Buying your first home is always daunting if you’re not aware of the process. You must know the home-buying process in the UK and the overwhelming property market, including prices, mortgage rates, regulatory norms, etc.
This will keep you on guard when considering owning a sweet home for you and your loved ones.
This article is about to get you off the hook as we’re going to give you seven essential tips for buying your first home. From building your deposit to necessary mortgage advice, we’ve got you covered.
So, without any further ado, let’s get down to the details below.
1. Prepare Your Deposit
Building your deposit is one of the most essential things you must do when planning to buy your first home. You must know what your deposit should be in your bank account. Usually, it should be at least 5% of the property value.
Let’s say you want to buy a property that costs £300,000. So technically, you need to have a deposit of at least £15,000 in your account. Remember, with a larger deposit, you increase your chances of getting a mortgage.
However, keep in mind that house prices are increasing, so you must prepare with a healthy deposit before applying for a mortgage for your first home. Also, you may get a government bonus of up to 25% of your deposit to increase the chance of seamlessly buying your first home.
2. Shape Your Current Account
Your credibility for buying your first home will depend on your current account’s status. The lender who’s supposed to lend you money will definitely do an affordability test of your current account. This test shows how you’ve been doing with your monthly income and expenses.
So, our tip is to start organising your current account at least six months before your mortgage application. This will help you get a clear shot at your earnings and incomings against the expenses and outgoings in your account.
You’ll do better if you get rid of any expensive services you’re currently enjoying through your current account. Cancel any luxurious spa or gym membership, hotel or leisure club membership, credit agreement, etc.
Following these tips may give your current account a better shape and a much more suitable profile for landing a good mortgage for your home.
3. Check Your Credit Rating for Borrowing
One of the most important things that many first-time homebuyers miss out on is checking their credit score. If your credit rating is not in order, you will not likely get a good loan for your home.
Most lenders will check your credit rating to determine whether they should let you borrow the necessary amount of money or not. They’ll inspect your mortgage application to check your current credit rating.
Although your income is a major factor in getting a home loan, a good credit score will increase your chance of getting a higher amount.
4. Check Your Buyer Stamp Duty
Another essential tip for buying your first home is to know about your first-time buyer stamp duty. It’s a tax you must pay on the property you’re buying.
If you’re planning to buy a home that costs up to £425,000 in North Ireland and England, your first-time buyer stamp duty is zero. However, if the property’s price is above that and up to £625,000, the stamp duty is 5%.
You must contact the local authorities to check what stamp duty applies to buying a home in your area.
5. Shared Ownership Can Be Helpful
You may go for shared ownership when buying your first home. To do this, you must contact the local housing associations or private developers who would permit you to buy a shared portion of the property. Whatever remains of the property should be rented to you on a monthly rent basis.
However, you can always buy the rest of the property when it’s affordable for you. There might be costs involved, like monthly service charge, maintenance works, etc. Besides, such properties may entail leasehold, which means you’ll only own the property with the land discounted from your ownership.
6. Get a First Homes Scheme
One of our top first-time homebuyer tips is the First Homes Scheme. The government launched this scheme back in 2021 that facilitates the first-time buyers with a 30% discount on the property.
It’s a lifetime scheme, which means the offered discount will last forever. Every time the property is sold, the 30% discount will apply. However, you must first check with the local authority to see if you’re eligible for a First Homes Scheme in your region.
7. Check Additional Government Schemes
Since the UK government is planning to provide quality homes to millions of people in the coming years, they’re facilitating multiple home-buying schemes.
A few notable schemes you may check are Rent to Buy, Right to Buy, Armed Forces Home Ownership, Help to Build, etc. Find out which scheme applies to your circumstances so you can get on the property ladder by purchasing your first home.
Final Words
So, these are the seven first-time homebuyer tips you can follow for buying your first home. From building a deposit to checking your credit score, from checking your buyer stamp duty to using a suitable government scheme— these valuable tips can guide you in the right direction.
Don’t forget to check as many properties as possible to land the most suitable home for you and your loved ones.
However, consult licensed and experienced professionals like realtors, mortgage advisors, bank officials, etc., to guide you through your first-time home-buying journey. Salik&Co can be your best bet if you’re looking for homes for sale in East London. They are the local property experts who can deliver solutions for your property needs. So check them out and have a hassle-free experience buying your first home.
