to moving into your new home.
It would be sensible to get an agreement in principle before you start looking at properties. It will give you an idea of how much you can borrow, which can be conveyed to estate agents to show them that you are serious about buying a home.
Additionally, knowing how much you can borrow as a first-time buyer will allow you to set a price range when viewing properties. As a result, you will not waste time looking at properties you are unlikely to get approved for.
First time buyer help desk
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Top Tips for a first time buyer
A first time home buying experience is overwhelming. With all the things that you need to think about along with mortgage products, lenders, rates, fees. later on—it's a full time task that can get taxing even for the best of you.
First time buyer guide
Step by step guide to the buying process
- Book an appointment with a mortgage broker
- You need to know how much you can afford, you do this by contacting a mortgage broker, a broker will be able to tell you exactly how much you can afford based on your salary.
- Get an agreement in Principle
- your broker will provide you with this important document, estate agents will take you serious if they know you have an agreement in principle from a lender.
- Once you have found your dream home, make an offer.
- Inform your broker that your offer has been excepted
Your broker will now complete a full mortgage application and instruct your valuation.
When you have your first visit with your broker, make sure you bring the following documents to the meeting.
- Proof of deposit
- Proof of address
- Last 3 months bank statements
- Last 3 months payslips
- Last 2 years SA302’s and tax over views if self employed
Make sure you complete the following task.
- Instruct your solicitor
Your solicitor will require information for them to act on your behalf
- Client ID
- Proof of address
- A returned signed conveyancing pack
- Proof of deposit
Your broker can send certified copies of your proof of address, Proof of Deposit and ID, makes sure you prompt them.
Be realistic about how much you can afford to spend on a house, and ensure the intended mortgage is affordable. Don’t forget to allow for furnishings, and remember older properties may require extensive work, such as re-flooring, tiling or renewing the wiring. Make sure you budget for these likely expenses in addition to the purchase price, along with other fees such as conveyancing and stamp duty.
Take second opinions: It’s natural to miss out on key details and crucial elements when you haven’t had a home buying experience prior to this. Asking someone who has experience in home buying is a great idea, especially when you’re going to check the property out. If you can’t do this, try to take someone along for the second viewing.
It’s easy to dismiss the significance of budgeting for various expenses (utility bills, council tax, boiler servicing, repairs, etc.), so be prepared for this one.
There’s always the council tax: Determine what the council tax in the new area will be—the agent who sells to you will know this.
Internet connectivity: We’re assuming you use the internet frequently. Checking how broadband speeds do in the area should also be essential, especially if you’re self-employed or run a business from home. The agent will know this, so be sure to ask them.
Car insurance: Sometimes when you move to areas with a high crime rate, the rates for car insurance increases too. This also goes for when on-street parking substitutes off-street parking. Check for the insurance rates if you own a car.
Commute options: If you don’t have a private vehicle, always check for public transport options nearby. From buses to trains and nearby stations, this information is crucial. Even if you do have a personal means of commute, this is vital information as a resident of any area.
If you have kids, checking out the schools in the area is a good idea. This will also affect the price you get when you’re selling off because buyers with children will often pay a higher price if there are good schools in the area. Other locally-placed amenities such as a cinema or shops also matter. We also suggest you take a stroll in the area, on a bike or on foot, in the locality—just to be sure this is where you want to live.
The distance: Although many people don’t think about this, going to and from your house in a new locality is mostly commute time. It’s important to note how long it will take you to reach your workplace from here and if you can afford additional expenses of commuting to and from a far-away residence. Don’t just factor in the additional expenses, but also the time it will cost you.
Buying a home for the first time is a landmark decision in any person’s life. Because of this, most buyers tend to make a number of mistakes that end up prolonging the process and costing them too much.
Here’s what you need to avoid.
- Considering one lender only.
- Buying beyond your budget.
- Searching for homes before a mortgage application.
- Prioritising house over neighbourhood.
- Spending all your savings.
- Not being careful enough with credit.
- Overlooking hidden costs of homeownership
Saving up for a deposit is necessary before you start searching for a mortgage. If you are not sure how much you need to save for a home loan.
The greater your deposit, the less money you will have to borrow as a mortgage. More importantly, you will get access to attractive interest rates if you put down a big deposit. On the other hand, the number of mortgages open to you may be limited if you have a small deposit.
The encouraging news is that first-time buyers will now have access to a larger selection of mortgages that only require a 5% deposit. In April 2021, a government initiative to bring back 95 percent mortgages was set to go live, with major banks practically compelled to participate.
The program, which was unveiled in the March 2021 budget, enabling banks and building societies to purchase a guarantee on the riskiest part of a mortgage – the portion between 80 and 95 percent loan-to-value (LTV). If a house was to be repossessed due to a property crash, the government would pay for that portion of the lender's losses.
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