First Time Buyer Guide – Top Tips For 1st Time Home Buyers
22 September 2021

1) What Comes First – Mortgage or Property?

As a first time buyer taking the first step may appear to be the hardest, but with the help of a professional independent mortgage advisor the process of buying your very own home doesn’t have to be as daunting as it sounds.  Finding a good mortgage advisor will mean having professional guidance every step of the way.

The best advice for a first time home buyer is to start the mortgage process before searching for a property.  As the worst case scenario would be for you to find your dream home, only to have difficulty in getting a first time buyer mortgage.  By starting the mortgage process early you’ll be in an informed position, equipped with all the information required to search for your perfect home.

2) “Can I Get A First Time Buyer Mortgage? “

Using the services of an independent mortgage advisor (also known as a mortgage broker) will put you in an informed position right from the start.  Initial appointments can be over the phone, online or in person.  During the appointment the mortgage advisor will ask lots of questions with regards to your income, expenses, levels of debt, any missed payments, family circumstances.  As well as ascertaining what you are hoping to achieve, where you would like to live and what type of property you will be looking for.

Independent mortgage advisors have access to the whole of the mortgage market, including broker-only deals, and work on your behalf to find the right product for you.  They provide you with an accurate indication of the maximum mortgage amount available to you.  The mortgage advisor will then research the whole of market to find the best first time buyer mortgage products available for your circumstances.

They will also give advice on the various first time buyer schemes available, including the Government’s Help To Buy schemes, and property developers Shared Ownership schemes.  Having such information to hand will become invaluable as you start your exciting house hunting journey.

Top Tip

”What do I need to get a first time buyer mortgage?”

Lots of paperwork will be requested from the mortgage advisor and potential mortgage lenders, therefore it is worth digging out the following documents in advance – recent payslips and bank statements, credit card and loan statements.  As well as making sure your passport and driving licence are in date and have your current address displayed.

3) “How Much Do I Need For A First Time Buyer Deposit?” 

Many first time buyers regularly put money aside for a deposit.  This proves to mortgage lenders that you have the financial discipline to save, as well as having excess funds over and above your day-to-day expenses.

However, all is not lost if you do not have any savings, as many mortgage lenders will also accept “gifted deposits” from a close relative.  So if you find yourself in this situation, it’s always worth having the conversation with your parents!

Since the pandemic, mortgage lenders have been slowly reintroducing 5% deposit first time buyer mortgages.  This means that if you can afford a 95% mortgage, you will only need a 5% deposit to put towards the purchase.  Your mortgage advisor will spend time with you explaining the figures, different products types, mortgage terms, repayment types etc etc.

Top Tip

“Do Mortgage Brokers charge a fee?”

Independent mortgage brokers may charge a client fee for their services, this can be anything between £0 and £500.  There may be room for negotiation on the fee, so it’s always worth having that conversation at the start.  The mortgage broker will always tell you up-front how much you will pay for their services.

4) “Where Do I Want To Live?”

This is the fun part…looking online for your perfect first home.  Now that you have all the figures to hand, and knowing what is within your price range, you can start to really hone in on where you want to live and what type of property.

Local mortgage advisors can be a great source for information, especially if you are moving to a new area.  Decide what factors are important for the area where you want to move – whether it be school catchment areas, public transport, social scene etc.  Your local mortgage advisor can help answer all your questions.

Everyone’s idea of their perfect home will be different.  Whether it’s a house in the suburbs or a flat in the middle of town.  Different property types can have a direct effect on whether a property is mortgageable, and the mortgage products available.  For example, a flat above a kebab house will be far less desirable to a mortgage lender than a flat in a purpose built development.  This is where your mortgage advisor does the leg work to find the right mortgage product for your chosen property, saving you time and reducing delays in finding the right mortgage lender who will consider your chosen property.

5) Making An Offer On A Property

Now that the mortgage advisor has provided you with the maximum affordability, and you have found a new property, it’s time to make an offer!

