First time buyer

The 6 steps to buying your first home

Buying a first home is a big step and for many first time buyers it’s hard to know where to start. We’ve put together this step by step guide to help you on your journey

Step 1: Be realistic about your budget

Once you’ve made the decision to buy your first home, you need to be realistic about how much you can afford to spend. An appointment with a mortgage advisor will help you to understand how much they are willing to lend you but it won’t always match your affordability. Work out exactly what you can manage to put towards a mortgage before you start looking.

Elliot Castle, Founder and CEO of We Buy Any Home says: “While saving for a deposit and securing a mortgage is one of the most important steps towards owning a home, many first-time buyers forget to consider the additional costs that can incur once you have bought a property; building insurance, ground rent, maintenance, council tax, parking fees, internet & wifi charges, utility bills, a TV license; these are just some examples of the many costs that will start to rack up once you become the legal owner of a property.”

Step 2: Organise your deposit

It’s very unlikely you will be able to get a mortgage without having some money to put down as a deposit, but saving such a substantial amount of money is extremely challenging. One of the first things to consider is if you can save money on your current rent as a way to reach your deposit goal quicker – either by downsizing, getting a lodger to split the cost, moving to a cheaper area or by moving in with parents.

Secondly, there are ways to get financial help with a deposit, especially if borrowing from the ‘bank of mum and dad’ isn’t an option. You could look into finding a guarantor for your mortgage – this allows a parent or other to help you buy the property without having to actually pay out a large sum. There is also the Help to Buy government scheme offered by lenders on new build properties providing an equity loan if you only have a 5% deposit saved. And you might also consider a shared ownership deal – where you purchase only part of the property and rent the rest. This means you only borrow a percentage of the property value making the amount of deposit you need considerably less.

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Step 3: Find a property

Once you have all the financials in place, you can finally start looking for a property! Decide on the location you want, the types of property you are open to and what features are important to you. Write these down in order of importance and mark down those which you are willing to sacrifice. Always take someone you trust along with you to viewings so they can give you honest feedback. And always visit a property at least twice and at different times of the day if possible.

Step 4: Make an offer

You’ve found the property of your dreams and it’s time to make an offer. Don’t be afraid to negotiate says Castle: “Most first-time buyers feel nervous or uncomfortable negotiating on a price for their dream property. Because of this, they may end up paying more than they need to for the property. Before making an offer, it’s important for first-time buyers to do their homework and spend some time researching the property and other similar properties in the local area – as this will help them to decide on the best offer they can make. It’s important to consider buyer-demand in the area too by using property websites to investigate the going rate for houses nearby and to see how much they are selling for. Also look at the current competition and how the housing marketing is performing in the area at the time. First-time buyers would also benefit from asking their estate agentslots of questions about the seller. For example, find out if the seller is in a hurry to sell or been trying to sell for a long time, they may be willing to accept a lower offer to make a quick sale.”

Step 5: Don’t skimp on the finer details

You‘ve had your offer accepted and it’s now time to arrange for your solicitor and survey checks. “Many first-time buyers make the mistake of skipping a proper property inspection,” says Castle. “This is usually because they are not willing to pay for a survey or have fallen in love with the property so much that they are in a rush to seal the deal and move in. Although it may not seem like a priority at the time, everyone should arrange for a professional survey to take place before they complete on a property, even if the property is brand new. It might look great on the outside, but there could be a possibility that the property has underlying structural issues that you cannot see, such as rotting floor under the carpets, rising damp or a leaking roof – which will all end up costing you more money in the long run.”

Step 6: Finalise and complete

The next steps are to finalise the mortgage, exchange contracts and complete your sale. Your solicitor will handle the majority of this but it can be a worrying time as a kink in an onward chain can push back your completion date and your hope of moving in. But be wary of misjudging timings, warns Castle. “I often hear stories of first-time buyers who have moved out of their rented property and in with family, or ordered a brand-new corner sofa and matching coffee table thinking they will be moving into their new home very soon – but then the property sale is delayed and they are stuck. For some, the process will run very smoothly and take only a couple of months. For others, unexpected circumstances will arise and slow things down. First-time buyers shouldn’t rush to move out of their existing home or buy furniture for their new home until contracts have been exchanged and a completion date has been set.”

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