Fed up of parents shouting at you? Noisy neighbours? Bank of mum and dad running low on supplies? Want to put your mark on the world? Or an overwhelming desire for independence?
Whatever the driving force for purchasing your first home, the whole process can be both exciting and overwhelming. We have therefore put together our top 5 facts for buying your first home, comparing your first home to the world of dating!
- Fail to prepare… Prepare to fail! – Although many of the mainstream lenders claim to be approving 9/10 of their first time buyer mortgage applications, it is important to know how to organize yourself before the application process. If we compare the preparation process to trying to get a first date; preparation is key. You need to make yourself as appealling as possible to the lender (your potential date). Similar to setting yourself up on a dating website; you do not want any current or past indiscretions to affect your attractiveness to the lender.
- Even good risks can be rejected, simply because they won’t make the bank money! – In dating terms, someone may look too good! Their attributes may not ignite any excitement for you if you are attracted to risk. This is similar to lenders. Lenders want to know what your history of repaying money is. To Lenders, the most attractive customer will keep up to date with payments whilst still making them money in the form of interest from borrowing. It is good to check your current credit. Lenders will usually search your credit rating using Experian, Equifax PLC and Call Credit. You can get details of the information they hold about you by visiting their websites, or by sending each of them a written request and a cheque for £2. If you see that they are holding particular information about you that’s wrong, you should forward the correct information straight away. Lenders also check electoral role information, which is publicly available and contains address and resident details. Make sure you are on the Electoral role.
- “People want variety and something that is affordable” Bobby Brown – When you join a dating website, you may want to use their matchmaker to find you an ideal mate based on your needs and requirements. This is similar to obtaining financial advice from a mortgage advisor. They will be able to run through the various mortgage options which you have and explain the mortgage process for you. They will outline which is the best match for you! They will then be able to run through your affordability and draw up an agreement in principle. This is like being offered a date. It means that you have been given the potential figure that you could borrow based on your details and subject to finding a property. Taking advice from someone who has knowledge of a wide range of products on the market is essential to avoid being caught out by small print or inflexible contracts that affect later life choices.
- “I always say don’t make plans, make options” Jennifer Aniston – Once you have obtained your mortgage in principle (or date), it is important to consider all the housing options that you have or as the case may be other potential dates. As a new buyer you are in a fantastic position to purchase a property. The government has launched schemes such as ‘new buy’ which means you could put down as little as a 5% deposit. However, it is worth considering if a new build is for you or if an old property in a well developed area is more to your taste. Take your time to view properties! Consider things such as crime rates, previous flooding and nearby schools which may all come in to play further down the line. Once you have found your property it is important to check what may be hidden beneath the floorboards. This can be compared to sending your friend to have a cheeky look at your blind date before you go into the restaurant. The property will need to be valued by the mortgage lender to ensure that it is a good risk for them. You may want to consider arranging your own survey as well, as this would give you the peace of mind that you are getting good value for money. There are many hidden costs to buying a property such as; solicitors costs for purchasing your new property; stamp duty on purchase; valuation costs for new property; arrangement fees; and removal costs.
- “Even death is not to be feared by one who has lived wisely” Buddah – Life insurance is not always mandatory when taking out a mortgage. However, having the right protection in place gives you and your family peace of mind knowing that financial help will be available if you are no longer able to provide that security. It is important to consider what would happen if you were to pass away, or develop an illness leaving you unable to pay for the mortgage. Protection is available to prevent these scenarios from impacting your family. This is similar to ‘making it official’ in dating terms, giving you the additional security of knowing you have finally found a relationship.
To summarise, obtaining a mortgage for your first home has many similarities to the world of dating… By following these top tips I’m sure, in the words of J.K Rowling, “you’ll find someone somewhere who’ll have you.”