First-time buyers guide to taking those first steps onto the property ladder

They say buying a home is the second most stressful thing you can go through in your lifetime. The prospect of owning your own home though is an exciting prospect. Here is a guide on the things you need to know, before taking steps to have your dream home.

Affordability

It is important to be prepared for what you can realistically afford. The general rule of thumb is that you can usually borrow up to 4x your salary, so if you are buying with a partner, add up your total earnings per year before tax. Think about the deposit you have on top of that to get an idea of a house price you could afford.

When you have an idea of how much you’re able to borrow, it is important to get a decision in principle (DIP) This can be done with a mortgage broker to get you the best deal for your circumstances. A DIP also increases buyer credibility from the perspective of a seller. It shows commitment to the buying process.

It’s important to remember that a DIP is not a binding offer from a lender. They use this to check your credit file and additional information, before making a decision on how much they may lend you. Lenders can always change their minds!

The hunt for your dream home

With the current mortgage market moving at a fast pace, you need to have an idea of what is really suitable for you. It’s good to consider making lists. One is a ‘must have’ list and the other is a ‘nice to have list. This will help to narrow down properties, and most home search sites such as right move let you filter it with your wants and needs. It is also handy to register with such sites, so you get notified as soon as properties matching your preferences come on the market.

Make the right choice

Finding that home that you love when you are a first-time buyer can be very exciting. It is important to remember to not offer higher than what you can realistically afford. Buying your first home comes with many added costs that you need to be aware of such as:

• Arrangement fees

• Valuation fees

• Stamp Duty

• Conveyancing fees

• Removal costs

• Service charges

• Mortgage repayments

Make sure when you find your dream home before you make an offer, get the fixtures and fittings confirmed in writing on the property. This can aid in guiding you to make the right offer.

That first milestone

So you’ve hit that first milestone and had your offer accepted! This is just the beginning. Remember that no parties are legally bound to complete the deal until the exchange of contracts.

This means there is still some uncertainty. If another buyer comes forward and offers more, the seller is well within their rights to retract your offer in favour of the other buyer. It is worth asking the seller to take the property off the market to limit the chance of this happening. Again, it cannot be entirely avoided.

The seller may also decide to not sell their property after all. This can be really disappointing and highly frustrating, but sellers are within their rights to do this.

Securing the mortgage

It is important to remember that a decision in principle is only valid for 30-90 days. This depends on which lender it is. So if you didn’t find the property within this time, double-check that DIP is still valid! If all is good and the mortgage that suits is still valid, it’s time to submit that mortgage application! Application time turnarounds can vary from lender to lender. In the meantime, you will need to be cracking on with the following:

• Getting a solicitor in place

• Be prepared to provide further information as lenders will be checking the property and your position as a buyer

• Keep in regular contact with your solicitor in regard to searches done on the property. These will be local authority searches, drainage searches and an environmental search

• Arranging a survey is a must! The different types of surveys are a homebuyer report, a full structural survey and a snagging survey.

The offer!

The lender finally comes through with the official mortgage offer, it’s time to celebrate! It is important to review this offer document with a fine-tooth comb, every single detail should be accurate. If something doesn’t look right, always question it with your broker or solicitor. Cross-reference the mortgage breakdown and lenders offer document against the original illustration you were provided with. Lastly double-check the mortgage offer conditions. All conditions will need to be met before the lender will release the funds.

Planning ahead

Most lenders insist on you having home insurance as a requirement of the mortgage. It is a good idea to have this in order, even though you don’t legally own the house as yet.

Final stages

You can see the finish line in the distance, you are nearly there! Now all that’s left will be the signing of the contracts and your deposit to be paid to your solicitor.

You and the seller will both have to sign the contract to say you are the legal owner of the property. Both parties' solicitors will then need to sign and swap contracts. You will then all provide your signatures on one another’s documentation. Once these signatures are complete, neither party can back out of the sale. If you do, you will lose the deposit you put into it.

As standard practice, your solicitor will do all the final checks on their end before you are requested to sign the transfer deed. Your solicitor will draw down the funds from your lender. They will then send the payment to the seller's solicitor and receive the title deeds.

You can now pick up the keys, you are a homeowner!