There’s a lot to think about when buying your first home. Many first time buyers end up making expensive mistakes. Some mistakes could even prevent you from buying a home altogether. Below are some of the biggest blunders to avoid.
Not looking into first-time buyer help schemes
There are a number of government ‘help to buy’ schemes in the UK that can make buying a home more affordable. These include ‘help to buy: shared ownership’, the ‘help to buy ISA’ and the ‘help to buy equity loan’.
Such schemes could allow you to save up for a deposit much more easily and could broaden your opportunities when it comes to properties. Make sure that you haven’t overlooked this help.
Not shopping around for a mortgage
There are so many different mortgage lenders out there. Some specialise in certain types of properties while others may cater to certain types of buyers. Make sure that you’ve looked at a range of lenders and not just opted for the first lender you can find.
It could be worth using a mortgage broker to help you shop around. Brokers are likely to know all the best deals and may even have access to exclusive deals that you wouldn’t otherwise be able to access.
Applying with a poor credit score
Many mortgage lenders are likely to reject you if you have a poor credit score. Others may approve your application, but they’ll likely offer high interest mortgages which could cost you a lot of money in the long run.
If you’ve got a poor credit score, consider taking steps to improve your score before applying for a mortgage. There are credit builder schemes that can help you build your credit score within a year. Make sure that you’re also on the electoral register – without this, lenders may not be able to access your credit score. There are apps that you can use to check your credit score to determine whether it is good or poor.
Saving up just enough money for the deposit
The deposit is the biggest upfront cost to consider when buying a home. However, there are many other expenses involved in buying a home such as a mortgage valuation, legal fees, a home survey and the cost of hiring a moving company.
Make sure that you can afford all these extra costs. You may not be able to buy a home if you can’t afford them.
Underestimating the time it can take
The process of buying a home can take many months. Don’t assume that you’ll be able to buy a home in a hurry – if you’re moving somewhere to start a job in a month’s time, it could be worth renting somewhere temporarily or finding a way to commute there for a few months.
Having all your finances in order and keeping communication with the seller and your lender can help to move the process along more quickly. If you’re buying a new build that hasn’t been constructed yet, make sure to stay in communication with the developer.