First time Buyers Guide
Buying a house or flat can often be quite confusing and complex – especially if you have never done it before. We understand how stressful it can be for a first time buyers. So we have created our first time buyers guide to help make the process as simple and smooth as possible. Our guide contains information and tips on how to save for your deposit, understanding what legal fees are involved, which mortgage you should go for and the different stages involved when buying your home. We’re here to help!
Working out Your finances
Saving up a deposit
So you have decided it’s time to get onto the property ladder and buy a place of your own. Step one is start saving up the deposit. Banks have a number of different account options you can use. Help to Buy ISA’s and monthly savers.
Generally you would be looking to try and save between 5% – 20%. The bigger the deposit the wider range of mortgage rates you will have access to.
There are additional fee’s to think about aswell as your deposit:
- Solicitors Fee’s
- Stamp Duty – although first time buyers do not have to pay stamp duty on the first £300,000
- Mortgage set up and arrangement fees
- Any furnishing and decoration needs
The most important thing to consider when choosing a mortgage is that you can afford to make all the repayments. Don’t overstretch yourself and risk not being able to make a repayment. If you do miss a payment this could incur additional charges, and you could rick losing your property.
Help to Buy Scheme
Through the Help to Buy (Scotland) Affordable New Build Scheme, the Government will lend you up to 15% of the cost of your newly built home, so you’ll only need a 5% cash deposit and a 80% mortgage to make up the rest. (Your combined mortgage and deposit must cover the minimum 85%.) This is currently available on properties up to £200,000.
There are a number of different types of mortgages available to you. Fixed rate, variable rate, repayment or interest only
Repayment vs Interest Only
With an interest only mortgage you are only paying the interest on your loan, your monthly repayments do not chip into your actual debt. At the end of your mortgage you will still owe the full amount but will have paid interest throughout that time frame. Repayments; although they more each moth has the bonus of paying towards the original debt – depending on the terms of your mortgage you could end up being mortgage free at the end of your term, and in the interim if you were to remortgage you will have a lower figure needed for your new mortgage which means you’ll have a lower LTV (loan to value) which can lead to a lower interest.
Fixed-rate vs Variable
Fixed rate mortgage means the interest rate remains the same for a set amount of time; using 2, 3 or 5 years. Because the rate is fixed, your monthly repayments will remain the same throughout that term. If you are on a fixed rate term and it expires – you will automatically be placed onto a variable rate, which you can stay on or you can set up a new fixed rate term with your lender.
A variable rate mortgage means that the interest rate is variable and your monthly repayments can fluctuate at any point. You can go for a standard variable rate or a tracker rate.
Standard rate is fixed by your lender and is usually dictated by changes in the Bank of England’s base rate, however it is completely up to your lender to increase and decrease as they choose. The tracker rate follows the economic movement – again usually the base rate of the Bank of England but this doesn’t mean that you will be paying what the base rate is, the tracker just follows the general trends.
So which one do you go for? There is no right or wrong answer it depends on your personal circumstances. If you are inexperienced, worried about your financial stability or someone who would like to know exactly what you will be paying then a fixed rate could be the better option for you.
Finding the Right Property
Once you know how much deposit you have and what you can borrow it’s time to start finding your perfect property.
When buying a home off plan you’ll be basing your decisions on seeing the show home; it is still important to take the time.
Buying a new home gives you the freedom to personalise your home before you even move in, you can choose tiles, appliances, lighting, fitting, fixtures and many more.
One of the main advantages of a new property is that everything in it is also brand new; new technology, new style, new appliances and should anything go wrong, we offer a 2 year warranty on central heating (with the exception of the boiler), and all kitchen appliances.
Your new Living by Robertson home is also covered by the National House Building Council 10 year Buildmark Warranty. For a further eight years after that, were you to experience any structural problems, they’d be dealt with by independent body, NHBC, which is recognised as setting the benchmark for quality in British building standards.
The earlier you reserve the more choice you’ll have so why not have a look at our available plots to start your search
When you move in, we’ll stay in touch to make sure you know how everything works and is to your satisfaction. This is one of the most important purchases you’ll ever make.
We want to help make this a happy and exciting time for you too.