First time buyer guide

• Before you start house hunting, it’s a good idea to make a list of what’s essential to you. This will help you and your estate agent narrow down the search and it will save you time.

• Look at as many properties as possible to compare prices.

• It’s always a good idea to have a second viewing at a different time on another day.

• If you’d like some free advice and help with your search, Peter Alan – Principality’s estate agency – is a great place to start. With more than 30 years’ experience, they have expert knowledge of the property market in South Wales.

The amount you can borrow will depend on your individual circumstances, monthly income and monthly outgoings.

It will also depend on the value or purchase price of the property you want to mortgage, in relation to the amount you want to borrow. This is called the loan to value (LTV) and is shown as a percentage.

As a responsible lender, we will lend you what you can afford rather than just multiplying your income.

Our quick and easy mortgage calculator will help you work out how much you can borrow. It will also tell you what your monthly repayments would be for each mortgage product.

Most mortgages will need you to put down a minimum of 15 – 25% of the property’s value as a deposit. Principality has a comprehensive range of mortgages great for first time buyers, with varying deposit amounts and rates. We’ve also got great savings products to help you save up for your deposit.

Buying a mortgage is one of life’s biggest purchases, so it’s obviously important that you choose a reputable mortgage provider.

Why choose Principality?

• We are the 7th largest building society in the UK
• We’ve been in business for over 150 years
• We have 52 branches and 13 agency counters
• We have over 500,000 customers
• Recent research has shown that we are the most trusted and friendliest out of the banks and building societies on the Welsh high street
• And, we are here to help ensure buying your first home goes as smoothly as possible!

Principality offer a comprehensive and competitive range of mortgage products suited to first time buyers.

Before you choose your mortgage product, it’s worth considering how you might want to repay it and what sort of mortgage might suit your finances.

There are a lot of different sorts of mortgages available, but choosing your mortgage needn’t be daunting. Our Types of Mortgages Guide can tell you about some of the options available, so you can decide which might suit you best.

An agreement in principle tells you the amount a mortgage provider might be prepared to lend you.

You can get an agreement in principle online, or by contacting us or your local branch before you even decide which mortgage might be best for you and without making an application. 

Careful budgeting will help you plan ahead and ensure you have enough money for all those costs involved in buying your own home. So it’s a good idea to make yourself a personal budget planner with a list of the expenses you expect to have.

As well as needing to pay a deposit on your new home, the costs you are likely to have to pay include legal fees, surveyor’s fees, mortgage fees, Stamp Duty Land Tax and moving costs.

Our Fee Saver mortgages have no Product fee and no valuation fee.

If you don’t want to choose a Fee Saver mortgage, it’s important to budget for fees:

• Mortgage Commitment Fee

Some popular mortgage products require a Mortgage Commitment Fee, which is charged when you apply for the mortgage and refunded on completion. This is typically around £99.

• Product fee

Some mortgages require a Product fee, typically £499 or £999. This can usually be added to your total loan amount and repaid over the term of your mortgage.

• Valuation fee

The fee you pay will depend on the valuation or survey you choose and the value of your property. Typically, it can vary from £300 to £1,200. See our step later in this guide on choosing a survey, for more help.

• Legal fee

You will need to pay fees to your solicitor or conveyancer, as well as the cost of any land registration or search fees (these are included in the disbursements). Typically, you should budget around £700.

Remember to budget for the Stamp Duty Land Tax you will need to pay. Visit HM Revenue and Customs to see how much is due on your property purchase.

Once you’ve found your dream home, and your offer’s accepted, the estate agent will mark the house as ‘Sold – subject to contract’. This is when you should make your mortgage application.

Applying for a Principality mortgage is quick and easy – you can apply for most of our mortgages online, or if you prefer, speak to one of our friendly mortgage advisers on 0845 045 0006 or visit your local branch.

We aim to make you a formal mortgage offer within 10 – 15 days of receiving your full application. You’ll receive a copy of our offer by post, with another copy going to your solicitor or conveyancer.

When your offer is accepted, you should instruct a solicitor or licensed conveyancer to handle the legal side of your purchase.

Principality’s eConveyancer provides you with a quick and hassle-free way of finding a conveyancer. It’s an award-winning* online conveyancing referral service provided by United Legal Services Ltd that gives you an instant quote and it means you can track your case online 24/7.

What’s more, you won’t pay any fee (apart from disbursements such as searches) if for any reason your sale, purchase or remortgage doesn’t go ahead!

Take a look at Principality eConveyancer to sort your conveyancing the easy way.

You don’t have to wait until you find a property before choosing a solicitor  - it will save you time when you find somewhere if you already know who you are going to use.