This can be quite nerve-wracking therefore it is important to keep a cool head and stick to a pre-planned maximum figure you’re prepared to offer.  This will either be the maximum your mortgage advisor has told you, or what you believe the property is worth… whichever is lower.

Always talk to the estate agents and ask;

  • Why are they selling?
  • How long has the property been on the market?
  • Are the owners ready to move?
  • Have there been many viewings?
  • Have any offers already been made?

This is also the time to tell the estate agents about yourself.  You want to be the perfect candidate for the purchase, especially if there are a number of offers already on the table!

Top Tip

Be sure to inform the estate agents…

  • You have a mortgage advisor in place
  • Your mortgage advisor has carried out a detailed affordability check, and has arranged a Decision In Principle for you (also known as an Agreement in Principle)
  • You have the deposit ready (and that this can be verified by your mortgage advisor)
  • You are first time buyers and therefore looking for a quick move (ie not tied into a chain).
  • And just as importantly…be enthusiastic about the property!

6) Applying For A Residential Mortgage

Great news… you’re offer has been accepted by the vendors!  Now time to submit the full mortgage application.  It’s at this stage another meeting with your mortgage advisor will occur, to ensure all paperwork is up to date. And to re-visit the mortgage market to ensure they are recommending the best product available for your circumstances, and the chosen property type.  Your advisor will then submit the mortgage application on your behalf.

Top Tip

“When do I tell my landlord I’m moving out?”

Not yet!!! Although your offer has been accepted by the vendor, there is still some way to go before you legally own the property.  Therefore it is best to wait until you have a mortgage offer, and a completion date has been confirmed by your solicitor before notifying your landlord

7) Solicitors And Property Valuations

An integral part of the house buying process is the role of your conveyancer (property solicitor).

They will prepare all the legal documents required for the purchase.  As well as organise land searches and the transfer of funds.

Top Tip

It is worth getting recommendations and shopping around for a reputable and reliable company, as going for the cheapest is not always the best option.  Your mortgage advisor will always be able to recommend conveyancers.

There are 3 main types of valuations you can opt for, each increasing in cost;

Mortgage valuation – this is the most basic type of valuation that the mortgage lender will insist upon.  This is to ensure the subject property is mortgageable.  Lots of mortgage products include a free valuation so be sure to ask your mortgage advisor if you would like to research this option further.

Homebuyers Report– Includes a report that includes property defects and overall condition of the property, as well as advice on repairs and maintenance.  The Homebuyers Report will also include a market valuation and how much it would cost to rebuild the property.

Building Survey – An in-depth and detailed look at the property’s condition.

There will be a number of factors determining what type you would like to choose, including age of property, type of property, and not least your own peace of mind.  Once again your mortgage advisor can help you make an informed choice.

8) Arranging Home Insurance

The mortgage lender will require the new property to have home insurance in place.  Building insurance will cover the cost of repairing damage to the property, for example flood damage or subsidence.  It should also cover the cost of rebuilding the property.

Top Tip

There are lots of online comparison sites that you can use to find competitive quotes.  This can be set up in advance, and ready to start on the date contracts are exchanged.

9) Life insurance and Mortgage Protection

Another important consideration when taking out a mortgage is that you are covered for all eventualities.  This is particularly important if it is a joint mortgage, and/or you have a family. Part of an independent mortgage advisor’s role is to chat with you about what type of cover may be applicable to your circumstances, and provide you with tailored quotes for such cover. Giving you peace of mind that you are fully protected from the day you move in.

Top Tip

Life insurance isn’t the cheeriest of subjects, and one that some people tend to avoid. But it is always advisable to address your protection requirements whenever there are changes to your circumstances.  For example, buying a house, starting a family or starting a new job.

10) Moving Day

You’ve made it!!!  What seemed like a dream a few months ago is now reality, your very own home.  This day is the Completion Date, where all funds are transferred to the relevant parties, and you get a call from the estate agents to pop in and collect the keys to your new home!!!

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