If you’re a first-time buyer, this could be the year you make your move. Lenders are offering competitive deals designed to meet the needs of those with smaller deposits. Stamp Duty has been cut for first-time buyers. There are more entry-level properties coming to the market now that some buy-to-let landlords are selling following the recent tax and Stamp Duty changes. Sellers, particularly in the capital, are reducing their asking prices to attract buyers, all of which could make your property purchase potentially more achievable. For those planning their move there are some practical steps you can take to ensure you reach your goal.
Draw up a budget
Moving can be an exciting but expensive time. We’ll help you work out how much you’ll need for a deposit. Although you can get a mortgage with a 5% deposit, some lenders require more and will offer better deals to those with bigger amounts saved. The good news is that as a first-time buyer you’re now exempt from Stamp Duty on first-time purchases up to £300,000 and the existing rate of 5% will apply between £300,000 and £500,000. The relief will not apply to properties above £500,000.
Drawing up a budget will help you work out how much cash you will need for the fees you can expect to pay. There are costs involved with arranging a mortgage, and we will talk you through these in detail and confirm them in writing. You’ll need a solicitor or a conveyancer to carry out the legal work and you’ll probably want to have a survey done to ensure the property is in a good state of repair.
Gather the evidence that lenders require
The chances are you’ll be taking out a sizeable loan, so lenders will want evidence that you will be a reliable and responsible borrower. Keeping up to date with credit card payments, mobile phone contracts and other regular payments like your rent will help. Cancelling unused subscriptions or cutting your spend on entertainment can be a good move, as lenders will look carefully at your outgoings. Check your credit report, as this will be scrutinised too; it’s a good idea not to make any new credit applications in the six months before you apply for a mortgage.
Explain your circumstances to sellers
Don’t forget that being a first-time buyer has distinct advantages from a seller’s point of view. You could prove to be a more attractive proposition than another potentially-interested purchaser who has a property they need to sell before they can proceed.
Check prices on the web
Many property portals provide actual sale prices achieved for properties in the area where you are looking to buy. This is generally a more reliable guide to values than the prices at which properties are being marketed. This information can help you form a picture of what a property is likely to sell for, and help you make a realistic offer.
Your home may be repossessed if you do not keep up repayments on your mortgage.