If you have been renting for the past decade or more, and you are sick of lining the pockets of a faceless landlord, it might be time to think about purchasing your first home. Being a first-time buyer can be a nerve-wracking experience. It is the first time that you will have to commit to a location, a home and parting with your hard-earned cash. While renting can be annoying because it feels like you are throwing your money away, it does give you some freedom. You aren’t tied to any one place and you can move around as much as you want. This is ideal if you are a contractor or you get itchy feet a little too often and need to get your travel kicks.
When you do eventually decide to take the plunge, you need to hit the housing market with bucketfuls of knowledge. When you aren’t an expert, you can feel vulnerable especially when you are taking on a large mortgage and committing to a long repayment term. Buying your first home should be exciting rather than stressful.
Take a look at this essential guide to help you move seasoned renter to confident first time buyer.of a home.
Before you can hit the property pages online, you need to ensure that you are in a financially ready position to buy. This means that you have to start a good three months prior to house hunting. Ensure that you don’t go into your overdraft at least three months prior to applying for a mortgage. Ensure that you forego the big ticket items. If you are planning to apply for a mortgage, don’t go on a swanky all inclusive holiday the week before or pay for a brand new car using your credit card. You need to live a bit more frugally. This demonstrates to your bank that you can live within your means and that you are responsible with money and that you won’t be defaulting on your home loan.
Mortgage lenders will only lend to responsible borrowers so prove that you are one. They will also only lend you an amount based on their advanced affordability calculations. They will lend approximately three and half times the amount of your annual gross incomes. This varies if you are applying for a joint mortgage. This is why you need to save as much money as possible for a deposit. The greater the deposit you have, the more you can spend on your first home. If you want a pad worth $500,000 but you can only borrow $400,000 then you need to have a deposit of $100,000 to make up the difference. This is why you need to save up. This can take months if not years, so hopefully you have a nest egg in the bank.
You will need to employ the services of a solicitor or home conveyancer to take care of the legal requirements of a home purchase. This costs money which you will need to factor into your home buying process. A solicitor will help you conduct searches, make inquiries on your behalf and help transfer monies to and from your account. They will also be your point of contact regarding any queries you may have about your home purchase. There’s nothing worse than using a solicitor just because they are cheap. They may be located miles away and you might not even get a named contact but rather a team instead. This means no one really gets to know your purchase and they hold no real interest in it. Instead, go for a local solicitor who you can visit if you need to. Solicitors are busy people, but if you email or call and leave a message they should get back to you within twenty four hours.
When your financial eggs are all in a row, you can consider your search. Firstly, if you find your dream home early on, don’t think that it’s too early or that you have to see more to compare. If you see it, put an offer in. If you find that the vendors can only move after your rental term has ended, you need to consider self storage to house your goods while you move in with parents and wait for your completion date. It may seem like a hassle, but it’s not expensive in the scheme of things, your items are safe and you will have all the time in the world to transport them to your new pad once you have your keys.
Searching for a dwelling can be tough if you don’t know what you want. Scatter gunning a search is a waste of time. Think about the location you want to be and the sort of pad you would like to live in. Do you need an extra bedroom? Is a garden important to you? Can you live on a busy road? These are all important factors in your search. As you see more properties, you will be able to hone your search a little more.
Make contact with a few realtors and get on their books. Make it clear that you are a serious buyer, that your finances are ready, you have a home loan ready to go and you can move quickly. This makes you an excellent proposition and they will be eager for you to help them claim a selling commission.
When choosing the location of your humble abode, forget about opting for the up and coming area. This up and coming area may just be a glossy euphemism for run down. Check out the local crime statistics, how good the schools are and whether there are any green spaces locally. Visit the locations you are interested in at different points during the day and at night to get a feel for the place. Visit the shops, cafes and speak to the residents. If you get a good vibe, then start your search.
Making Your Offer
Don’t assume that you have to pay the full asking price – treat this as nothing more than a guide. At the same time, you don’t want to anger the vendor with a ridiculously low offer. Ten per cent below is a good starting point. Make your offer and wait. Give yourself a ceiling and work up to it in increments. The negotiations only really begin when you have negotiated a sales price. You may find that you want to go further once you have had a survey done. Surveys are necessary if your home loan lender will give you the money needed to buy your house. At the very least they will conduct a basic valuation survey to make sure they are lending the right amount. If they value your home at a lower value than you, they will not lend.
Surveys can be more comprehensive, so they focus on the structure and integrity of a house. A surveyor will check windows, brickwork, the attic and walls. Something is always flagged up on a survey. If its heave or subsidence, pull out. This is too much for a first time buyer to fix. However, if its a bit of damp or a roof issue, you could negotiate the price down or ask the vendor to fix the issue prior to completion.
When the moving day arrives, it’s natural that you will be nervous. This is your first day of home ownership so it should be exciting. You will need to ensure that you have a removals company booked so you can load up your items and furniture to transport to your new pad. A removals firm doesn’t just act as a courier. They can do so much more to ease your stress on moving day. A few weeks before, they can package up your items. They are experts with the bubble wrap, tissue and tape that is needed to ensure even your most delicate and sentimental items are protected. It can be nerve-wracking when moving because you worry about your antique mirror or losing some of your most treasured possessions. Go with a removals company based on word of mouth recommendations.
On moving day, ensure that you have an essentials box that remains in your possession at all times. This can be a life saver, when at the end of a long moving day, you can leave all of the other boxes but know that you have a bottle of your favorite red, a glass and some chocolates good to go.
If you are moving by yourself, rope in some pals or family to be there for moral support. It can be a tense time waiting for your solicitor to call. Sometimes, a solicitor won’t get in touch first thing in the morning so you have to be patient. You cannot pick up your keys and move in until the monies have been transferred. If it gets to 1pm and you’ve heard nothing, give your solicitor a call. The chances are they are busy with completions and haven’t got around to phoning you. When you get the all clear, you can head to your realtor, pick up your keys and move in.
Moving day is an exciting time, especially when you are a first time buyer. Putting down roots probably sounded scary a few years ago, whereas now, nothing sounds better than committing and having your own home. Follow this guide and you will go from seasoned renter to first time buyer.