First-time buyer ‘must-knows’

Preparing to take your first step onto the property ladder? The process isn’t always smooth, but it pays to understand the various stages and complexities involved. Here’s our guide to help you make more informed decisions.

Mortgages

Unless you’re cash-rich, you’ll have to buy your first home with a mortgage. This is a type of loan used to buy property, usually requiring you to put down a deposit against the property’s value.

The larger your deposit, the better mortgage deals you’re likely to secure. This is crucial because it could save you thousands of pounds in interest over the mortgage term.

Various types of mortgages are available, including fixed-rate, variable-rate and tracker mortgages. Fixed-rate mortgages offer greater stability and predictability, with consistent monthly payments over a set period, usually two to five years. Variable and tracker mortgages fluctuate with the Bank of England’s base rate, which means your repayments could go up or down at any point.

Comparing your mortgage options is crucial to get the best deal for you. Consider the interest rate, fees and the total cost over the term of the mortgage. A mortgage advisor can provide clarity and help you find the best deal tailored to your financial situation.

A look at the home buying process

Once you have your mortgage in principle (an estimation of how much you could borrow from a lender), your attention can turn to finding the right property.

Start by researching areas you’re interested in, considering factors such as local amenities, transport links and the surrounding neighbourhood. Your budget may limit you to certain areas or types of properties.

Once you’ve found a property you like that’s roughly in your budget, you can make an offer through the estate agent. If it’s accepted, the legal process of conveyancing begins.

You’ll need to instruct a solicitor or licensed conveyancer to handle the legal work, including searches, contracts and registering your ownership with the Land Registry. This process can take several weeks and even months in some cases.

Before you get the keys, your mortgage lender will also conduct a valuation survey to ensure the property’s worth aligns with the amount they are lending you.

Additional costs to budget for

Many first-time buyers are caught off guard by the extra costs involved in the buying process. Expect to pay solicitor’s fees, typically ranging from £500 to £1,500, mortgage arrangement fees, survey costs and any expenses associated with moving home.

Stamp Duty may be at play, but it’s more unlikely you’ll have to pay it because first-time buyers are exempt on properties up to £425,000.

Budget for these upfront costs to avoid financial strain during the buying process.

Protecting your investment

Once you’ve completed a purchase, protecting your investment should be an immediate priority. Home insurance for your property is required by most mortgage providers, covering the cost of rebuilding your home in worst-case scenarios. Buildings insurance covers the property itself, while contents insurance protects your possessions.

Unlike a rented property, you’ll be responsible for maintaining your home and everything inside it. Consider setting aside a maintenance fund for ongoing repairs and unexpected issues that arise.

Regular maintenance should help to preserve the value of your property but also prevent minor issues from escalating into costly repairs down the line.