Buying your first home may well be one of the biggest decisions you ever make, so it is normal to have a lot of questions about the process.
While it may seem incredibly complicated, it may not be quite as difficult as you originally thought.
There are, however, several different stages to the process, so you may find it helpful to be well informed on the subject before undertaking the process of buying your first home.
The deposit is a lump sum of money you will need to pay in order to secure your mortgage. The minimum you can put down as a deposit tends to be 5% of the property value but this will mean that there will be a higher interest rate, whereas a larger deposit will allow for a lower interest rate.
The average UK house price was £231,000 in January 2020, and with most first-time buyers laying down a deposit of around 15%, you could be looking to save in the region of £34,650.
Bear in mind these figures are nationwide averages, and house prices can vary hugely depending on location. The amount of money you'll need to save for a deposit will depend on where you're looking to move to and the value of the house you wish to buy, among other things.
Saving up the money for a deposit may take you months and even years, but if you set yourself a strict budget by cutting down on your expenditures, you may find that you are able to raise the funds for your deposit with greater ease.
This may seem like a huge undertaking as a mortgage typically takes on average 25 years to pay off but there are ways you can improve your chances of being granted a mortgage.
Speaking to a mortgage adviser may be a wise choice as they can help you to find a mortgage that will be affordable and best suited to your situation. Some mortgage advisers will charge a fee for their services whereas others will be free to you but they will receive commission from the chosen mortgage lender, so it's best to check up front. There are many different types of mortgages with different benefits and drawbacks, so this can take quite some consideration.
You may look at countless homes before you find the perfect property, or you may find that you fall in love with the first property you view. However, there are some things you should consider and look for when viewing a property. While it may seem a little negative, it could help in the long run to look for possible problems - are there signs of damp? Is the property in an area that is at risk of flooding? Considering these factors before purchasing a property could help you rectify issues before they arise.
Once you have found the perfect property, you can begin to move forward with the buying process. At this stage, you may be ready to put in an offer on the property. This will involve contacting the estate agent and stating the price that you are willing to pay for the property.
If you offer a price lower than the asking price, you may find that the sellers reject your offer, but haggling is a part of many house sales, and it may help you to save money.
If the offer is accepted, congratulations! But there's still plenty to be done. The solicitor or conveyancer should be able to guide you through much of this part of the process as they prepare the necessary documents that will need to be signed.
Once your offer has been accepted, you will need to complete your formal mortgage application to secure the property. At this stage, the lender will instruct a surveyor of their choice to conduct a valuation to check the property is suitable security for the proposed mortgage loan.
Providing this all runs smoothly, you can exchange contracts with the sellers. You can then set a date to move in, and once money has exchanged hands, you can call yourself a new homeowner.
There are many costs associated with buying a home, some you may not yet be aware of. Below are just some of the costs that you may need to consider when you are thinking of taking your first step on the property ladder.
Of course, there are also often other costs associated with decorating and furnishing your new home.
At this point you may start thinking about mortgage protection insurance and whether you need to take out a life insurance policy when you buy a house. At Compare Cover, you can compare life insurance quotes and find clear and up-to-date information about life insurance policies.
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Are you planning to move into a new home? If so, you may be wondering, what is mortgage protection insurance? Find out more in our guide.
Have you bought life insurance through a bank? Discover why you may want to compare life insurance quotes to see if you can get a better deal.