Have you been saving up for your very first home? Spotted the dream house you want to purchase? This is one of the most exciting times in your life, but it can feel a bit daunting understanding all of the processes, timescales and language of the property world!
We have our very own First Time Buyer Guide to take the stress out of getting that first foot on the housing ladder.
You can download it for free here and check out our top tips below for first time buyers in 2021.
1. Now is the time!
With interests rate so low, there are some fantastic deals out there at the moment. If you’ve been working hard to save every penny and think you have a little way to go, ring us for a chat. We can talk you through all the available options – you might be able to secure a mortgage sooner than you think with the money you already have in the bank.
2. Get your credit score report
If you’ve never borrowed money before you’ll find it extremely hard to get a mortgage. Parents often think they’re doing the right thing by telling their children never to borrow money, but in fact it’s as bad as missing payments on your credit. You can get your credit report from a number of companies including Experian, Equifax, Credit Karma and TransUnion UK – do this sooner rather than later so you have time to improve your rating if you need to.4. Plan for hidden fees
3. Plan for hidden fees
Many people think they just need to save up for the deposit but the additional fees incurred when buying a house can add up to at least £5000. Here are the main costs you’ll need to consider:
- Application/booking fee: up to £250
- Valuation/survey fee: from £200
- Ledger’s arrangement fee: up to £2000 (ask about adding this on to your lending term)
- Legal costs: up to £2000
- Stamp duty: between 0 and 12% or your purchase price, depending on which bracket it falls into.
On top of all these costs, it’s recommendable to have at least 3-6 months’ salary in savings as a rainy-day fund.
4. Get your paperwork in order
If you’ve got the funds and found the dream home, the first thing we’ll ask is for your documentation to get the ball rolling. The whole process will go quicker if you get organised from the beginning – this is what you’ll need:
- Identification eg. passport or driving license
- Address verification dated in the last 3 months eg. Utility bill or bank statement
- Employment documentation:
- Latest 3 months personal bank statements showing salary credits PLUS:
- If you’re employed: last 3 months payslips and most recent P60
- If you’re self employed/shareholder of a LTD company: last 3 years SA302s, tax overviews and signed accounts
- If you’re retired: latest pension statements
5. Ask for help
The amount of money you need to get on the housing ladder has risen hugely within a generation and we now see parents gifting deposits to their children on a regular basis. If you think you’ll never be able to afford your own house, open up that conversation – you may have a relative who would be happy to help but has no idea you’re struggling.
