First time buyers – dos and don’ts

Being a first time buyer in the current economic climate can be a daunting and stressful experience. First time buyers have been hit by many different problems over recent years, making it increasingly difficult to get onto the property ladder and reducing access to properties.

As a first time buyer in this day and age you need to be well organised, and you need to make sure that you do your research so that everything goes as smoothly as possible. Finding the right property can be difficult enough, but on top of this you will be taking on what is probably the biggest and most important financial commitment of your life, so you need to make sure that you get the process right from start to finish.

As a first time buyer advice and tips can prove invaluable. By bearing in mind some simple guidelines when it comes to purchasing a home for the first time you may be able to make the process far easier for yourself, avoiding many of the pitfalls that are often associated with buying for the first time.

Below are some basic dos and don’t that could help to make the whole process simpler as a first time buyer.

Dos

• Do make sure that you know what you want. Always make sure that you thoroughly research the mortgage market in order to determine which mortgage may prove most suitable for you. You will find a wide range of mortgages on the market these days, and you will find that some mortgage types are better suited than others based on your needs and your pocket.

• Do take the right financial advice. If you are planning to take financial advice from an independent financial advisor do opt for one that takes payment from you as the client rather than from the lender that he or she recommends. This way you can be sure that you are received totally unbiased advice that is in your best interests, rather than worrying that the adviser may have steered you in the direction of the mortgage or lender that pays the best commission.

• Do make an application for a mortgage before you start hunting for a home, as otherwise you may end up wasting your time looking at houses that you cannot afford, as you may find that you cannot get the mortgage that you need. If you get a decision in principle on a mortgage in advance, you know exactly what price range to look in when it comes to house hunting, and you will be at an advantage, as most vendors prefer to consider someone who has already been approved for a principle for a mortgage.

• Do your calculations. Before you apply for a mortgage make sure that you calculate your total income and outgoings each month, including any bills, insurance premiums, regular outgoings, and spending money. You need to ensure that you have enough left over to comfortably afford the mortgage repayments, and enough flexibility to be able to cope with any rises in repayments.

Don’ts

• Don’t overstretch yourself financially, as you will find that just a couple of missed mortgage repayments could result in you ending up in court, and you could quickly end up losing your home altogether if you are unable to keep up with repayments. Always make sure that you can afford the repayments.

• Don’t be tempted to go for the first quote that you receive, which is a mistake that many people make in their rush to get a mortgage and get onto the property ladder. Instead, take your time and get at least several quotes from different lenders so that you can go for the one that offers the best value for money.

• Don’t fall for seemingly unbeatable interest rate offers without checking the small print. Some lenders offer fabulous APRs on their mortgage loans, but make up for them by charging extortionate arrangement fees.

• Don’t assume that you will be better off with a 100% mortgage. Although many lenders offer these no deposit mortgages to first time buyers, you should remember that by taking one of these you will have to make higher monthly repayments, pay far more interest over the term of the loan, and are at increased risk of getting tied into negative equity, particularly given that house prices have been falling over the last few months.

• Don’t rush into anything. Buying a property is a huge thing for most people, and taking on a mortgage is one of the largest financial commitments you will ever face. Rushing into this could mean that you end up with the wrong mortgage, pay way over the odds, or end up being unable to keep up with repayments thus losing your home. Take your time, do your research, and get as much financial advice as you need before you commit.