First-Time-Buyer Guide 2019
So it’s 2019 and you feel like you’re finally ready to tick off ‘buying a house’ from your bucket list? You might have already familiarised yourself with the task in great detail, or you may be wondering how things work from start to finish. But fear not! For Dafydd Hardy Estate Agents is here to guide you on securing your first home. Breaking down the process will help you to formulate a plan when it comes to securing your first time buy. While this article talks about what is typical in first time buying, every FTB has a unique experience so while we have tried to be accurate, yours might differ from what is described in the article.
Your deposit will need to be 5-20% of the cost of the home you would like to buy. More mortgages can be unlocked with more deposit saved; for instance, if you’ve saved 5% as opposed to 10% you might miss out on a wider range of cheaper mortgages. If you secure a 5% mortgage for a property costing £100,000 you will need a deposit of £5,000.
On top of the deposit, and monthly mortgage payments, there are other expenses to consider on the path to securing a purchase.
Furniture and decorating
Mortgage and valuation fees
Budgeting these extras and ensuring that you’re in a position where you can afford all of them will help you to plan your journey. If you feel any doubts as to whether or not you can afford everything, it is worth saving enough money to meet the expected cost.
Choosing an affordable property is hugely important in helping you feel secure and comfortable when buying a house. Don’t jump the gun and put yourself in a stressful situation where you feel like you cannot take on your mortgage repayments as they are too high.
Can you afford it?
The good thing is this; tests are carried out to determine whether or not you are capable of paying off a mortgage. It’s not necessarily great news if you fail these tests, but it gives you a good chance to continue saving, while not allowing you to take on a mortgage which might otherwise have proved too difficult to maintain.
A ‘stress test’ might be applied to test your response to changing interest rates, the changes that come from starting a family, or other personal circumstances which might alter your pay plan. Evidence of any outgoings, income and direct debits will need to be shown to your lender to further assess the likelihood of a smooth and frictionless repayment.
Finding a Mortgage
Do some research and remember that meandering through the tricky world of mortgages can be quite overwhelming. We would always recommend speaking with a mortgage advisor, and in our Dafydd Hardy offices we have the lovely Rachel from the Mortgage Advice Bureau on hand to help guide you, offering an introductory chat for free to see whether or not you are eligible and what options might be available.
Applying for a Mortgage
As we previously discussed, the most important part in the vetting process is ascertaining whether or not you can afford these repayments. The sort of evidence needed to determine your eligibility includes;
Any previous debts
Any other costs including commuting, family costs, clothing.
Expect to be asked for payslips and bank statements, along with utility bills. You may be asked for tax returns if you are self-employed and these would be going back over a two year period.
A Guarantor… for a Mortgage?
If you’re familiar with renting, then you may already have provided or been aware of the role a guarantor plays in a tenancy agreement. If you are finding it difficult to secure a mortgage deal, you could improve your chances by nominating a consenting parent, guardian or close relative to sign as your Guarantor. In the instance that you fall short on your mortgage repayments, they are contractually obligated to continue your payments until you are able to do so.
Viewings, Offers, and Securing Your Home
Once your mortgage has been agreed you can devote yourself to planning your first move. From viewings, to deciding upon a property and eagerly awaiting feedback on an offer you’ve placed, we will be with you every step of the way. We know that buying your first home is no easy feat, and that’s why our dedicated team want to give you the best experience.
© Dafydd Hardy 2020
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Dafydd Hardy is a trading name of Dafydd Hardy Estate Agents Ltd, Registered Company Number: 03733706
Registered Office: Victoria House, Plas Llwyd Terrace Bangor, Gwynedd, LL57 1UB