Buying your first home is exciting – but first-time buyer mistakes are bound to happen when you’ve never done it before.
Of course, an estate agent, your solicitor and mortgage adviser can help answer questions when you’re buying a property. But it’s easy to forget to ask questions as there is so much to remember.
If you’ve never bought property before, don’t worry, you’re not alone. Figures show that in 2021, the number of first-time buyers doubled.
There were 98% more first-time buyers in 2021 as there were in 2020. Another report shows that sales to first-time buyers are at a 19-year high.
So if you’re one of those people wondering about how to make your first property purchase a smooth process, here are a few tips…
4 first-time buyer mistakes to avoid
Don’t end up homeless
This may sound dramatic, but it’s more likely to be an inconvenience. And it can be avoided! If you’re renting, you maybe thinking about when to give notice. Whatever you do, don’t do so until you are 100% sure of your exchange date.
These dates can and do change. Giving notice too early could mean you end up with nowhere to go if your landlord has already let your current home.
While paying rent at the same time as your first mortgage payment sounds worrying, it could be easier than staying with parents. Apart from the inconvenience, you’ll have to pay for removals twice or you may need to rent storage for your furniture, which could be just as expensive.
Always factor in the chance of delays! In property buying, they’re pretty common.
If your first property isn’t a new-build then you may well end up as part of a chain. This means the people you’re buying from maybe buying and the people they are buying from could be buying, too. As a result, you’re bottom of the chain! This could mean you have to be patient while all those people ahead of you get legal matters organised. It will be worth it in the end, just don’t expect to be moving within a month of having your offer accepted.
Looking for a house before a mortgage
Buying a new property is exciting, but get things in order before you get too excited. You need to speak to a mortgage adviser first to make sure you know how much you can afford.
There’s more to a mortgage than just what you think you can afford! Getting excited about houses in a price range above what a mortgage lender will give you may leave you disappointed.
Mortgages are available from brokers, such as The Mortgage Dog, banks, building societies and other lenders. Here’s why we think you should use a mortgage broker.
Not considering all the costs
Getting everything into place before your first mortgage payment is just a small part of the story! You won’t just have to pay fees to solicitors, there will also be searches to pay for. Searches are part of the solicitor’s job but not always included in the quote for fees, they maybe quoted separately.
Searches check that your property isn’t in the centre of a planned motorway or has historical issues.
Many first-time buyers don’t budget for these legal costs, so make sure you do or you could end up struggling as you start out. Other costs that you may overlook include:
- Buildings insurance. You need to pay to insure the building as a legal part of the agreement with your mortgage lender. Make sure you budget.
- Council tax. Everyone who owns or rents a property pays council tax. If you’ve been renting, you’ll be used to it. But remember if you’re moving to another area or the house is in a higher band to your rental property, you need to budget for that.
- Valuation fee. Your mortgage lender needs to assess the value of the property so they can assess what they will offer you. The valuation can cost between £150-£1,500 depending on the property’s value.
- Surveyors fees. A surveyor needs to check to ensure the property is safe and to report any issues. For a basic home condition survey, expect to pay around £250.
Racking up credit or applying for credit
Having a good credit record is essential to ensure you secure a mortgage offer. So don’t decide to buy or lease a car or max out your credit card on a holiday a few weeks or months before applying for a mortgage.
Lenders look at your buying decisions, and if you’re not careful with credit, you maybe told you can’t have a mortgage.
Here’s all you need to know about why your credit history matters.
If you’re a first-time buyer looking for advice, please don’t hesitate to get in touch with our team.
Here’s a very important thing first-time buyers should remember: Your home may be repossessed if you do not keep up repayments on your mortgage
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