FIRST TIME BUYERS
If you’re a first-time buyer wondering what you need to buy a house or flat, you’ve come to the right place. This guide takes you through the process of buying your first home, including saving your deposit and applying for a mortgage.
How much deposit do I need to buy a house?
Before looking at properties, you need to save for a deposit.
Generally, you need to try to save at least 5% to 20% of the cost of the home you would like.
For example, if you want to buy a home costing £150,000, you’ll need to save at least £7,500 (5%).
Saving more than 5% will give you access to a wider range of cheaper mortgages available on the market.
Budget for the other costs of buying a home
Apart from your monthly mortgage payments, there are others costs when buying a home.
- Survey costs
- Solicitor’s fee
- Removal costs
- Buildings insurance
- Initial furnishing and decorating costs
- Mortgage arrangement and valuation fees; and
- Stamp Duty (Land and buildings Transaction Tax in Scotland, or Land Transaction Tax in Wales).
First-time-buyers will pay no Stamp Duty on the first £300,000 for properties worth up to £500,000.
Make sure you can afford your monthly repayments
As a first-time home buyer, the most important thing to bear in mind is whether you can really afford to take this step.
It’s wise to put together a budget before you start looking for a property.
There are now strict checks when you apply for a mortgage.
Lenders will check you can afford the mortgage and also ‘stress test’ your ability to make your payments if interest rates were to rise or if your circumstances changed, such as a planned retirement date or if you started a family.
As part of the mortgage application process you’ll need to show the lender evidence of any outgoings you have and prove your income.
Finding a mortgage
There are many different mortgage deals to pick from, so choosing the right one for you can be tricky.
It can depend on several things, so it’s a good idea to do some research and talk to experts such as Echo Finance.