* Awards won by United Legal Services for eConveyancer include Winner of Mortgage Strategy Awards 2011 for Best Conveyancer; Winner of Moneyfacts Awards 2010 for Best HIP Provider; and Winner of The British Mortgage Awards 2010.

Buying a property can be expensive, so it’s crucial that you discover all you can about the property before making a legal commitment. Principality Surveyors [Link to Surveys and Valuations landing page] offer a wide range of valuation and surveying services to help you.

Mortgage Valuation
Your lender will arrange a report for mortgage purposes. This is a limited review of the property carried out to help the lender decide whether or not to lend to you. The cost of your valuation depends on the property value.

Homebuyer Survey
The mortgage valuation is not a survey and it won’t tell you whether the purchase price is reasonable or whether the property needs repairs now or in the future. That’s why it can be a good idea to opt for a homebuyer survey. This costs more and the report includes a summary of the main positive and negative features of the property, so you can make an informed decision about whether it’s a reasonable buy at the price agreed. It’s most suitable for properties built within the last 120 years.

Building Survey
This is the most comprehensive inspection of a property, and includes photographs. It costs more again and it provides you with a detailed report on the property’s condition and a summary of the main positive and negative features of the property so you can make an informed decision whether it’s a reasonable buy at the price agreed.

Need help deciding which valuation or survey to choose?
This clear, impartial guide to property surveys from RICS may help you.

Your mortgage is secured on your home, so you need to be sure that you have home insurance, in case the unexpected happens.

We offer great value insurance products for you to consider.

• Home Insurance – both buildings and contents

Contents insurance covers your possessions and buildings insurance [Link to home insurance product page] covers the actual “bricks and mortar” of your property.

Tailoring your buildings and contents cover to suit your needs gives you greater control in protecting your home and means you could pay less for your home insurance.

If you are borrowing from a mortgage lender, you’ll need to take out adequate buildings insurance because lenders want to protect their investment if the property is damaged or destroyed.

It’s worth getting a quote for your home insurance early to know how much you will need to budget – quotes from Select2Protect are valid for 180 days. Get a quote.

• Life Insurance

None of us know what’s round the corner. Life insurance is very important in protecting your loved ones and covering your mortgage, if the worst should happen.

Mortgage Life Insurance, also known as Decreasing Term Life Insurance) is better for a loan or repayment mortgage because the sum insured reduces each year roughly in line with your loan or mortgage balance. You can choose the sum insured and term of your policy to match your mortgage or loan.

Term Assurance can help provide financial protection for your loved ones or covering an interest only mortgage  because the sum insured stays the same throughout the policy. Term Assurance can also be used to ‘top-up’ any other life cover you already have. You decide the sum insured and the term of the policy.

• Mortgage Payment Protection Insurance (MPPI)

MPPI can help pay your mortgage instalments if you are made involuntarily redundant, or if you are unable to work because of accident or sickness.
        
Find out more online, read our insurance guide for more help or contact your branch for friendly, helpful advice.

• Until contracts are exchanged, both you and the seller can walk away from the sale without any contractual liability.

• Before exchange, both your and your seller’s solicitor or conveyancer will need to be satisfied that their work is complete, that the survey or valuation report has been completed and that the formal mortgage offer has been received.

• Once this has all been done, your solicitor or conveyancer will ask you to sign your copy of the contract and the mortgage deed, if this applies, and they will ask for any deposit to be paid. A completion date for the sale will be agreed and included in the contract.

• Contracts will then be exchanged and the non-refundable deposit will be forwarded to your seller’s representative.

• Final accounts will be prepared showing what needs to be paid.

• You are usually responsible for the property from the point you exchange contracts, so it’s important that you have adequate buildings insurance in place. It’s worth getting a quote early to know how much you will need to budget – quotes from Select2Protect are valid for 180 days.

• Completion can happen on the same day as the exchange of contracts, or up to several months later, depending on the circumstances of the sale of the property.
• When you complete, your solicitor or conveyancer will transfer the balance of the purchase monies to the seller.
• Any Stamp Duty Land Tax due is paid to HM Revenue and Customs.
• The transfer of ownership and your mortgage details are registered at the Land Registry.
• Finally, and most importantly, your keys are handed over and you can move in!

Don’t forget to tell people you’ve moved - not just your friends and family, but all those organisations you deal with for your money, car, work and health.

Take electric, gas and water readings when you move in.

Remember to arrange your contents insurance to cover all your treasured possessions in your new home.

• Use our mortgage calculator to work out how much you can borrow and what your monthly repayments could be.
• Take a look at our mortgage products
• Get an agreement in principle online, or if you prefer, visit your local branch, or call us on 0845 045 0006 (between 8am and 8pm weekdays, except Wednesdays 9.30am to 8pm, and 9am to 1pm on Saturdays.