Becoming a homeowner for the first time will possibly be one of the biggest ‘firsts’ you will experience in life. A house is by far one of the biggest purchases you’ll make, not to mention a huge learning experience. Perhaps you are buying a place all on your own, or maybe you and your family are finally able to escape renting and have saved up a deposit to put down on a home.
Whichever category you fit in, here are some of the essential questions you should ask yourself as you embark on this exciting journey.
1. What Can You Realistically Afford to Buy?
When it comes to how much you can afford, it’s generally advised that you want to spend no more than a third of your monthly income on your mortgage. It’s also advised to think about what down payment you can afford, as the larger the deposit, the better for your future payments.
Typically, you’re looking at putting down anything from 10-20 percent of the purchase price. If you can put down more than this, you’ll also get a better interest rate on your loan. Triple your annual income for a rough idea on the mortgage amount you can aim for.
2. What Is Your Credit History Like?
Before you even think about the type of house you wish to buy for your first home, your credit history must be considered. It’s all down to your credit profile how easy you can get access to a mortgage, so try to do everything you can to improve your overall rating. This means no late credit card payments in the run-up!
You also need to showcase a strong track record of paying utility bills, phone bills and memberships on-time monthly too. Your mortgage provider will want to look through your previous bank statements to assess activity, so this must be as strong as possible.
Keep in mind that when it comes down to preparing for this, along with saving a deposit, you don’t want to put all your money into this and have none left for emergency savings.
What help and advice will you need?
A lot of people start the mortgage process by utilizing online home search websites, an estate agent, and mortgage advice websites. However, then comes the use of a solicitor, who will help you through the legal process, a mortgage broker (if needed) and then the actual provider you settle with.
Ensuring you have chosen a professional solicitor with extensive knowledge in the mortgage and property sector is vital. A local company with international expertise, like Bird & Co, will be skilled to take care of the legal side for you.
Referrals and online reviews are very helpful at this stage when you need professionals and companies to connect with.
What location area should I be looking for?
Only you know the answer to this one, but remember that ‘location, location, location’ is by far one of the most important factors to consider.
The home you choose will shape a new life for you, whether on your own, with a partner or with a family. The neighborhood you choose to live shapes the routes you will travel through, to work and for socializing. It reflects the schools in the area, the social scene, and how far away from friends and family you are.
Make sure you don’t rush the process of analyzing areas thoroughly. It’s likely that you will want to make your first home a place you stay for a good few years, so make sure everything is chosen properly.
How long will the buying process take?
There is nothing more unpredictable than the house buying timescale. You should understand everyone’s active part in the process, from the attorney, the mortgage provider to the surveying company. Your new home will need a full survey, and it’s at this stage where problems can be discovered which can set back the moving in date.
Communicate early with your solicitor and mortgage provider about your expectations. A smooth process can take around 2-3 months, but expect some delays in the process.
Overall, there is a huge amount of information to take in regarding buying your first home or a different home. Luckily, there are many guides that will get you through the process. If you happen to have a home here is a guide for a reverse mortgage option. You don’t have to struggle with making a purchase on your own.
