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First time buyers guide

First time buyers guide

We know that getting that first foot onto the property ladder isn’t always straightforward and no two purchases can be the same. However there are a  number of things that you can consider and do before and during your purchase to make it go as smoothly as possible for you. 

We have put together a short first time buyer guide to help you if you are looking to purchase a property for the first time.

If you would like some advice or to have a chat with one of our specialists then call or pop into your local branch.

Consider your needs

When you look for your first home you will no doubt have a list of things you really want from it. Finding a property that meets every single one of your requirements is extremely hard, if not impossible, so you must be prepared to compromise. Weigh up all the things you want in your mind, divide them into essentials and desirables and be prepared to trade-off the things you don't need. 

Make sure to consider all possibilities and research everything fully before committing. Don't forget non-property related things too, such as schools, travel routes, local amenities and medical centres. Read our area guides for a little assistance on some of these.

How much can you afford?

One of the biggest financial tasks you will ever face is saving for your mortgage deposit. Remember to budget for all the other associated costs of buying a home too such as solicitors, surveys, removals and possibly stamp duty.

Our expert mortgage advisers at Embrace Financial Services will be able to help you plan and budget. To get an idea in the meantime you can use our handy budget planner to see how much disposable income you may have for a mortgage or to save for a deposit.

Our expert mortgage advisers at Embrace Financial Services will be able to help you plan and budget.

The deposit

How much deposit you will need will depend of the value of the property you're looking to buy. If you're looking at the national average of £310,000 then a 10% deposit would be £31,000. However if the properties in your area are higher, for instance at £600,000 then you would need to have £60,000.

For some properties you can buy a house from as little as 5% with the government Help to Buy scheme.

With a Help to Buy: Equity Loan the Government will lend you up to 20% of the cost of a new build home, so you’ll only need a 5% cash deposit and a 75% mortgage to make up the rest. You won’t be charged loan fees on the 20% loan for the first five years of owning your home.

Find out more about Help to Buy

Generally, the more deposit you can put towards your property purchase, the better mortgage deal you are likely to be able to secure. The mortgages with the lowest, and therefore the best interest rates will only available if you have a large deposit. Mortgage deals also tend to work in 5% brackets so you are eligible for the better deals every time you hit these amounts; 10%, 15%, 20% and so on. There is usually no difference in rate if you have 17% rather than 15%, but an adviser will be able to talk you through it. 

Talk to Embrace Financial Services

Savings accounts

When saving a large amount of money, it's best to put it into a savings account, preferably one with limited access. Do your research and see what banks or building societies offer the best interest rates in order to make the most of your savings.

Keep track of your spending

It's a good idea to try and keep a list of what you spend, when you spend it and what on. There are plenty of smartphone apps out there to help, or even a basic spreadsheet will do. This helps you to see where you can make savings and helps you focus on the goal. If it helps, allocate yourself a set amount of spending money each month, week or day and give it to yourself in cash every day.  Any leftovers can go in a pot for the rest of the period.

Cut down on non-essentials

Keeping track of your spending will also help you identify any non-essentials you might be wasting money on. Whether it's an unused gym membership, extra nights out, or even take-away coffees, every little saving can help. 

Extra income

If you have the time, can you take on a part-time or evening job? Anything you can do to hit your target, do it. It’s only for a short while and you'll be so glad you sacrificed some time. Be sure not to overdo it though.

Set realistic targets

Set yourself 'realistic' targets to stay focused on them. If you try to give up things that you need or cut back too far then you're more likely to have to dip into your savings.
 

Mortgages

Most people cannot afford to buy their home outright from savings and will need a mortgage to fund the purchase. A mortgage is a loan secured on a property. You will be required to put down a deposit and you will need to apply for a mortgage to cover the rest of the purchase price.

You then need to repay the mortgage to the lender. Usually this is done in monthly instalments over the term of the mortgage.

Banks and building societies offer a range of mortgages with different loan amounts and interest rates. A mortgage specialist like Embrace Financial Services can search the market to find the most suitable deal for you.

There are a number of affordable options available when you’re looking for your first mortgage:

Specialist mortgages

Some lenders will offer specific mortgages tailored to first time buyers. Often, they will only require a small deposit.

Help to Buy

Help to Buy is a Government scheme aimed at helping purchasers with limited deposits. You secure as little as a 5% deposit on a property. Find out more about help to buy 
 

YOUR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.

Embrace Financial Services usually charges a fee for mortgage advice. The amount of the fee will depend upon your circumstances and will be discussed and agreed with you at the earliest opportunity.

Your property search

Take time and write a list of the areas that you want to live in. If you are moving to an area you don’t know, discuss with a local estate agent who can advise on the best areas, and even specific streets to look at to match your requirements.

Properties are usually posted on the main portals, social sites such as Facebook and estate agent websites so make sure you sign up for property alerts.

You can register for JNP property alerts by setting up a My Move account.

Viewings

When viewing a property you will likely get a 'feel' for whether or not it's for you straight away. 

However it's best to have a practical approach to the viewing. Does it meet your criteria? If you're compromising - is it to a level you would be comfortable with? 

Make sure to ask questions. This is the biggest financial commitment you will make so you need to be sure it's for you. If it's your second viewing then make sure you do a more thorough viewing. Check windows, heating, look in cupboards and check walls and floors. Make sure you know what's included in the sale and what will be going with the vendors. 

We have more information on what to look at on a viewing in our Property viewing tips.

Making an offer

Knowing how much to offer is tricky. Some vendors will be expecting the asking price whilst others will be open to negotiation. 

If the property has been on the market for a while or you think there are areas that would need work then you could offer lower than the asking price. However, if the property has just come to market or they're in no hurry to sell then they may be prepared to hold out for a higher price.

The vendor's estate agent will be able to give you a steer on what the vendor has asked for. 

You could also get a better price for the property if you're a first time buyer or not in a chain as this is likely to speed up the selling process for the vendor. It's also better if you already have a mortgage in principle in place.