If you are planning on buying your first home, you probably have many questions. The process can be confusing and it is important to fully understand what you are taking on when you make such a major investment. We answer some of the most commonly asked questions of first-time buyers.
How do I know which is the right property for me?
The choice of property can be overwhelming, so it is helpful to make a list of what you want before you start looking. Focus on major points to start with, such as whether you want a property that you can renovate or whether you’d rather have somewhere that is in good condition with modern fixtures such as electrical car charging ports and UV panels.
If you choose a fixer-upper, make sure that you look into the likely costs before calculating your budget. Checkatrade suggests that the average price of renovating a three-bedroom home is between £38,000 and £74,000.
The area may be important to you, particularly if you have children and you want to be close to parks and good schools.
Try not to narrow down your choices too much early on however, or you may struggle to find the right property, particularly in a competitive market, where compromises may have to be made.
Do I need a survey?
You are always strongly advised to have a survey carried out when you buy a property. It is a major investment and you need to know exactly what you are taking on. There are different levels of survey suitable for properties of different age and condition. A Royal Institute of Chartered Surveyors (RICS) level 1 survey might be enough for a modern home in good condition, while a level 2 survey is advisable for a property older than 50 years or where you may wish to do some work or there appear to be areas of concern.
If you intend to renovate your home or it is large, old or unusual in design, you should consider an in-depth level 3 survey.
When should I apply for a mortgage?
It is important to apply for a mortgage before you find a property to buy wherever possible. This will allow the lender to carry out the necessary checks in plenty of time and they will be able to issue you with a mortgage decision in principle. This will demonstrate to the sellers that you are serious and ready to proceed. It can also save considerable time once the conveyancing transaction gets under way.
How much can I borrow?
You may be able to borrow up to 95% of the value of the property, depending on your chosen lender and the amount you will realistically be able to pay back each month. When calculating how much you can borrow, remember that mortgage payments could go up substantially if interest rates rise. Banks lend up to four times annual salary, but it is advisable not to stretch yourself too far.
As a first time buyer, you may be able to take advantage of the government’s Help To Buy: Equity Loan scheme if you are able to apply before 31 October 2022. This allows you to put down a deposit of 5%, with the government lending a further 20% (or 40% in London), on which no interest will be payable for the first five years.
When is the best time to buy?
If you can wait until you have a reasonable deposit to put down, you may be able to secure a more favourable mortgage rate. Once you feel you are ready, then you can look at the market and gauge whether the time is right. For example, are you able to comfortably afford a property in your favoured area or would you have to compromise and live somewhere cheaper? If so, maybe you would prefer to wait and save more.
When should I instruct a solicitor?
You can speak to a solicitor once you start looking for a property to buy and they will be able to start carrying out the initial identity checks and opening a file on your behalf. They will let you know what they need from you and you can provide this in readiness so that once you have a property to buy, they will be able to start work quickly.
Contact us
If you are thinking of buying your first home and you would like to speak to one of our expert property lawyers, ring us on 0333 305 5189 or email us at info@lpropertylawyers.co.uk
