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A first-time buyers’ guide to purchasing

A first-time buyers’ guide to purchasing

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Buying a property for the first time comes with all sorts of unknowns and can be hugely stressful if you’re struggling to get answers to any questions that you might have. We Buy Any House know how hard it can be, so have put together some important things that first-time buyers need to know about the process to make things much simpler!

How much do I need for my deposit?

When wanting to buy a house, you will need to save up your deposit which is usually between 5-20% of the property value. The amount that you’ll need for your deposit will vary massively depending on the area that you want to buy in, the style of property, and the condition it’s in, along with other things.

Doing some research into the prices of houses that you’re interested in will let you work out how much you will need to be able to put a deposit down on one similar. The more that you’ve got for your deposit, the better, as it’s extra security for your lender and will make you much more attractive to them.

How much can I borrow?

A huge amount of first-time buyers aren’t aware that there is a maximum that they can borrow, as they will need to pass various affordability checks that show that they can keep up with the mortgage repayments. While having a higher deposit is beneficial, lenders will generally only approve you for a mortgage that’s 4-5x your annual income, so it’s important to keep this in mind when you start looking to buy.

Knowing what amount you’ll likely to be approved for will make sure that you’re only putting in applications that are worth it – applying for a mortgage that’s over 10x your annual income will result in an almost immediate rejection, and a negative application can hang around on your credit file and can cause issues when you apply in the future.

What could result in my application being denied?

There are all sorts of reasons that mortgage lenders can deny your application, including –

Having a poor credit history:

 Lenders will always run a variety of credit checks on applicants to check their financial history to confirm if there are any issues that could result in you paying the mortgage back. If you know that your credit score is low, spend some time before you apply for a mortgage building it. From paying off any of your existing debt to making sure that your registered address is correct, it can make a big difference to your credit score and help you get your approval.

Being in debt:

Applying for a mortgage means that you’re applying for a very big loan that you’re committing to pay off over several years, and so if you’re already in some debt, this will act as a big red flag for mortgage lenders. Paying off your debt before you move forward with your application will make a difference and will increase the chances that your lender approves you.

Your income is too low:

Your lender will typically only approve a mortgage that’s 4-5x your income, so if you’re applying for something that’s higher than that, you’ll most likely be rejected. If you’re determined to buy a property that’s more expensive, you can wait until your income increases or look at buying with someone else, as this will give you a joint income and drastically boost the amount that you can be approved for. 

Having a small deposit:

 If you’ve applied for a mortgage without saving up the correct amount that you need, you’ll be rejected. Always make sure that you’ve saved up a minimum of 5% of the value that you’re applying for – but the more, the better, so aiming for 10% or upwards is a good way to increase your chances of approval. 

How long does it take to get approved?

It can take 2-6 weeks to receive approval from your lender, but there can also be various delays that extend that date. Buying a house is a slower process than a lot of people realise, and there are all sorts of normal delays that you’ll likely face – but if you don’t know about them, it can increase the stress and make it much harder. With a mortgage application taking around a month, a seller to accept an offer as much as 20 weeks, and the conveyancing process taking between 4-12 weeks, you will need to be patient.

How do I make an offer?

Most of the time, when you find a house that you want to buy, you’ll view it plenty of times to confirm that it’s exactly what you want, and then once you’ve got your mortgage approval, you can put an offer in. You can offer under the asking price, then the agent will contact the seller and see if they are happy to accept, letting you know what their decision is.

Putting in a lower offer on homes that have very little interest will mean that you’re more likely to be accepted by your seller, but if there are several other buyers interested, you might end up needing to put in a higher offer to make sure that you don’t lose the house to another buyer. Make sure that you stress that you’re a chain-free buyer as well, as this will make you a more attractive option and encourage the seller to accept your offer – especially if they’ve been struggling to generate interest or have been asking themselves “how can I sell my house fast?”.

Do I need to pay for a home survey?

A lot of buyers will often question if they really need to have a survey done as they can be pricey, but they are incredibly important and should always be factored into your budget. You want to know that the house is exactly as you expect inside and out, so you don’t find any nasty surprises once you move in. A survey will reveal any issues that you can’t see, like subsidence or damp; problems that aren’t cheap to fix.

While a survey might seem expensive, it will make sure that there are no problems that could catch you out down the line that you don’t know about – and if there are issues revealed, it means you can either walk away and look at buying elsewhere, or lower your offer accordingly to factor in any repairs that need doing once you’ve successfully bought the place.

Buying your first home should be a very exciting time, and making sure that you’re completely prepared will make the process much easier, reducing risks and helping you step onto the property ladder faster.

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