First-time property buyer? Here’s what you need to know
As property is most likely the most expensive thing you will ever buy, there are one or two things you should know about before you jump on the property mortgage ladder for the very first time.
Saving for your deposit
There is no denying that buying property is expensive. Before you will even be accepted for a property mortgage, the banks will want you to pay a deposit on the house. You will usually need to pay between 5% and 20% of the cost of the house you are buying.
However, paying higher deposit percentages can often result in a cheaper mortgage repayment rate.
Can you pay back the mortgage?
A mortgage is essentially a loan which is tied to the property you are buying, so you need to make sure you will be able to afford the monthly repayments.
Banks are now legally required to check that you can afford the repayments, being allowed to offer loans up to 4.5 times your salary (including combined salaries if you are buying with a partner).
Did we mention that buying a property isn’t cheap? There are costs throughout all stages of buying a property, including insurance, removal fees, furniture and decorations, solicitors’ fees, stamp duty, etc.
You will need to include these costs when calculating how much you can afford to spend on a property.
Finding the right mortgage
The amount of money a bank is willing to lend you is directly related to how much you can spend on a property, so it is in your best interest to find the right mortgage lender with the right type of mortgage.
Once you know how much a lender is willing to lend, you can start searching for properties in that price range and make an offer on the one you want to buy.
Check out our mortgages page to read about the different types of mortgages in more detail. You can also get in touch with us to speak to a specialist consultant who can help you find the best mortgage deal.
Finding a conveyancer/solicitor
There is a lot of legal work involved in buying and selling property, work which most people do not understand.
That’s why it is essential to hire a property conveyancer to handle all of the legal matters for you. They will sort out all the important paperwork and communicate with the conveyancer and estate agent of the party you are buying the property from.
If you want advice on finding the right conveyancer for you, click here for more information, or get in touch to speak to one of Oracle’s specialist consultants.