Buying your own place for the first time is incredibly exciting. It gives you a sense of freedom that you do not get with renting and means you are investing your money in something that is all yours.
Despite the excitement, it can also be an overwhelming process. As well as the physical move, there is the move from renting to being responsible for a mortgage. Here are some of the things you need to consider in order to prepare yourself.
Deposit
First and foremost, do you have the money available to even consider buying a home? If you do, how much do you have and what price of home could you potentially purchase? While there are calculators online that help determine these things, it is always best to speak to a professional if you are seriously considering getting on the property ladder.
A mortgage advisor will be able to assess how much you can afford to borrow, the size of deposit that you will need, and the amount you can offer on a home.
Credit rating
You will also need to understand what your credit rating is. You will not be able to take out a mortgage or get a reasonable offer unless you have a certain credit score which is why you may need to look for ways to improve your credit score .
There are a range of different factors that impact this, including missed loan payments or excessive credit card debt. Equally, having no credit history can be detrimental as it this provides no insight. Essentially, banks are looking to see that you can handle credit responsibly. If you have a low credit rating, there are several things you can do to build this up, from setting up a regular direct debit to settling outstanding debts.
Extra costs
You’ll also need to look at the additional fees that can pop up when moving from renting to a mortgage. As well as the deposit, there is a whole host of other costs that will need to be paid.
This can include legal fees for the solicitor doing your conveyancing, survey costs, and potentially stamp dutyA tax paid by the buyer when purchasing a property. if you are paying over £300,000 for your property.
Knowing these costs will allow you to prepare for them and make sure you can afford the true price involved in moving and owning a home.
Application
If everything is already in order, then you are good to start applying for your mortgage. If you have chosen to work with a mortgage advisor, they will be able to do this on your behalf. They will likely advise that you acquire a mortgage in principle first, to put you in a strong position during the viewing stage.
When it comes to finding a mortgage, different providers offer varying rates and lengths, and it can be very confusing to know which product to choose. Therefore, for your first home, it is much easier to have a professional do this for you. Many even offer their services for free but be sure to check this before proceeding.
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