Quick guide for first-time buyers

Taking out a mortgage and buying a new home is never an easy task – and for first-time buyers, it can be a daunting experience. But here’s the good news – it doesn’t have to be.

With the right advice and preparation, you can make buying your first home a much smoother experience. Here are a few quick tips for preparing for your first house purchase.

Save up for a deposit

A deposit should be a priority when buying a new home – especially since mortgage lenders will no longer offer mortgages without one. There are two major advantages to putting down a deposit: firstly, it will mean you automatically have ‘equity’ in your home (and therefore you fully own a certain percentage in your home). Secondly, the bigger the deposit, the less you have left to pay on the mortgage, and the better the rate you are likely to be offered.

Look at home ownership schemes / new home incentives

Because getting onto the first step of the housing ladder can be difficult, a number of schemes have been brought in to help first-time buyers.

One of these is home ownership schemes, which enables you to buy part-ownership of a property, and either rent the remaining share from a housing association or take up a loan to fund it.

There are also a number of ‘new home incentives’ in place - in particular affordable ‘starter’ homes which tend to be modest but are sold for a lower price than a majority of existing properties. Many developers have started adding ‘sweeteners’ to these deals, including help paying the mortgage for a fixed period and even vouchers for food.

Get mortgage advice

Above all things, a professional mortgage adviser will be able to guide you through the process. A mortgage adviser can save you time and effort by searching the market on your behalf and finding the best deals possible (based on your own financial situation and credit history).

Things to remember

Houses are getting cheaper

With many house prices currently much cheaper than a year ago, first-time buyers will benefit from smaller mortgages on properties which should pick up in value over the next few years. That said, some homebuyers may want to wait until house prices drop further before they make a purchase.

Shorter ‘chain’

When people move home, one of the biggest frustrations is being part of a chain – waiting for other people to sell so that they can leave their properties for the next owner. As a first-time buyer, you only have to wait for your seller to find a new home, which makes your job an easier one.

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