Beginners guide to buying your first home with a loved one…
14th February, 2019
While couples up and down the country celebrate Valentine’s Day, some may well be thinking about taking that next big step.
No, not kids, we’re talking about getting out of the rental market, or moving out of your parent’s house and buying your first property together.
We won’t lie, it’s a major step for anyone and it will most likely be the biggest financial investment you’ll ever make. Buying a home can also be one of the most stressful things you’ll ever do, but also one of the most exciting! But, here at Shropshire Homes we have over 35 years of experience in helping people buy their dream property.
Below are our tips to help couples buy their first home:
This is the big one. You need to have a clear idea about what you can afford. Because this will be a major investment by you and your partner, you need to sit down, look at your income and outgoings and come up with a realistic and honest assessment of what you can afford.
- The search
Whether it’s a one-bed town centre apartment, or two bed semi-detached house in the suburbs, it’s crucial you have a clear idea about the type of property you want and where you want to live, otherwise you’ll get bogged down with too many properties to choose from.
- Decide what’s important
You also need to filter your search and consider what are the must-haves. For example, do you need to have things like off-street parking, garden, en-suite bathroom, separate living and dining rooms, and so on. But try to be realistic in your search. It’s rare that people, particularly when looking to get on the property ladder for the first time, will find a home that ticks every box. Sometimes you have to accept that what you want either isn’t available, or is way outside your budget.
- The mortgage
Don’t be embarrassed if you don’t know much about mortgages. You weren’t taught about them at school and the only time you have anything to do with them is when you’re buying a property.
The simple guide to mortgages is there are two main types:
- Fixed rate
- Where the interest you’re charged stays the same for an agreed number of years, usually between two to five years.
- The main advantage is peace of mind that your monthly payments will stay the same, helping you to budget properly.
- The main disadvantages are fixed rate deals are usually slightly higher than variable rate mortgages and if interest rates fall, you won’t benefit.
- Variable rate
- The interest you pay can change depending on what happens to the Bank of England’s interest base rate.
- The main advantage is freedom in that you can overpay or leave at any time.
- The main disadvantage is your rate can be changed at any time during the loan e if the Bank of England increases the base rate, your monthly mortgage bill will go up. Conversely, if it lowers the rate, your bill will come down.
- There are variations of this type of mortgage, such as Offset mortgages, discount mortgages, tracker mortgages, and capped rate mortgages, so to be sure speak to a mortgage advisor for a full outline.
We can put you in touch with our mortgage advisors for free mortgage advice. Just get in touch via our sales advisors, or alternatively call New Homes Mortgages on 01543 464144 or RSC on 01614 866278.
- How much can you borrow?
When a mortgage lender looks at how much they will give you, they will look at your income and your outgoings. So, the more money you are committed to spending each month, whether that’s on direct debits, eating out, drinking, subscriptions/membership fees etc, the less you can borrow. You can find many calculators online to help you, but keep in mind the figure given should be used as a guide.
- Work out your loan to value (LTV)
You’ll see this term a lot and, in a nutshell, this is the ratio between the value of the loan you take out and the value of the property, expressed as a percentage. The remaining value is paid as a deposit. For example, if you’re looking for a property that is valued at £150,000 and you have £30,000 available to use as a deposit, you’ll need a loan of £120,000 in order to purchase the property.
So, calculating your LTV is simple. Take the amount you need to borrow, divide it by the value of the property and multiply by 100 to get your percentage i.e 120,000 ÷ 150,000 x 100 = 80% LTV.
This is definitely the most exciting part!
With the likes of Rightmove available at your fingertips, you can view countless properties from the comfort of your sofa, but nothing beats physically walking around a property and getting a real feel for it. But try and see a good number of properties so you can get a clear idea of what’s available for your budget
Below is a list of a few things to consider when you’re viewing a property:
- Light – Find out which way the property faces as it will impact the amount of light it gets, as will the size of the windows. And keep an eye out for a south facing garden!
- Take a friend – they’ll give you an objective view. Its what friends are for.
- Second viewing – It’s crucial that you go back and see a property that you’re potentially interested in, particularly at a different time of day. If you did a day visit the first time, try going in the evening for the second visit as the look of the house can be quite different
- Room sizes – If you’re seeing a property with no furniture then you have to try and visualise that room with furniture in it. Take a tape measure with you and some measurements about how big your current bed, sofa dining table are so you can measure them out in the rooms
- Plumbing – Turn the taps on to check the water pressure. Ask if the pipes are insulated, and ensure they are not lead, which would have to be replaced. Do the radiators actually work? How old is the boiler? If the hot water tank is situated in the roof it is probably an old one, and may have to be replaced soon. One of the great things about buying a new build is the boiler will come with a 10-year guarantee!
Remember, treat buying your first home like an adventure, or like a relationship – it’s exciting to start with, but stay focused and committed to it so the enthusiasm doesn’t fizzle out!