Buying your first home can feel both exciting and a little bit overwhelming, but if you take one step at a time, you’ll find things aren’t as scary as they seem.
Find out what you can afford
There’s nothing wrong with looking at a six bedroom house with its own pool, walk-in wardrobe and ensuite bathroom. However, before you start dreaming about the pool parties you’re going to have, you’ll need to figure out your affordability.
In the past it was a general rule of thumb that you were able to borrow around four times as much as your gross income. However, lenders have now introduced a stress testing method to evaluate your whole financial circumstance. If you want an accurate idea of your affordability, it may be worth speaking to a mortgage broker who’ll crunch your numbers and work out how much you’ll be able to borrow and how much you’ll need to save.
Save, save, save!
It’s a difficult bridge to cross, but you’ll need to start being a bit savvy and stricter with your spending so you can start to build up a big enough deposit.
The minimum deposit you’ll need is 5% of the overall price of the house, so if you were buying a $200,000 house, you’d need to save $10,000. However, it’s better to save as much deposit as you can as this can open the doors to better mortgage rates. Here we give you our top tips on Savings Guide.
Find your home
When looking for your perfect home it’s important that you think about what factors are most important to you. For example, is it the building itself, the location or having three bedrooms?
With online real estate property websites, it’s easier than ever to browse in your price range, location and save your favourites into your own account. However, it’s important when you’re looking to keep an open mind and be prepared to budge on a few of your ideals, as houses can look very different in person to how they look online.
Once you’ve found a few houses you like, it’s recommended to get a pre-approval before you start house viewings. Buying your first home is a lengthy process and it can feel very disheartening if you lose the house you love because you aren’t able to put a quick enough offer in. Luckily, we know a broker or two who you can get in touch with if you need some help.
We don’t want to be the ones to break it to you, but while the house viewing stage may seem like the most exciting step of buying a house, it’s arguably one of the hardest stages.
It’s so easy to let your emotions run away with you when looking at houses and it’s so easy to fall in love with the way someone has decorated their home and staged it, rather than thinking about the practicalities e.g. the amount of space, the location etc.
Put in an offer
Once you’ve found your dream home, it’s time to put an offer in.
Don’t be afraid to try and negotiate a lower price - remember it's better to start on a lower offer and work your way up, as long as you stick to what you can afford.
Apply for your mortgage
If they accept your offer, the real estate agent will send over your confirmation letter and you can formally apply for your mortgage.
If you want to make the mortgage process hassle-free, or you’re worried about your circumstances affecting the likelihood of your application being approved, you may want to get in touch and we’ll be more than happy to help you.
Surveys and conveyancing
After you’ve applied for your mortgage and the vendor has accepted your offer, the solicitors, valuations and conveyancing can start to happen.
Your mortgage lender will send out a surveyor of their choosing to do the valuation to find out the value of the house. But you’ll need to find your own solicitor or conveyancer, whether it’s through a recommendation or one you find online. Your solicitor will act as an intermediary between you, your lender and the seller of the property, so be sure to check their level of experience to ensure things run smoothly.
You will also need to ensure you take out buildings insurance after the lender’s surveyor has surveyed the house, as all lenders require this before the final stage of completing your mortgage.
The final hurdle
By this point, both you, your solicitors, your lender and the seller should be happy with the contract, price and the results of the surveys and are all ready to sign.
You’ll then need to consider what insurances you’ll need to apply for. For example, contents insurance or possibly life insurance to help protect yourself in case of unexpected events.
You’re ready to move!
It’s time to pack up and move into your first house, the house you actually own - congratulations!
If you have any further questions about the whole house buying process, please don't hesitate to get in touch with us. Our team of mortgage brokers can offer their support and guidance to you throughout the whole mortgage process.