First time buyer in 6 Steps

step 1: before you start

In order to make the process of becoming a first time buyer easier, it’s best to plan ahead carefully.  Firstly, work out the costs involved.  Remember that you will require a 5% deposit or more plus there’s stamp duty, legal fees and lenders’ fees, removal costs and possibly new furniture and fittings costs. 

In order to prepare for the inevitable expense, aim to reduce your outgoings now and try to save for a deposit.  Also try to maintain a good credit rating, as this will help with lenders’ decisions about whether to lend to you.  For a free credit check, click here.  This is a good stage to consider approaching a mortgage adviser for expert advice about the amount of deposit required and any hidden costs involved, so that you know exactly what you are committing to from the outset.

step 2: what can you afford?

Budgeting for your first home and mortgage can be tricky business.  By knowing how much free income you have each month after your normal outgoings – excluding rent – you can judge how much you can afford to pay for your mortgage.   As a first time buyer, being aware of your price ceiling will help narrow the vast search with an estate agent or website to a more manageable one.    

There are a thousands of different first time buyer mortgages available in the UK and knowing which one to choose can seem daunting.  Do some research in order to have a clearer understanding of the basics and then approach a reputable mortgage broker for expert advice.  Advice, as instructed by the Financial Services Authority (FSA) which governs the mortgage industry, should be clear at all times so do not be afraid to ask for further explanation if you do not understand.  Always check that your adviser is regulated by the FSA and look for a whole of the market broker that does not charge a broker fee for advice.  It’s a good idea at this stage to not only decide upon the type of mortgage that you might like, but also to get an agreement in principle from a lender. 

step 3:  finding a property

Now that you know the property range you can afford, draw up a list of requirements for your ideal home, separating desirable features and essentials.   Never before has the term ‘location, location, location’ been of greater importance, so spend an equal amount of time reflecting on where exactly you wish to buy, within the limits of your budget. 

Contact local estate agents and look around as many properties and through as many local newspapers as possible, in order to compare prices and obtain an even better idea of what you require.  It’s a good idea to locate a solicitor at this stage to speed things up further down the line.
    
When choosing a home, it’s worth bearing in mind whether to consider buying a new property or old one.  Remember that buying an old property may result in incurring more expense than an newer one because, for example, you may require more extensive structural surveys for peace of mind.  

step 4: the offer

When you have found the perfect property make sure that you find out as much as possible from the estate agent, such as which fittings are included in the sale.  Often the estate agent is on the side of the seller, so you will need to protect your interests.  However, do not be afraid to address your solicitor with any queries.  It’s also worth discussing offers with your solicitor before making one.  Make sure you do not negotiate beyond the maximum limit that you set at the start.
 
When making the offer, emphasise your positive points.  As a first time buyer, you are not tied to selling a current property which means that you are not part of a frustrating chain.  If you also have already organised an agreement in principle from a lender, as suggested in step 2, then this will stand you in an even more positive light.
 
step 5: the legal work

Your solicitor will play an important role in the conveyance.  In order for the legal process to commence, make sure that you understand the contract and are happy with all the areas covered.  Now is the time to finalise your mortgage arrangements and compare quotes in order to choose the best insurance for your home and its contents, plus organise a survey on the house.  If buying a new build, a full survey may not be necessary but on an older property it is usually advisable. 

step 6: contract exchange and completion

The title of being a ‘first time buyer’ is almost behind you as completion is in sight.  You will receive a copy of the contract to sign.  Once signed, your solicitor will exchange it with the seller’s solicitor.  The exchange means that you are both legally committed and once your deposit has been transferred and all other outstanding monies received by the seller, you will be the new owner of the property. You are now liable for the property’s building insurance (which is why you are advised to see to this in step 5.)
 
On the day of completion, the solicitor transfers payment from your lender to the seller.  You should receive the keys to the property and your solicitor will register you as the owner, plus complete a tax return to pay Stamp Duty. 

You now own your new home!

See also:
Contact us for free first time buyer advice
First time buyer mortgages in the UK
Free guide to first time buyer mortgages
Getting a mortgage with a friend
How to become a first time buyer