15 May 2015
Where to start with first time buying
While many of us dream about owning our own home, sometimes it’s hard to know where to start. Here, Principality’s Customer Director Julie-Ann Haines looks at what’s really involved in those first steps to securing your own mortgage for the first time...
The word ‘mortgage’ and ‘buying’ have become so used in our everyday lives that sometimes it’s easy to assume everyone understands just what’s involved. But it can be a very daunting process.
Whether it’s that all-important first viewing, finding the right solicitor, putting in an offer, it’s easy to feel overwhelmed with decisions and detail when looking to buy your first home.
That said, taking the first step towards buying your first property can be very rewarding– and the feeling of pride in owning your own home can be invaluable. So how exactly should this process begin and what are the first steps?
A quick search online will throw up a number of opinions; and each will tell you that the first step should always be understanding exactly how much you could borrow. While a lot of people may think simply multiplying their income provides the base of what they can borrow – banks will actually work this out depending on your own individual circumstances, monthly income and outgoings. So there are a lot of factors that go into finding that all-important number.
The most important thing to remember here is to plan your finances really carefully so that you can afford your mortgage now and in the future – and make sure you are completely comfortable with how much you are going to repay. Banks and building societies will also look into this but if you want to be able to afford a holiday each year or are planning to buy a new car then make sure you factor this in. Be aware of things like stamp duty and make sure every small cost is taken into consideration. Another thing to bear in mind is the importance of interest rates and to make sure you get the best deal for you. Shop around. Make sure that if interest rates rise in the future you can afford to deal with them, it’s not just about what you can afford now but also what you can afford in the future. If rates rise, or you lose your job, you need to make sure you can still afford the mortgage.
So what next?
Once you’ve know how much you can borrow , your bank or building society will then check whether they are able to proceed, guiding you through some of the finer legal and financial details before inviting you for an official mortgage appointment.
While the basis of the appointment will be to gather lots of useful information about you and your finances, it is important to arrive prepared and armed with as much detail as you can, such as payslips, bank statements and proof of address, to make sure it goes as quickly and smoothly as possible.
Outside of speaking to your mortgage lender, the next few stages involve finding a solicitor, getting the right survey and putting insurance in place in case the unexpected happens. The latter is crucial, as this must be in place before you can exchange any type of contract with a potential seller. With a number of options it’s easy to get confused, so it is important to remember that your bank or building society is there every step of the way to help guide you through the process.
Once all of the finer details have been taken care of, you will then hear news of your mortgage offer – and hopefully that means that you will officially be on your way to securing the home of your dreams.
So, while there is clearly a lot to think about, it’s important to not get too overwhelmed and to spend plenty of time understanding exactly what’s involved.
Buying a home is probably the biggest financial commitment you’ll ever make, but it can also be the most rewarding. Your bank or building society is there to guide you through each step of the way and make the journey as smooth as possible – leaving you more time to worry about your new home party or moving in party and less time agonising over numbers.