Life moments: A basic guide to buying your first home
Buying your first house is a hugely exciting time, however it can be incredibly daunting as well. There’s a lot of decisions you’ve never been faced with before, numbers you haven’t had to deal with, and most probably some language you won’t understand.
Here at Big Yellow, we’re here to help you through life moments, big or small. Read on for some helpful tips that guide you on your way to purchasing your first home, and remember to check our Twitter page for more everyday tricks.
Money & what you can borrow
Recently, a comprehensive look at the mortgage market means a few changes have incurred. When you apply, the lender will cap the loan-to-income ratio at no more than four and a half times your income. They’ll also carry out an affordability assessment; this means they take into account various personal and living expenses as well as your income to assess what level of monthly payments you can afford.
There’s mortgage calculators available online that will help you get an idea of what you’d be able to afford and with what monthly payments.
It’s important to know that the deposit isn’t the only thing you’ll need to save up for, although it is the biggest cost. When budgeting, you’ll also need to think about:
• Mortgage arrangement fees – lenders may charge up to £2,000 to organise your mortgage, however these can sometimes be waived to entice you in
• Legal fees – you’ll need to appoint a solicitor to arrange the process of purchasing your property. Costs vary from firm to firm, and will range from a couple of hundred pounds to over £1,000
• Property survey – this can cost anywhere from £100 to over £1,000
• Stamp duty – a tiered tax that you’ll need to pay on any property costing over £125,000
• Land registry fees – depending on the value of the property, costs can range from £50 to £920
Stamp duty rates for first time buyers – Which.co.uk
The legal process of buying and selling is called conveyancing. Ideally, you would establish a relationship with a professional conveyancer before you start looking for a property, as this will avoid any last minute rushed decisions when you’re asked for their details when you put an offer on a property.
It’s crucial to get your new home surveyed, as it will point out any structural defects as well as tell you how much it’s worth.
Exchanging & completing
The buyer or the seller can pull out up until the contracts have been exchanged. Before signing anything, you should be 100% sure you want to go ahead.
The day of completion is the day you’ll be able to move into your new home. The estate agent is likely to have the keys for you to pick up, and your solicitor will arrange for money to be transferred to the seller’s solicitor.
Once you’ve completed, and got the keys in your hand, comes the most exciting part: making the house your own.
There may be some work you need to do – whether it be some structural work, or painting the rooms to a colour of your choice. If you’ve bought some furniture that you need keeping safe and clean while this work goes on, then Big Yellow will be happy to look after it for you.
If you find you’re struggling for ideas on how to make the most of the space you have, check out our ingenious storage solutions that will give you some great tips on how to get the best out of your home.
Photo credits: Christopher Furlong/Getty Images, ShlandServices.com, Tumblr.com