Tips for buying your first home

Tips for Buying Your First Home: Guide for First-Time Buyers

Buying a home is a significant milestone in life, and it can be both exciting and intimidating for first-time buyers. There’s a lot to know and consider, and the process of buying a home can seem overwhelming. This guide will provide tips and advice to help first-time buyers navigate home-buying, from financing to making an offer and beyond.

Buying a home can be an exciting and rewarding experience for first-time buyers, allowing them to build equity, gain stability, and increase their net worth. Furthermore, on many occasions buying a home and paying a mortgage can be cheaper than renting.

Home-buying can be broken down into four steps: financing, finding the right home, making an offer, and moving in. Understanding each step is essential for first-time buyers to make wise decisions.

Step 1: Financing

The first step in the home-buying process is financing. There are several options for financing your first home, including taking out a mortgage or using savings. In addition, checking your credit score and correcting any errors before applying for a loan is essential. When discussing mortgages, people might mention ‘Loan to Value’ or LTV. LTV is the amount you borrow to buy your home (the loan) compared with the valuation of the property. 

For example, if you buy a home for £250,000, put down £30,000 as a deposit and have a mortgage of £220,000 – your LTV is 88%. The lower the LTV, the lower your interest rate is likely to be, which is because the lender takes less risk with a smaller loan. 

When considering a mortgage, it’s essential to understand the different types of loans available, such as fixed-rate or adjustable-rate mortgages. When shopping for a mortgage, it’s also important to speak to an independent mortgage broker who will compare lenders and their loan terms, including interest rates and fees. You may be eligible for schemes such as the Scottish Government’s Low-cost Initiative for First Time Buyers (LIFT) scheme, and your broker can assist you with information about this process. In addition, a mortgage broker will help you get an AIP (principle agreement). An Agreement in Principle (AIP) is the first step to getting a mortgage. While it is not technically legally required for an offer on a property to be valid, sellers will generally only take it seriously if you have proof that you can borrow the necessary funds to pay for the property.

In addition to your mortgage, there are other costs when buying s home, which include:

  • Solicitor or conveyancer fees (this often includes extra costs, such as search and Land Registry fees)
  • Land and Buildings Transaction Tax in Scotland (Stamp duty in England, or Land Transaction Tax in Wales). LBTT is payable when you buy or lease a building or land over a certain price – listed here.
  • Mortgage arrangement fees
  • Removal and moving-in costs
  • Buildings insurance
  • Life insurance against your mortgage
  • Initial furnishing and decorating costs

Step 2: Finding the Right Home

Once you’ve secured financing, you can search for your dream home. Researching the housing market is an essential first step in this process, as it will provide insight into current market trends and pricing. Once you understand the market, you can search for your ideal home. Considerations for location, size, and amenities should all factor into your decision. It’s also important to set a budget and stick to it to ensure you can comfortably afford your home. Working with a real estate agent can make the search easier and more efficient. Also, check out our guide on looking for flats and houses for sale in West Lothian here.

Step 3: Making an Offer

Once you’ve identified a potential property, it’s time to make an offer. Understanding the basics of negotiation is critical to making an attractive offer that the seller will accept. The offer should include information such as purchase price, contingencies (such as inspections or financing), closing costs, and other important details to both parties. Speak to your estate agent and ask for advice. A good estate agent is, first and foremost, a professional who will support both their buyers and sellers throughout the process, and it is always good advice to ask! It’s also essential to make a competitive offer that reflects current market prices, as well as reflect the home inspection value and what you can afford for a mortgage and your deposit.

Step 4: Moving In

Once the seller has accepted your offer, it’s time to move in! The closing process should be thoroughly understood before signing any documents. During this process, you’ll need to pay closing costs and other fees associated with purchasing your home, such as your legal fees. You should also be aware of unexpected expenses arising during the move-in process. Utilising online resources can make the transition into homeownership smoother and more efficient.

Buying your first home is a major milestone in life, and understanding each step of the process is essential for first-time buyers. Buying a house is a big decision with many things to remember, but it is also one of the most rewarding events in your life. So, remember to celebrate and take lots of photographs!


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