First Time Buyer?
Buying your first home can be a daunting and stressful experience. With the UK officially in a recession for the first time in 11 years it’s even more worrying.
If you’re looking for your first home during the recession there are some things you need to weigh up before making your decision.
Old or new?
You need to decide not only where you’re going to buy your first home, but whether to purchase an existing property or whether to buy a newly built home. There are many advantages of buying new over old (link) with the main benefit being that you can take advantage of the Help to Buy (Scotland) scheme enabling you to purchase your first home with just a 5% deposit. In addition, the price you pay will be within your budget as you won’t be in an offers over situation whereby several buyers are bidding for the same property, potentially pushing up the price.
Deposit
The more money you can save, the better. Establish how much money you can put towards your new home because the larger your deposit, the better the mortgage deal you will secure and the lower your payments will be each month. As a rule of thumb, try and save 10% of the cost of a property to obtain a mortgage with 25% being the optimum if you aren’t using Help to Buy.
Affordability
If you are going to buy a property in the next six months, try and pay off any outstanding debt including credit cards, loans and store cards. Also ensure all payments are up to date. As part of the affordability checks, any monthly dept payments will be taken into account and could affect the amount you can borrow.
Get advice
Talk to an independent mortgage broker or property development company to find out about your options. They will use their expertise to find the best mortgage for your circumstances and can make sure you get the best possible rate. They will also explain the process and give you a better understanding of what to expect during the home buying process.
Decide what is essential
When looking for a new property make sure you are realistic about whether it’s right for you rather than being swept up by the emotion of buying a home. Check the build quality, incentives offered, compare the price to similar properties, talk to people who have already bought a similar home within the development and make sure you have everything you need close by including transport links, green spaces and amenities. Also try and choose a property with lower running costs to keep your outgoings down.
Take your time
Don’t rush into anything and make sure you carefully consider all the factors involved. Talk to us at Urban Union if you would like further advice on buying your first home.