First Time Buyer?
Home Buyers’ Guide Liverpool
Buying a house can be a stressful experience, especially if you’re a first-time buyer. That’s why we’ve put together a guide to better prepare you for your first home purchase and to make the experience easier and more pleasant.
Understanding the process of buying a home can help you improve your chances of becoming a homeowner and can eliminate surprises that may pop up along the way.
Before getting started, you should consider the following:
1. Save for a deposit
The good news is that as a first-time buyer, there are schemes that can help you climb the property ladder with lower deposits. This means that you’d need to have at least a 5% deposit for any property you want to purchase and take out a mortgage for the remainder of the purchase price.
For example, if you are buying a home that costs £100,000 with a 95% loan to value mortgage, you need to have a deposit of £5000 and the value of your mortgage debt will be £95,000.
However, if you are able to save more than 5% you may be able to benefit from lower interest rates when you apply for your mortgage.
2. Find out how much you can borrow and apply for a mortgage agreement in principle
The next step would be to find out how much you can borrow from lenders. This will be determined by your income, credit score and deposit amount.
Once you have an idea of how much you can borrow, you can then apply for a mortgage agreement in principle (also known as a decision in principle). A mortgage agreement in principle issued by a lender states that they would, in principle, lend you a certain amount, and this can make you more attractive as a buyer.
At this stage you should also decide what type of mortgage you want to get; whether it be fixed, variable, tracker rates etc. You should consider the pros and cons of each and choose one that makes the most sense for you and your situation. You can simply save time by doing your research in advance so when it’s time to apply for your mortgage, you know exactly what type of mortgage you want to get.
3. Consider other costs of buying a home
- Stamp Duty
This is the tax you usually pay when you buy a property or land, and the rate depends on where in the UK you are making the purchase. Luckily for first-time buyers looking to purchase a property in England the threshold is currently set at £300,000. Meaning that there’s no stamp duty for first-time buyers for the first £300,000 of a main residential property (if the property costs £500,000 or less), although this is subject to change at any time, and you’re advised to check out gov.uk for more information and updates.
- Freehold vs Leasehold
Depending on the type of property you’re buying you may either be buying the freehold or the leasehold. Most houses are freehold (but you should always double check this) and when you purchase a freehold property, you are buying the house and the land that it sits on. When you purchase a flat, you buy the leasehold, meaning you’re buying into a share of the freehold. There are other costs associated with leasehold properties such as Ground Rent and Service Charge. You should always ask for the amount of these charges to calculate whether or not you can afford the property you want to purchase.
- Surveys
Surveys can help you avoid unexpected repair costs and give you a better understanding of how much you may need to invest in the property you’re buying. However, surveys come at a cost and there are difference levels of surveys you can choose from based on the age and condition of the property you’re looking to purchase.
- Mortgage and Valuations
As part of your mortgage application, the lender will ask for a mortgage valuation to make sure you’re not over-borrowing. The cost of the valuation may vary depending on the value and size of the property. Some lenders may offer free valuation surveys but you’ll need to check this with your mortgage provider.
- Building Insurance
As part of the condition of your mortgage, you will also need to get building insurance. Building insurance will cover the cost of any repairs or damages to your home.
- Solicitor/Conveyancer
Solicitors/conveyancers often have different methods of charging for their services, such as an hourly rate or a fixed fee. We recommend that you shop around and ensure that the quotes you receive include VAT and a breakdown of all costs so there aren’t any surprise charges down the line.
- Removal and Moving-in
The price of removal and moving in varies wildly depending on the size of your property and the type of service you require. If you prefer to hire professional packers, you’d be looking at an average cost of £1200. However, if you manage to pack and move everything yourself, you can save a lot of that cost.
- Furnishing and Decorating
This will all come down to your budget and taste, and whether or not you already have furniture. Although you can save a lot of money by buying second-hand furniture that are in good condition.
- Other things to consider
You should also research any neighbourhoods that you’re interested in. If you have children, you can scout the schools in your selected neighbourhoods to ensure they meet your requirements.
You can get in touch with the local estate agents in your chosen area to help with your search. This should be of no cost to you.
Select properties that meet your budget and request a viewing. During your viewing, ensure you ask the right questions in order to gather enough information to help you make an informed decision. Examine the condition of the house and look for any red flags that may be a cause for concern such as noise, leaks, cracks etc.
And don’t forget to have fun in the process.
If you are a first-time buyer in Liverpool looking for a Liverpool Estate Agency, Lavelle Estates can help you find your first home.
Lavelle Estates is one of the fastest growing online estate agencies in the North-West UK and has also become one of the best estate agencies in Liverpool.
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You can contact us at 0151 372 2033 or visit our branch for more information.
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