So you’re thinking about buying your first home. First of all congratulations! It’s a huge step to take, so you should feel happy with yourself that you’ve set the goal for having your own property that you can add your own special touch to.
However, whilst this is an incredibly exciting time – it can also be very scary. A time when you’ll have to consider your finances, the commitment of purchasing a house, etc. it’s not something that should be taken lightly by any means. Before you take the leap and buy your first property, it’s vital that you’re thoroughly prepared in advance.
By conducting thorough research and seeking professional advice, you’ll get a better idea of how much you can realistically afford in your desired area. To help kick start this process, here are the top five things you should consider when buying your first home.
Your Ideal Budget
No matter what your age, this consideration should be at the forefront of your mind throughout the sales process. Any homeowner – whether they are a first-time buyer or seeking the perfect family home must think about this and keep it as a key consideration. You want to be able to afford your monthly repayments on your mortgage after all.
Therefore, it’s a good idea to sit down and work out a realistic budget and timeline before starting your house hunt. During this stage, think about what amenities you want nearby, what the price of houses are in your desired area, etc.
After the research stage, you can then create a spreadsheet which lists all of the costs associated with the move. Along with the initial deposit and monthly mortgage repayments, you’ll also have to factor in:
- How much the solicitor’s fee is.
- The cost of a survey.
- How much the moving process will cost – if you’re looking to hire a professional moving company on the big day.
- How much the building’s insurance or home insurance costs.
- Whether you’ll need to budget for redecorating or furnishing.
- Valuation and mortgage arrangement fees.
The Type of Property
Are you looking for a house? Or maybe an apartment is more suited to your lifestyle? Once you’ve worked out your budget, it’s time to consider the type of property you’re interested in. Everyone is different and therefore will want different features within the prospective property.
If you’re planning for the long term, you might also want to think about the number of rooms you have within your new home – is there a spare room in case guests come to stay? Want to get a dog, cat or other animals? Or perhaps you’re thinking about extending your family in the future? These are all things that you should keep in mind when scouring through the internet and viewing properties in person.
How You’ll Finance It
When buying your first home, it’s vital that you save for it far in advance. It’s not a cheap outlay by any means. So you need to know that you have the funds to cover it without it drastically affecting your finances. When it comes to the deposit, how have you saved and accrued the money? These are two things that a mortgage lender will ask when it comes time to apply for one.
If you’re considering taking on a loan, you’ll also want to inform the lender of how much you’ve received and the repayment terms. With a loan, it’s a good idea to calculate how much you can get by using a USDA calculator or other device, paying close attention to the interest rate, how long it lasts and your monthly payments.
First-time homeowners generally look for properties that are within easy reach of transport, close to family and to amenities. But whatever you’re looking for, it’s important that you have fully researched the area that you’re looking to move to before the big day. You don’t want to rush into buying a house in an area that doesn’t suit your requirements in the long term.
So talk to local estate agents and stay in the area to see what’s going on there. The location you choose will also reflect on the price – the more popular it is, the more expensive. And although it would be nice to afford a mansion in the heart of the area, it simply might not be possible for your first property.
Therefore, it’s worth spending some time filtering various options on property websites such as Zoopla, comparing and contrasting properties with the proximity to amenities. You’ll then be able to narrow it down to your top choices, arranging first, second and third viewings of the homes that stand out.
The Length of The Mortgage
This is one of the most important yet often disregarded considerations when it comes to purchasing a first home. If you require a mortgage for the move, you need to pay attention to the repayment terms.
Even though a 15-year mortgage might seem more tempting, you’ll end up paying around a ⅓ of the interest it accrues back to the lender. Despite it being shorter in length, the repayments each month tend to be higher (as well as the interest) meaning that you’re paying more overall.
Whilst it’s scary to think about getting a 30 or 35 year mortgage, it doesn’t have to be that way. If you get a fixed rate for 5 years or so, and you start to earn more money, you can always change the amount that you’re paying each month – meaning that you end up paying it off a lot quicker. Longer term mortgages also tend to offer better interest rates – allowing you to spread the costs more evenly.
Of course, with all mortgages, whether they are fixed or variable, 15 years or 35 years long, you’ll need to make sure that you’re ready for the commitment. Buying a house is a huge commitment – especially if you’re planning on doing it with a partner. So you need to ensure that you’re both ready for the payments and the responsibilities that come with the move.
It’s also critical that you’re aware of the mortgage application process before you agree to anything. For example, as part of it, you’ll need to show the mortgage lender evidence of your income as well as outgoings. This will prove that you can successfully make the repayments each month.
Even if you change career throughout the process as long as you have enough to cover the payments each month, it shouldn’t be an issue. As with most aspects of the purchase, however, it’s worth seeking professional insurance, to ensure that you’re on the right lines.
So, there you go. Those are the top five considerations you should take into account when buying your first home. No matter where you’re located or what your budget is, you must plan out the process and be aware of all that comes with it beforehand. You don’t want to find yourself in a sticky situation – purchasing your first house should be fun after all!
Although it might seem daunting, the end result will be worth it. A home that you can enjoy now and for many years to come, the stress that comes with the initial move will soon seem like a thing of the past. So, keep your head up and soon you’ll have your perfect home in a location that you love!