Monday, 21 November 2016

The First Time Buyer's Cheat Sheet

I feel much of my generation, generally, have it far easier than what our parents, grandparents etc. had it. However, with rising house prices, stricter lending rules and lets face it, poorer salaries, getting a foot onto the property ladder is tougher than ever.

Myself and Chris have been homeowners for about 5 month now and we feel incredibly lucky but it wasn't plain sailing for us either. So here's a little clarity on the whole 'buying a house' malarkey...

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So generally, most lenders require you to have a 10% deposit. My biggest piece of advice here is to save, save, save - whilst you're living at home (if this is possible) with little to no outgoings. We didn't save a lot and quite frankly, couldn't as we had little disposable income whilst renting our first home and both being on lower incomes than what we're on now. The UK Government offer quite a few schemes to assist in saving up for a deposit, you can find out more here. You could also have the option of a gifted/borrowed deposit off family. I know this isn't always an option for everyone but it is another viable option for you getting a step closer to owning your first home. Do check with the lenders on their permutations that they have with deposits.

This is a biggie. You need to know what you're going to be able to afford-utility bills and food shopping included. We didn't want to max out our budget as we still wanted to live and keep to a similar lifestyle than what we were previously. If you already rent, then you will know what you need to live on anyway. Always give yourself a buffer - don't cut it fine! Our rent for a smaller house was far more expensive than what our mortgage was for our nicer, bigger house - which is crazy! Setting a budget and a limit on your house price will make your search so much easier.

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View & Offer
We checked Right Move and local Estate Agents websites, every single day. It ended up consuming our lives! It's such a huge step, you need to be clear on what you really want to invest your life in. You should really contact your local estate agents and tell them your budget range, area and what you're looking for. They will then be able to contact you as soon as something comes on the market - giving you the opportunity to view it first before anyone else does (that's how we nabbed our house!).  For us, we didn't want a project as we don't have time or money on our side. We wanted somewhere which we can still put our touches on but needed little work. Once you've found the property for you - make an offer. When making an offer, most people tend to to go in with a lower offer. Use your judgement with this as you also don't want to ruin your chances by going too low either. There wasn't too much negotiation with our purchase, we went in low which was rejected and ended up paying asking price due to their situation. I still believe it was worth every penny! Of course, I live in the north of England where house prices are considerably lower than those of our southern counterparts - I get that but it's all relevant either way. get that mortgage.

Get a Broker
Probably my most invaluable bit of advice. Mortgage's are just a complete minefield. Even for me, who used to work with mortgages, found it a struggle as their lending rules and criteria differ so greatly. Lenders don't favour first time buyers with a low deposit so, I would get a broker who can search the whole market for you. This means they know roughly who would accept you and your current financial situation and who won't - saving you a lot of time and unnecessary searches on your credit report. Some brokers charge a fee, some don't. Mine, was a brilliant ex-collegue of mine and got us the mortgage we needed (it wasn't without it's hiccups and sleepless nights though!). They will also run through all the different types of mortgages you can get and advise you on what would suit your needs, which also minimises the risk of you getting a mortgage that you can't afford.

They will also help in getting all that paperwork sent out and they will contact the lenders directly throughout the process - so it's perfect if you haven't the time to spend ages on the phone to you chosen lender.

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Conveyancing Sucks
This was probably the most frustrating point throughout the whole process. You need to arrange a solicitor so they can take care of the legal side of things (the bits I STILL don't understand!). I wouldn't do this until you have your written mortgage offer - this will avoid any loss of funds you've paid your solicitor if your mortgage falls through. Estate agents and vendors will push you on this but stand firm and protect yourself and your hard earned cash. This part of the whole process can take weeks (anything from 6 to 12 weeks!) and is expensive. Get quotes first - do your research. Be prepared to badger your solicitor to death. I hate to tar them all with the same brush but they are slow, they do have other cases to work on and you can sometimes end up forgotten about. Our solicitor went on holiday the day before we we're due to exchange and complete without telling us - which caused me to have a huge freakout (poor Chris!). Just email and ring them for updates, you're paying them a lot of money!

It's the solicitors job to make sure it's all tickety-boo legally and that the property is habitable. For example, we had searches on the property to see if the house was at risk due to being in a historical coal-mine area. Once all the searches are complete and they've received everything they need off the vendors you can then exchange and complete!

Once contracts have been exchanged by you and the vendor - there's no going back, you're now legally bound to complete the purchase. I did feel a little sick when we exchanged, it only then sank in. At this point, the solicitor will arrange Transfer of Ownership with the Land Registry etc. Once exchange of contracts has happened, you're then ready for completion (the day you can move in!).

On Completion, monies are transferred from your solicitor to then vendors solicitor (mortgage funds and deposit), once they've confirmed receipt the estate agent will usually call to say you can pick up the keys...and then you can BREATHE! There's also a ton of helpful information on the Money Advice Service which will probably fill in any technical gaps I've missed.

Now it's the fun bit, filling your home with all the things that make you happy. Which is scented candles and white marble decor for me...#basic.

So whether you're just planning to buy in the near future or just wanted some food for thought, I do hope this has helped and broken the whole thing down in smaller, more understandable steps.
Happy House Hunting!


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