5 Tips for First Time House Buyers

Whether leaving the family nest or moving on from renting, stepping onto the property ladder is a big milestone for first time house buyers. From finding the perfect property to securing a mortgage, there is lots to consider when hunting for that first house, so before you start planning paint colours, explore our top five tips for first time buyers.

1. Check Your Credit Rating

Before buying a house, your credit rating needs to be good enough to successfully secure a mortgage. A credit rating, or credit score, is an overview of how you have previously managed your money, including borrowing, repayments, and how much credit you use. 

Paying bills on time and making lenders or service providers aware if you are having trouble paying can help protect your credit score when you are planning to buy a house. Sticking to a budget will also help reduce the risk of missing any payments, which could impact your credit rating.

You can check your credit rating for free with the UK’s three main credit reference agencies, Experian, Equifax, and TransUnion. Most lenders use their ratings when considering someone for a mortgage.

2. Consider Government Schemes

A number of government schemes exist to help first time buyers move onto the property ladder. You can use a Lifetime Individual Savings Account (LISA) to save up to £4,000 each year towards your first home. This will be topped up by a 25% bonus from the government, increasing your savings by a maximum of £1,000 a year. If you are purchasing a property with another first time buyer, you can both put your separate LISA savings towards the cost of the same home.

Help to Buy Equity Loans are available for first time buyers who are purchasing a new build property which falls within the regional price cap. A deposit of at least 5% is required and you can borrow up to 20% of the purchase price as an interest-free equity loan. Interest-only repayments begin after five years.

The Help to Buy mortgage guarantee scheme allows lenders to guarantee mortgages for borrowers with a 5% deposit. In the event of repossession, the guarantee will compensate the mortgage lender for a portion of their losses. 

Shared ownership allows first time buyers to use a mortgage to purchase a share of a property from the landlord, who is typically the council or a housing association. You will pay rent on the remaining share. You can buy a bigger share in the property later, up to 100% of its value.

3. Be Aware of Extra Fees

Buying a property is expensive, even when you have successfully secured an affordable mortgage. Additional costs include estate agent fees, legal fees, surveys, and removals. Make sure that you have savings to cover these extra expenses when buying your first home. However, first time buyers do not have to pay stamp duty in England on properties worth up to £300,000.

4. Stick To Your Budget

Carefully consider all of your monthly outgoings when calculating how much money to borrow. This will ensure that you can afford your mortgage repayments. You will also need to have a deposit of at least 5% of the value of the home you want to buy to successfully secure a mortgage. 

Many first time buyers have to budget carefully in the months and years before buying their first home to save a deposit, and being budget-savvy will remain a useful skill when you do become a homeowner.

5. Know What You Want

The time, expense, and stress of buying your first home will all be worth it when you have the keys to your perfect property. But it’s important to know what your perfect property is before you begin house hunting. 

Make a list of priorities, including any must-haves like a second bathroom or outside space. You may have to compromise on some of the things on your wishlist, but knowing what is important before you begin your property search will make it easier to find your ideal home.

Moving Day Made Simple

Once you have a date to move into your first home, it’s time to book a removals service. Matthew Carter Removals specialises in helping first time buyers move to their perfect property in Oxford or further afield, so call our team on 01865 880 874 to enquire about moving with us. Alternatively, complete our contact form to get in touch.