Save, save, save
It is important to save your money when thinking about buying your first home, as you want to be financially stable before going through the property purchasing process.
You will need to pay monthly mortgage payments but there are also other costs that can occur when buying your first home. These costs will include the cost of hiring a solicitor, Land and Buildings Transaction Tax (LBTT) (when the purchase price is more than £175,000 for First Time Buyers) removal costs as well as any furnishing, decorating or remedial work which may need done.
Speak to a Mortgage Advisor
This can be at your chosen bank or you can hire a mortgage broker who will look at a range of lenders and products that are right for you. Some mortgage brokers will provide a service free of charge, however others will charge a fee.
First time buyers need to have an idea of what their budget is when house hunting. This can be made easier when you look at your income and expenditure. If you are buying the house with someone else, then you should include their income and expenditure.
Once you know what you can afford, you will be able to look at the type of property you want and factors related to the price. These factors include how many bedrooms, location of the property, garden, garage etc.
Your mortgage advisor will analyse your ability to pay if your circumstances were to change, for example, having a family or losing your job. The stress test will also look at if you would be able to afford your payments if the interest rates were to rise.
Applying for a mortgage can be a timely process as applicants need to provide evidence of their income, debts and household bills.
There are different mortgage types in Scotland, which include ‘repayment’ mortgages, and ‘interest only’ mortgages. A ‘repayment’ mortgage will mean you pay the interest and capital off each month. An ‘interest only’ mortgage means you will only pay the interest on the loan. The full capital (the amount you borrowed) will still be due at the end of the mortgage term. ‘Interest only’ mortgages are less common and usually only apply in ‘Buy to Let’ circumstances.
Contact a solicitor/conveyancer
This is where Jones Whyte come in. You must have a solicitor before you can make an offer on the property. Solicitors are responsible for putting in the offer for the property, negotiating with the other party, drafting and preparing the missives (the contract of sale/purchase), completing the conveyancing to ensure you have adequate title to the property, preparing your mortgage documents and LBTT tax returns as well as organising the transfer of the money. Your solicitor will be on hand to complete the transaction from start to finish and is there to help with any queries you will have as a first-time buyer.
Go house hunting!
View a number of houses that suit your needs and budget. Ideally you should view different styles of houses to ensure you know what it is that you are looking for.
Once you have found your home, try to view this a second time. This allows you to be more critical – is there any work that needs done? Does everything work at the property? Maybe bring a more experienced parent or family friend with you to help with your decision.
Once you’ve found your favourite property you can then request the Home Report. This is made up of three parts: a single survey, a property questionnaire and an energy performance report. These elements will give an assessment of the property which will tell you what kind of condition it is in. The Home Report is your guide to the property with information you need to be aware of before purchasing.
Make an offer
Your offer must be sent in writing from your solicitor. The seller will then consider the offer. Your property solicitor can guide you on a good price to offer, dependent on the other interest in the property, length of time on the market and the local statistics. Choose a firm that has good knowledge of the local property market to ensure you receive the best advice.
Once a price and date of entry has been agreed, the property will be marked as ‘Under Offer’. This means that the property won’t be shown to any more buyers.
Over to your solicitor again…
Your solicitor will now carry out the necessary work to complete your purchase. This will include the conveyancing work that puts the title in your name(s).Further negotiations between you and the other party are extremely likely after an offer has been accepted. These negotiations include deciding the date of entry, permits for alterations to the property (if needed) and many other factors may need to be negotiated. Your solicitor will keep you advised each step of the way.
Once all the points within the contact have been agreed by both parties in writing, a legally binding contract is formed. This is known as ‘concluded missives’.
Move in and Relax
Finally, we are on to the last step of the ultimate guide. The only thing that is left is for you to move all of your belongings in to your new home and relax.