Going from tenant to buyer

Being in a position to buy your first home is a dream scenario for those with years of renting behind you. But getting on the property ladder can also be an intensely stressful and emotional time and financially, it is the biggest commitment you will ever make.

There are amazing benefits that stem from owning your own home, however, so follow our top-six tips for first-time buyers to ensure you are as prepared as you can be for the whirlwind of home ownership.

Is buying better than renting?

There are huge benefits to be gained from buying your own home. Renting is often described as ‘throwing money away’ as, technically, you are paying off someone else’s mortgage.

But renting has its benefits, too. Mainly through the flexibility it offers than owning your own home cannot.

Financially, though, owning your own home puts you on a good pathway to financial security in the future, as you pay off your mortgage with a view to owning your home outright.

In a healthy market, you’ll also make money on your property as it increases in value.

The benefits of a bigger deposit

Anyone pondering buying their first home should know that they will require a deposit.

Usually the minimum you’ll need it 5% of the property’s purchase price, but if you can save more, you will reap the benefits.

A 5% deposit would mean buying a property at 95% loan-to-value (LTV) which could see you paying higher mortgage interest rates than buyers with a lower LTV.

Deposits of 10% or more will see some far more attractive interest rates offered by lenders and help keep your mortgage payments lower.

As an example, if you were looking to buy a semi-detached house in Crewe for £131,500, the average price in 2017, a 10% deposit would mean you need to save £13,150.

Add in additional moving costs

Buying a home is not just about the purchase price and deposit. There are many other costs that should be factored in when you work out your budget.

It’s an expensive time, but including all associated costs at the beginning will help you when it comes to knowing your maximum budget for your purchase.

Stamp Duty: First-time buyers currently pay 0% Stamp Duty on the first £300,000 of properties worth up to £500,000. Survey costs: Whitegates would always recommend you have a survey done on the property you are buying. These can cost between £150 and £1,500 depending on the size and the type of survey you need. Solicitor’s fees: Solicitors will take their fee from the purchase completion monies and generally charge between £850 and £1,500. Removal costs: While moving yourself is an option to keep costs down, if you do choose to go with a removals company you’ll need around £600, but sometimes more. Many companies offer a packing service which could cost a further £250-£300. Mortgage arrangement and valuation costs: Most lenders will charge mortgage arrangement and valuation fees. These can sometimes be added to the loan but the costs will vary depending on the lender. Other costs: While decoration and furnishing costs for your new home might seem like money well spent, make sure you include it in your budget. And don’t forget to get quotes for buildings and contents insurance. You should be keen to protect your home having spent so much money buying it!

Are the mortage payments affordable?

When working out your budget, take some time to think about the situation should your circumstances chance.

Is your income likely to change or is an interest rate hike on the horizon? All of these things can affect your ability to pay your monthly mortgage payments and need to be considered before applying for a mortgage.

Lenders will generally apply a ‘stress test’ to see if the payments are affordable should your situation change so it’s worth establishing your ability to pay before submitting your application.

Make sure the property is in good condition

Emotion can play a big role when it comes to viewing properties. And that means things that should set the alarm bells ringing often go unnoticed.

Whitegates recommends you take someone trustworthy along with you when viewing potential homes, or a tradesperson you know will be able to spot issues that may affect your decision.

Here are just a handful of things you should keep an eye out for when viewing properties:

Tell-tell signs of damp Large cracks in either the walls or ceilings A roof with missing tiles Noise from neighbours Poor electrics Signs of rot Low water pressure

Visit the property in the evening

Most people opt to view properties during the day, mainly for convenience. But the property you are all but set on making an offer for could be completely different after daylight hours.

Take the opportunity to visit the property and area around it in the evening if you can and before making any concrete decision.

Once the neighbours are home from work, the peace and quiet you strive for could be completely shattered.

Visiting at different times of the day will give you a well-rounded view of the property and enable you to make a sound, informed decision on any offer.

Always stick to your budget

Home buying is an emotion-filled process. And there’s a good chance that if you love a particular property, somebody else will feel equally besotted with it.

That could mean you are tempted to increase your budget to an unhealthy level in order to secure said home. Try to remain level-headed and accept that if someone is in a better position to buy the property, perhaps it is not meant to be.

Be tough with yourself and move on. It is better to be financially secure than living in a home you can’t afford.

Your local branch of Whitegates can offer help and advice on the current position of the market in the area you are looking to buy in.

For more advice on buying your first property, contact your local office who will be happy to help.