Buying your first home can be an exciting but also daunting experience. There are many factors to consider, from saving for a deposit to finding the right mortgage and dealing with the hidden costs of home ownership. To help you navigate the process, here are some insider tips for first time buyers.
Understand Your Budget and Affordability
Before diving into the home-buying process, assess your financial situation:
- Calculate your monthly income and expenses.
- Determine how much you can comfortably allocate toward mortgage payments. Click here to use our mortgage repayment calculator on our website.
- Consider additional costs like property taxes, insurance, and maintenance.
Save for a Deposit
A substantial deposit is crucial for securing a mortgage. Here are some saving methods:
- Lifetime ISA (LISA):
- A LISA allows first-time buyers aged 18 to 39 to save up to £4,000 annually.
- You receive a 25% government bonus on your contributions when used to purchase a qualifying first home.
- Regular Savings Accounts:
- Set up a dedicated savings account for your home deposit.
- Automate regular contributions to build your deposit over time.
Explore Government Schemes
Several government schemes aim to assist first-time buyers:
- First Homes Scheme:
- Launched in 2021, this scheme offers newly built homes at a 30% discount to local first-time buyers.
- Eligibility criteria vary by location, so check if you qualify.
- Click here to learn more about the First Homes Scheme on our website.
- Mortgage Guarantee Scheme:
- Introduced during the pandemic, this scheme enables first-time buyers to secure a mortgage with a 5% deposit.
- Click here to learn more about the Mortgage Guarantee Scheme on our website.
- Deposit Unlock Scheme:
- Deposit Unlock allows you to buy a new-build home from participating home builders with just a 5% deposit.
- Click here to learn more about the Deposit Unlock Scheme on our website.
- Shared Ownership Scheme:
- You buy a share of the property (usually between 25% and 75%) and pay rent on the remaining portion.
- Over time, you can increase your ownership share through a process called “staircasing.”
- Shared Ownership properties are usually new builds or resales offered by housing associations.
- It’s a great way to get on the property ladder with a smaller upfront cost.
- Click here to learn more about the Shared Ownership Scheme on our website.
Research Mortgage Options
- Fixed-Rate Mortgages: Interest rates remain constant for a specified period (usually 2-5 years).
- Tracker Mortgages: Interest rates track the Bank of England base rate.
- Help to Buy ISAs: Although no longer available for new applicants, existing holders can still benefit from government bonuses.
- Speak to a Mortgage Adviser: Seek professional advice to find the best mortgage for your circumstances. Contact PLS Financial Services today.
Be Prepared for Additional Costs
- Stamp Duty Land Tax: Research the stamp duty rates applicable to your property price. Click here to use our stamp duty calculator on our website.
- Survey Fees: Consider a homebuyer’s survey to assess the property’s condition.
- Moving Costs: Budget for removal services and related expenses.
Stay Informed and Patient
- Keep up with changes in government schemes and mortgage regulations.
- Be patient during the process—buying a home takes time.
Remember, buying your first home is a significant milestone. Take advantage of these insider tips for first time buyers, explore your options, and make informed decisions. Happy house hunting!
Credit – Image by pch.vector on Freepik
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