Find out which help is available
Research the first-time home buyers programs available to you and then read the fine print. The ones I know for saving for your first home are the Lifetime ISA and Help to Buy: ISA. Then you also have government schemes, the Help to Buy: Equity Loan where the government will pay 20% of your deposit which leaves you with only 5% to pay on your own and shared ownership. With the majority of government schemes there is always a catch – so always read the details.
For example, the reason why we didn’t go with the Help to Buy equity loan is that when you eventually sell your house you still owe the government 20% of the value of the property at the time of the repayment – so in other words if your house increases in value you owe them more money. Another reason we decided against this is that you have to buy a new build which we thought wasn’t the best value for money especially with our budget.
What I used
My fiance and I used the Help to Buy: ISA for about a year and a half before laying down a deposit. As we opened it early and before the backlash of Brexit we got 5% interest and received a bonus of £1581.35 free money from the government. To ensure you receive your bonus money you really need to make sure that you give your solicitor/conveyancer all of the details they require so that they can access the government portal. Do note that some companies do charge an additional fee for securing your bonus money so be sure to check. We didn’t pay for that service so you don’t have to either.
I download the best property finders apps
I didn’t use an estate agent for finding a home because the majority of homes are available online. You can even set up alerts for the areas and price points you want. Zoopla, Rightmove and PrimeLocation were my favourite apps for house hunting. Zoopla has some really good tools to check previous selling history, monthly running costs and local info. You have to be on them 24/7 so you get the best chance at arranging a viewing and bidding for it first – it’s very competitive so the good homes usually get snatched up straight away. I would also recommend subscribing to a few estate agent newsletters as they can sometimes post homes for sale via email first!
Buy in a cheaper area
So, of course, everyone wants to live in the city center. When buying our first home, we quickly realised this wasn’t the most feasible option. A friend told us that we may actually be better off at looking at somewhere like Castlewood Ranch for our new home. In fact, by looking at properties just on the border of our city, we realised that house prices reduced by at least 25%. We ended up buying a beautiful 3 bedroom detached house near the countryside in an enclosed estate and it’s only a 20-minute drive into the city. So it worked out well for us as we could never afford to buy the same type of home in the center of the city. However, if you live in a larger city it may cost more to commute each day, so I would recommend finding the cheapest areas available to you which still keep your travelling costs down. When checking for a nice area (which is also cheap) try calling the local police and ask them for their crime rates. I did this when moving, just to be sure where I was going to live was a safe place to stay. This was one of my most important factors to consider because our mortgage is a long-term commitment so liking the area is a must!
Set your budget
Budgeting is so important. I did a lot of reading about housing affordability and working out our max budget – this is a great list of fees that you’ll need to think about when buying. The one thing we did invest in is a mortgage advisor. I would advise anyone to do this as they will do all the hard work for you. I was hesitant when they stated that they could access ‘exclusive rates’ so I checked around all the banks to compare them with what we were offered and they managed to beat the banks customer rates every time.
Our mortgage advisor was one of our biggest costs which we ended up getting for free as the mortgage deal he got us, offered us £1,000 in cashback which covered our lifetime mortgage advisor fee. A lifetime fee which then covers the cost of having a mortgage advisor throughout our entire mortgage. This gives us peace of mind that every time we need to remortgage we can get access to those exclusive deals. I couldn’t recommend doing this more, it will save you so much money in the long term. If you’re interested in saving as much money as possible then you might want to also consider how to compare conveyancing quotes online to save moneythis helped me save money on my solicitor fees. As buying a house was new to me I had never considered hiring a solicitor so I feel like this tip is a must.
Key tips before applying for a mortgage
- Know your credit score. A mortgage lender is very unlikely to lend you any money if you don’t have a good credit score. This includes not having a credit score at all. Remember to pay your bills on time, all of the time, and even use a credit card to build up your rating. Find out how to get a credit card with no credit if you don’t have any credit and then you can start to improve your rating with small transactions.
- Use a mortgage calculator to know how much roughly you can borrow before applying
Multiply your annual income by three, that should be your top house-buying budget
- The bigger deposit the better rates you’ll receive
- Pay off any existing debt (excluding student loans)
I co-own the property
My fiance and I both purchased a home together and split the costs. This made it easier and our joint salaries meant we could afford more and halving the mortgage each month actually turns out to be less than renting. Also, the fact that we could put down a large deposit also opened up a wider choice of mortgages with better rates. I would definitely recommend co-owning a property recommend it even if it’s with a family member it’s definitely worth splitting those costs.
Are you thinking about buying your own place? Or have done so already… let me know in the comments!