Together Property’s First-time Home Buyers Guide

Posted on Friday, January 10th, 2020

It’s no secret that getting yourself onto the property ladder as a first-time buyer is an expensive commitment and can be incredibly daunting. However, that doesn’t mean that it’s unachievable.

With the right guidance, tips and tricks, you too can join the homeowners club! Come on in, it’s nicely decorated. 

First Things First, Deposits

Deposits are a good place to start as this step is debatably one of the most daunting aspects of buying your home. Let’s break it down to the basics.

You should start thinking about saving for your deposit before you start looking for properties. Your deposit determines the amount you’ll be repaying back to your mortgage lenders per month, so you want to make sure that you save up as much as you possibly can. Aim to save around 5% to 20% of the price of the property. Remember, the more you save, the less your monthly repayments will be.

Extra Costs that People Conveniently Leave Out

On top of saving money for your deposit, you should keep in mind the additional costs that come with saving up for your home. These include:

– Survey Costs 

– Solicitors Fees
– Removal Costs
– Buildings Insurance
– Initial Furnishing/Decorating costs
– Stamp Duty 

At a glance, this list can come across as quite intimidating and expensive. It’s important for you to know what you’ll be spending your money on later down the home-purchasing line!

Confused? Don’t worry, we’ve got you covered. Read this guide from the Money Advice Service on stamp duty to keep you clued up.

The House Search Begins

Now that you’ve saved for a deposit, you can start looking for your dream home! About time, am I right? As the search begins, the mortgage search also starts. Knowing about your potential mortgage is imperative to your house search, as it will tell you how much money you’re able to borrow.

You can get a mortgage from any number of banks, depending on your annual income. The amount you can borrow is dependant on this sum.
You can calculate how much you can borrow by using this mortgage calculator by Compare the Market.

Help to Buy – Yes Please

Worried about saving for a deposit? Or concerned about being able to afford your house? Well, let’s not get too worried yet. There’s plenty of government ran help-to-buy schemes available for people who are buying their first homes.

A help-to-buy ISA is your first option, which allows you to save for your deposit with an extra £3,000 added from your bank of choice. This is perfect for those who are worried about saving up for a deposit.

You could go down the Equity Loan Scheme road, which allows first-time buyers to purchase a ‘new build’ home that costs no more than £600,000. Through this scheme, you can borrow around 20% of the property price interest-free for the first five years, as long as you have at least 5% of your deposit saved.

You could even apply for a Shared Ownership Scheme, where you own 25% or 75% of your home with the landlord owning the rest, meaning you will then pay rent on the share you don’t own. You can buy more percentage later on, or even the rest of the ownership of the house. This is perfect for those who could struggle to afford a house on their current wage.

Say Yes to the Address

Now that you know the basics of home ownership for first-time-buyers, you can go forth and look into buying your dream home. From deposit advice to help-to-buy schemes, you can now buy a property easier than ever before.

Make sure that you do all your research before diving in head first, as it will make the entire house-hunting journey a lot easier to understand and deal with (especially if you’re a first-time-buyer). There’s plenty of options to choose from to help you get on the property ladder, all you need to figure out next is which is the best option for you!