Navigating the housing market, with its constantly shifting conditions and regulations, can be a challenge. That’s why we’ve crafted this comprehensive guide, tailored to provide you with the latest insights, valuable information, and practical tips to support you on your path to homeownership in Autumn 2023.
Make sure you qualify as a First Time Buyer
To be regarded as a first-time buyer you must not have:
- Previously inherited or been gifted a property
- Been added to the title deeds of a property purchased by someone else
- Previously acquired a property through a financial institution [1]
There may be exceptions to the above but it’s best to check with a mortgage adviser if you’re in any doubt.
Financially Budget
Deposits are often the most thought about and most hefty cost involved when you come to buy your home. However, it’s important to be aware of the other fees you’ll need to save and budget for in the process:
- A solicitor or conveyancer fees
- Mortgage arrangement and valuation fees
- Removal and moving costs
- Building insurance
- Contents insurance
- Initial furnishing and decorating costs
This is not an exhaustive list and other charges may come up during the process. If possible, it’s worth having a buffer pot to dip into in the event that unexpected fees crop up.
Get a Mortgage In Principle (MIP)
If you plan to take out a mortgage to help buy your property, get a Mortgage In Principle (MIP) before you start your search. A MIP is an agreement from your lender to grant you a specific amount provided the information you have given is correct. A mortgage adviser can organise this for you by searching the market for a great deal and it means you’ll know exactly how much you can afford to spend on buying your new home. [2]
Benefit from a Stamp Duty Discount (relief) rule
Stamp Duty Land Tax (SDLT) is a tax payable when you purchase a property in England and Northern Ireland, and the good news is that first-time buyers do not have to pay any SDLT on properties valued up to £425,000 (2023/24). Between £425,001 and £625,000, a tax rate of 5% will apply. But it will only apply to that slice of the price, rather than the full amount. If the property is over £625,000 and you are a first-time buyer, you cannot claim the relief and normal SDLT rates apply. [3]
Find a Conveyancer or Solicitor
Some people choose to have a solicitor or conveyancer whose services they’ll be using throughout the purchasing process enlisted at the start of their search. This means they’re in a position to proceed quickly when they find a property they like. This isn’t essential but may help to speed up the process.
Prepare for your MIP
Most mortgage advisers and lenders will usually request the same documents when arranging your Mortgage In Principle.[7] It’s a good idea to have the following ready as early as possible in the process so that there’s no delay in securing your MIP. You will often need:
- Proof of Identity and Address (including previous addresses, usually going back 3 years
- Income information (e.g. payslips and bank statements, or accounts if you’re self-employed)
- Confirmation of the source of your deposit
- Records of your spending (e.g. credit card bills, utility bills, subscriptions)
- Any credit agreements
Having the above documents ready in a digital format that you can email over to the contact arranging your MIP application, will help to kickstart the process into action.
Points to note about Mortgages
- A mortgage constitutes a financial agreement where a loan is obtained for a specified duration, commonly referred to as the ‘term’. Mortgage terms vary, extending from as little as 5 years to as long as 40 years. This time frame encapsulates the period during which borrowers make scheduled repayments towards the loan.
- A deposit of at least 5% of the property value is usually required when taking out a mortgage.[4]
- The lender providing you with the mortgage will secure your loan against the property. This means your home can be repossessed if you do not keep up with repayments.
- Various mortgage options exist, including fixed-rate, standard variable-rate, interest-only, and repayment mortgages.[5] Our Mortgage Advisers will be able to advise on the best type of mortgage for your circumstances.
- Initially, interest rates are typically set at an introductory level when you initiate your mortgage. Once this initial period concludes, you may transition to your lender’s standard variable rate, which can be higher. At this point, it could be beneficial to explore the option of remortgaging, allowing you to leverage potentially lower introductory rates offered by new lenders or consider a new product within your existing lender’s portfolio.[6]
Why choose B Mortgage Services?
When it comes to choosing a brilliant mortgage adviser, we’ve listed three key reasons to select us.
Fees Explained
As mentioned, while a deposit is important, it’s not the only cost you’ll have to bear when you buy a home. Our mortgage advisers will be able to explain all the different fees to be aware of from the start, such as legal and conveyancing costs.
Finding the best deal
We exist to find you a brilliant deal on your first-ever mortgage. We have a broad range of experience working with all types of lenders and, as mentioned above, we offer a ‘whole-of-market’ service. Take away the stress of trawling through comparison sites and leave the searching to us.
Help at every stage
While buying a property may seem overwhelming, our dedicated advisers can help you navigate every stage of the home-buying process, from offer to completion. We currently have over 100 5-star ‘Vouched For’ reviews, so you can be sure that you’re in good hands.
