Five questions every first time buyer should ask

By 23rd June 2016 Conveyancing No Comments

buying a first home
First time buyer? The conveyancing team at DMA Law is here to give you the key to buying your first home.

Our goal as residential conveyancers is to ensure that your home buying process is simple, clear, and as stress-free as possible. We offer competitive pricing and represent our clients with honesty and transparency, to be sure you are making the best decisions for your personal circumstances.

Here are a few things to consider when planning on buying your first home:

1. How much do I need to have saved?
We generally recommend that first time homebuyers have plenty saved, not just for the deposit but also as a cushion for the mortgage payments and other investments required when purchasing a home.

The deposit can be as low as five per cent of the cost of the property, but it’s best if it’s closer to 20 per cent, which will ensure you receive a good mortgage rate. So if you’re planning to buy a home near the £200,000 mark, you’ll be in a great position if you have at least £40,000 saved up.

However, if you utilise a housing scheme like Help to Buy, you only need a deposit of five per cent. The rest of your deposit comes in the form of a ‘loan’ from the Help to Buy scheme. This is useful for first-time buyers (though others can use it too) – but it is worth having a plan to pay off what you owe as quickly as you can.

You’ll also need to consider additional expenses, like Stamp Duty and Land Registry fees.

2. Do I qualify for a Help to Buy ISA?
The offer is open to every first-time buyer aged 16 and over. You need to have saved at least £1,600 yourself, which gives you a £400 bonus and £2,000 in total. A Help to Buy ISA can be used for any property costing less than £250,000 (£450,000 in London), and the Government adds 25% tax-free to whatever is in the ISA when you use it for a deposit. Find our full guidance on Help to Buy here.

You can also check out this guide to the government’s home buying schemes – or simply discuss your options with a conveyancer.

3. Can I afford a mortgage payment?
After you’ve invested your savings into a deposit, can you comfortably afford the monthly mortgage payment? Most first time home buyers find that their mortgage payment isn’t far off from what they’ve been paying to let, so don’t fret. However, it’s a good idea to discuss the calculation of your mortgage payments with a mortgage broker, and all mortgage lenders are now required by law to discuss your spending in a lot of detail, to ensure you are able to afford repayments.

4. What type of property would I like to own – and is it a logical choice?
This is where the process becomes exciting. Do you want a flat or a house? New build or an existing place with ‘character’? Which location suits you and your family? How many bedrooms do you need? Bring a family member or friend with you while seeing houses to help confirm that all of the important details match your desires.

5. Should I submit an offer?
Once you’ve identified a property that you’re interested in purchasing, you will want to consider a few more things. How long has it been on the market – and if it’s been long, is there a reason behind this? Why has the seller put the property on the market? What’s included in the sale? Is the vendor under contingency? These are some of the questions that a conveyancer can ask – and answer.

Ready to take the first step toward buying a home?

Get in touch with the DMA Law Conveyancing team and we will be happy to walk you through the process of buying your first home.
We have offices in Darlington, Chester le Street, Consett, Peterlee and Hartlepool, so where ever you are hoping to buy across the North East, one of our team will be able to assist you throughout the whole process.