Having been a mortgage adviser for a number of years, I have helped a vast amount of people through their first time buyer experience.
I have helped many people buy their first homes, to then see them move on to their forever home, and even go on to release money from their property to complete home improvements they never thought possible.
There isn't a scenario I haven't seen. In my time, I have truly seen the ups and downs of property ownership.
As a result of my experience working in Mortgages, in this insight, I have put together 5 considerations that every First Time Buyer should be aware of before they start their mortgage journey!
The first and best thing you can do is employ the services of someone who searches for mortgages every day.
Asking for help and opinions from friends and family is great, but the best thing to do is have a full sit down with a professional adviser.
A Mortgage adviser will take the time needed to go over income, expenses, and past credit history concerns that you may not want to share with your family (especially mum and dad!). The conversation you have with an adviser is completely confidential.
Speaking with a Mortgage adviser may even result in you finding a solution for your mortgage needs that you may not have arrived at if you had decided to proceed online.
Mortgage advisers do so much more than choosing you a loan. The house purchasing process can be a daunting one and a good mortgage adviser is worth their weight in gold. Advisers can help you to appoint conveyancers, advise you on the general process of purchasing, as well as keep you informed about any possible delays you could experience in your chain.
It is said that purchasing a property is one of the most stressful life events we go through. Seeking professional Mortgage advice can help you relieve a lot of that stress.
Think about your budget - what can you genuinely afford without breaking the bank? How much will council tax, utilities and travel to work cost you each month based on where you want to live? How much do you need left over in order to be able to do all the fun things you want to do?
In recent months, we have seen how Interest rates can change, if you do not budget realistically, you could leave yourself without room to budge later on down the line. You may find yourself wanting to move again to save money. That can be difficult when you have begun to settle into your dream home.
If you get carried away with your budget you may find yourself looking at properties you cannot afford. We are all allowed to dream a little but be sure to avoid any major disappointment by arranging an agreement in principle with your adviser.
The agreement in principle will tell you how much you can afford to pay for a property and keep your property searches in the right price range.
Do you want a property that needs a bit of work or would you rather just move into something already done?
With the excitement of property hunting and viewings, it's easy to overlook details, such as repairs that may be needed. Do not hesitate to arrange a second viewing if you feel it is required and you did get caught up in the excitement of the situation.
Be sure to know what you can afford when it comes to refurbishments. Having this consideration in mind will definitely help you narrow down the search for your perfect property.
Do go and see as many properties as you can! The more you see, the more you'll know what you like and dislike. Try not to get your heart set on the first property you find, there will always be another one - probably just around the corner!
Are you buying with a partner, friend, or on your own? A partner or friend can boost your income used for affordability assessments, but you might not want to live with them forever!
If you're the one with the deposit, you should think about how you are going to protect your own interests. The most common approach to buying property is 'joint ownership, joint liability'. That means, should the relationship break down, according to the courts you would be entitled to a 50/50 split of equity - regardless of whose deposit was used.
There are options to protect yourself so be sure to talk to your adviser and solicitor to discuss the best approach.
Have a look at your credit file and see what can be done to improve it. Some of the best ways to do this are the simplest ways:
Make sure you pay your bills on time, including mobile phone contracts. Keep on top of those old contracts you have and be sure to cancel them correctly.
Register on the electoral roll at your current address - This confirms your ability to vote in the general elections. By proving your address, you are considered to be more settled, and your credit score will improve as your address is known and confirmed externally to any potential lenders.
Do not cancel direct debits without cancelling any agreements directly with the provider. Many people think that if they cancel their direct debit, they will not need to continue paying for a service. This is not true if you have an agreement in place. Without speaking to the provider, they may attempt to write to you and if they cannot make contact, they could flag a credit default on your profile.
Look out for fraud on your credit profile - If you see anything on your profile you do not recognise, it's important to flag this to your credit reference agency. Credit fraud involves using your name and address to take out loans and credit cards. These loans are then not repaid, and this will have a serious impact on your ability to borrow.
Following these rules will help you to keep on top of your credit score and improve the chances of obtaining the mortgage you want.
Buying your first home is an exciting time, hopefully, this insight has provided you valuable knowledge of what to think about as you go through the process. I'm confident that by following my 5 considerations for first time buyers, you will be well on your way to picking up your keys in no time!
Stuart is an expert in Property, Money, Banking & Finance, having worked in retail and investment banking for 10+ years before founding Sunny Avenue. Stuart has spent his career studying finance. He holds qualifications in financial studies, mortgage advice & practice, banking operations, dealing & financial markets, derivatives, securities & investments.
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Think carefully before securing debts against your home. A mortgage is a loan secured on your home, which you could lose if you do not keep up your mortgage payments. Check that any mortgage will meet your needs if you want to move or sell your home or you want your family to inherit it. If you are in any doubt, seek independent advice.