Possible mistakes first time buyers can make
A recent report has shown that first time buyers make over a half of the market in the UK. People buying their first home account for 51% of sales and their number has increased by 21% since 2008, reaching the highest level for a decade, according to new research from lender the Halifax.
It can be a bit daunting if you are a first-time buyer so being armed with knowledge will give you a smoother ride towards your first home.
Here at Park and Bailey we have come up with a list of mistakes and how best to avoid them…
Buying at the wrong time
There is a wrong time to buy a house, but luckily there is a right time too. You need to do your research on factors that will affect the price of a house. This means, knowing about the current economic climate, as well as the housing market too. High rates of unemployment can affect mortgage rates, and the housing market can be a fickle thing too. It is important to be patient, wait for a better economy and housing market before you jump in and buy. In this time, you might be able to save up a bigger deposit!
Not doing your homework
Most first-time buyers see the house of their dreams and settle for that straight away. Before this you should start looking into the area and property prices, because going into the housing market blind is not ideal. You must know what price you are willing to pay and know about the area you want to live in. This also means knowing, crime rate, pollution levels and local shops. If you want to sell, all these things could impact your house’s value. It’s vital that you do research before you buy your first home.
Avoiding credit score
As with any financial product, you’ll need a good credit score in order to qualify for a mortgage. It establishes your reliability as a borrower, mortgage lenders want to know their investment is safe with you! A better credit score means better mortgage rates for you, which is ideal because who wants an expensive mortgage? It’s key to make sure you review your credit score, to avoid being rejected from your mortgage lender, if your rating isn’t up to scratch.
Not saving enough money
Typically you only need around 5-10% of the house’s price, as a deposit, saving more can put you in a better position. Saving more deposit means that you’ll have to borrow less, which means you may pay back slightly less over the lifetime of your mortgage. If waiting and saving a little longer is an option, make sure you do! It can benefit you in the long term.
The wrong mortgage deal
When it’s time to get a mortgage, you need to shop around. Find the right deal for you, because this mortgage will be with you for most of your life. Consider seeking help from an Independent Mortgage Advisor, to get fair advice about the best mortgage.