Advice For First Time Buyers
If you are a first time buyer firstly, congratulations to you I guess you are so excited. However, as well as the excitement I presume there is a level of nerves or anxiety and I can totally understand why.
Hopefully by the time you have read this post some of those nerves will have disappeared.
Been in the industry me and the team speak to a lot of people who have never bought a house before and what astounds me is the lack of free, available content there is to point you in the right direction. It’s because of this I have decided to compose this article for you all.
Generally the estate agent who you agree to buy the house from should help, however I believe it would be more beneficial to you if you were aware of the process beforehand.
The first thing to consider is your budget, everyone when buying anything will generally have a budget and you need to know how much you can afford for your first house. The majority of first time buyers will require a mortgage to buy the property. If this is the case with you there are two options, both will identify how much you can borrow.
- Bank –I am guessing you have a bank account? You can approach your bank and ask for an appointment to see their mortgage advisor. The advisor will ask a few questions based on your personal circumstances, wages, financial commitments etc. From the information provided they will be able to explain how much they are willing to lend you.
- Mortgage Broker – You will be able to find a mortgage broker by asking any friends or family or simply type mortgage broker into Google. Although the mortgage broker will ask the same questions as the bank to establish your borrowing power they are not restricted to one lender. Therefore, they may find a lender who is willing to lend you more money because their criteria is different to your existing bank. Secondly, they may find a lender with a better interest rate, therefore making your monthly payments cheaper. Although a broker may charge a fee the amount they can save you per month may be more than the fee making the broker financially viable.
Once you have decided whether or not you are going to go direct to a bank or using a broker I suggest asking them to carry out a decision in principal. This is basically a procedure that will ask the respective lender whether or not they are willing to grant you a mortgage. This will involve a series of questions and may include a credit check to ensure they are happy with the conduct of your credit file. If there is a positive result you will be issued with an agreement in principal from the lender. This is basically proof you have been accepted for a mortgage in principal and evidence you can hand to the estate agent when making an offer. However, please understand this is not a guaranteed mortgage offer, hence the words ‘in principal’. Once you have found the house you desire and have had an offer accepted the bank or broker will convert your decision to a full application. Although you may be thinking I don’t know how much I need a mortgage for as I haven’t even found a property yet. I suggest still get the agreement done based on your borrowing power just in case you see the house of your dreams you are prepared. For example if you make an offer without the agreement the selling agent will not remove the property from the market until they have evidence of this document. Therefore you run this risk of losing the house to another party.
Another thing to consider is which solicitor you are going to employ. Any house purchase needs to be dealt with by a solicitor as they are there to protect you from a legal perspective. This is another piece of information which will be asked for by the estate agent selling the property. Again ask your friends and family for any recommendations and if you need further assistance just go on the internet. Choosing a solicitor is a lot more important than many people think, believe me. We speak to 000’s of solicitors a week, some good, some average and some terrible. One attribute of a good solicitor is their ability to communicate. We already know you are nervous about this so the last thing you need is a solicitor who fails to make themselves approachable or who are unable to communicate. Before deciding on a solicitor run a quick test, call three of them from your shortlist and see who returns your call first. If it takes one 24 hours to get back to you don’t bother with them as the chances are this response rate will continue throughout your relationship with them.
Hopefully this helps and good luck.