BUYING your first home is one of the most exciting times of your life…
…but it’s also a complicated process – and can often be pretty daunting, especially for those new to ‘the property game’.
We’ve put together a list of common mistakes – and how best to avoid them – to help guide inexperienced First Time Buyers onto the first rung of the ladder…
How’s your credit score?
Firstly, and most important of all, check your finances – including your credit rating.
Your credit score is a number that influences your chances of getting credit cards, loans and mortgages.
Generally speaking, the higher your score, the more ‘credit worthy’ you’ll be considered; if your score is low/your credit is poor and you run the risk of your mortgage application being rejected at the first hurdle.
A poor credit history isn’t the end of the world, however – at Leek United, we don’t rely on credit scores when assessing mortgage applications. Instead, we believe in treating all our customers as individuals, and look at their applications on a case-by-case basis.
An offer in principle
Before you even start viewing properties, get an ‘agreement in principle’ from your mortgage lender in place.
All lenders have different offer dates but at Leek United, our offers are valid for up to 28 days, and are essentially a statement showing how much you can borrow.
It’s not an official mortgage offer – but it will at least reassure estate agents and sellers that you’re a serious buyer, and can afford the properties you’re looking at!
Consider the downsides
The ‘chocolate box’ cottage might look picture-perfect in the estate agent’s ‘blurb’ – but that could be only part of the story…
You may think it’s okay to overlook signs of damp or ‘little’ structural issues – but you could be taking on a potentially expensive renovation project. Wherever possible, seek proper professional advice and guidance as to any likely ‘remedial’ costs that could be involved.
And how long has the property been on the market? That might be a clue to an underlying problem standing in the way of a sale. However, it might also serve as a ‘bargaining chip’ that may lead the sellers to accept a lower offer…
If you’re in any doubt, try to arrange for a reliable builder to walk round the property with you; an expert eye might well spot problems that you would otherwise miss.
In any event, be prepared to walk away from your ‘dream home’ if – no matter how much you love it – the pluses are outweighed by the minuses.
The value of a survey
The ‘price tag’/valuation is one thing – but it won’t reflect any of the sort of major problems we’ve already touched upon. That’s where a survey comes in.
There are various types of survey you can choose from, depending on the level of detail you want to go into and your available budget. But once complete, it should provide you with hard information on the condition of the building – and allow you to make a much more realistic decision.
Freehold vs. leasehold
Well…do YOU know the difference? Buy a freehold property, and you own the building along with the ground it stands on; with leasehold, you own the home – but not the ground, which you must lease from the freeholder, for which there is a ground rent charge to consider.
Before buying a property, it’s vital to know which of these categories it falls under.
Cost EVERYTHING out
Don’t forget…the ‘price tag’ on your new home is only part of the cost of buying; you need to also factor in everything from solicitors’ fees to removal costs. And once it’s yours, you’ll be responsible for all the costs of ongoing maintenance and repairs as well as the cost of running your home such as council tax, rates etc. – so setting aside a little money each month into a ‘contingency fund’ is always a good idea…
Download our free First Time Buyers Starter Pack, which includes information on typical costings for house-buying expenses, and much more, to give you a good understanding of everything you need to know when you’re buying your first house. Visit: here to download your copy.
There’s a lot to think about on the path to becoming a first time homeowner – but it’s worth it. Try to avoid these common mistakes and you’ll hopefully be better prepared to get your first mortgage!
NB. This article is intended as a summary only and does not constitute legal or financial advice from Leek United Building Society. We recommend that you seek independent legal and/or financial advice if you have any questions or queries.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE
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