Are You Buying a Home for the First Time? Here’s What You Need to Know
First-time home buyers can be understandably uncertain or confused as to what steps they should take when it comes to purchasing their dream home. But if you’re a first-time home buyer, you simply need the right information to help you along your way. So, what can you expect when you are planning to buy a home and are thinking of getting a mortgage? Here’s what you need to know.
The deposit you can save or borrow will be crucial since it will affect the kind of mortgage deal you will get, how much you will have to repay every month and the amount of interest which will be charged to you with your mortgage. You need to make sure that you already have a deposit before you begin checking out different properties. In general, you need about 5% to 20% of the total cost of the property you want. For instance, if you are interested in buying property worth £150,000, you would need to save a minimum of £7500 in order to come up to 5% of the property’s value. If you can, you should save more than 5% – if you have more than 5%, you will have better access to a broader selection of more affordable mortgage products.
The cost of purchasing property does not just end with the deposit. Far from it. There are other costs you need to consider, and you need to have the budget for this as well. These costs include the survey cost, the fee of the solicitor, the cost of building insurance, the mortgage arrangement fee and the valuation fee, and other costs such as decorating and furnishing expenses.
You should carefully work out how much you can really afford to borrow when it comes to your mortgage, as this will affect how much you have to pay every month. Make a list of your expenses and your income and calculate how much you can afford to pay each and every month. You should also think about possible situations in the future, such as if you make a change in career, if you become redundant in your job, if you become ill, or if you decide to have children. Will you be able to pay your monthly mortgage bill then? It would actually be a good idea to make a plan for this, such as trying to save enough money to last you for 3 to 6 months if such situations arise.
There are definitely a lot of mortgage deals around, and this is where it can actually get a bit confusing. Your best bet would be to speak to a mortgage expert such as those from mortgage-wise.co.uk so you will know the options available to you and you can understand the different kinds of mortgages more easily. This way, you can make a better, more informed choice.