It’s completely normal if the thought of buying your first home fills you with equal parts excitement and terror. Especially with the current price hikes. If you’re based in Manchester you might feel pressured to get on the property ladder before prices continue to rise further. Getting a mortgage is a serious commitment, and buying property is often rife with unforeseen costs, no matter how carefully you plan. But the rewards of owning your own place can make it all worthwhile. In this short but decisive article, we’ll take you through the key questions you need to ask yourself when considering becoming a first-time homebuyer.
For obvious reasons, it’s better if your property increases, rather than decreases, in value after you’ve bought it. Unfortunately, the market can be hard to predict: at a national level, prices are climbing again after the recession, but the local picture can be very different. For example, Manchester prices have increased by 6% between August 2016 and 2017 according to data collected by home.co.uk.
Ideally, you should try to buy at a time when prices are low but showing signs of rising. Our local property experts have a wealth of knowledge and can point you in the right direction on whats happening in your area of choice.
Mortgage providers require proof of your income to decide whether and how much to lend to you. Some lenders will only give mortgages to people in permanent jobs, so if you’re self-employed or on a fixed-term contract, getting a mortgage may be more difficult. Lenders will also base how much they can lend you based on how much you earn. This can be up to 5x your salary.
A good credit history is key to a successful mortgage application. This can be a problem if you’ve never taken out any credit. One step that everyone should take is registering on the electoral roll. For more information on credit ratings and what they could mean for your mortgage application click here.
When we surveyed 1,990 recent home movers in 2015, we found that a third of first-time buyers had to save up for more than three years to buy and just over half needed help from family.
You’ll have access to better mortgage deals, and be more financially secure if you can save up a decent-sized deposit. Help to Buy Isas are specifically designed for first-time buyers, and saving in one entitles you to a 25% government bonus on your savings (up to a maximum of £3,000) when you buy your first home.
If saving up a big deposit seems like a distant dream, schemes such as the Help to Buy equity loan and Help to Buy mortgage guarantee could enable you to buy a property with a deposit of as little as 5%.
The numbers involved with buying a house are so big it can be hard to understand what they’ll actually mean for your everyday finances. When you’re looking at mortgages, work out what your monthly repayments will be – and how they’d change if interest rates went up.
Planning a budget carefully will allow you to work out how much you can afford to spend on mortgage repayments each month so you can be confident you can afford them, both now and in the future.
If you’ve been renting from a decent landlord, you won’t have had to worry about the costs of major repairs and maintaining appliances. But when you own your own home, all this will be your responsibility, and it’s important to set money aside for unforeseen costs such as repairing a leaky roof. If you’re moving away for the first time you might be surprised to find the cost of things like electricity, gas, and internet really add up. Budgeting is a big part of making sure you can afford the monthly bills and shouldn’t be taken likely. Luckily going through a mortgage advisor can help you best work out your typical monthly costings and whether the costs of livings are something you can currently afford.
Your mortgage deposit is just the start: buying a house or flat is extremely expensive. You’ll need to factor in stamp duty and survey fees, among other things.
If you are still not sure on whether or not you’re in a situation to start your property journey why not get in contact with one of our mortgage experts? We’ve been helping first-time buyers successfully purchase their first homes for over 30 years in Manchester & Stockport. If you’d like to book a free appointment give our team a call on 0161 443 4548 today.