For many who are looking to buy their first home, actually becoming a homeowner remains out of reach due to an inability to raise the often high deposit that many lenders require. However, the good news is that lending criteria are finally becoming easier to meet. An increasing number of lenders are now offering 95% loan-to-value mortgages, where the buyer is only required to put down a deposit totalling 5% of the actual value of the property. However, in order to get the best deals, it’s always worth trying to save for a more sizable deposit wherever possible. We’ve put together this guide to the costs of buying your first home to help you make the best plans.
Planning and Saving for a Deposit
Getting a deposit that’s a sufficient size together may be hard work, but it is definitely worth it as being able to put down a sizeable sum in cash as a deposit comes with a range of advantages and benefits. One of these benefits includes a better range of mortgage products which will be available to you. For example, one mortgage product you can now apply for is a bad credit mortgage, which is ideal if your credit history isn’t the best. If you don’t have the time to put down a large deposit and want to buy your first home as soon as possible, it may be worth lending some money along with saving in order to increase the amount that you have.
Additional Costs
When buying your first home, don’t forget to take into consideration all of the additional coststhat you will be required to pay. For example, you will have to pay stamp duty, which is required on all property purchased for £125,000 or more, and there will also be mortgage fees arranged by your lender to consider. Along with that, you will need to ensure that you have accounted for any legal fees, charges for surveying the home and fees for registering your new ownership. Don’t forget that in a lot of cases, new owners will also need to budget for redecorating and furnishing their new home, too.
Finding the Best Deals
When you’re planning to buy your first home, it’s important to make sure that you don’t jump in head first and end up paying more money than is necessary. Carrying out ample research beforehand can certainly pay off in the future and help you to make some significant savings. It’s absolutely crucial that you fully investigate the mortgage market and weigh up your options before making a decision about buying a home. For first time buyers, it’s also a good idea to talk to your family members, as many lenders offer products which are aimed at people who have parents or grandparents that want to offer financial help to them for buying their first home. These include guarantor mortgages or even joint mortgages which may be easier to get depending on your circumstances.
Buying your first home is a very exciting, yet also hugely expensive experience. Understanding the cost of buying a home and how to keep it as low as possible will make sure that you don’t lose out.