First time buyers – your ultimate guide

Buying your own property can be daunting and there are many hurdles before you get your mortgage.  Below are our tips for first-time buyers to make the process as stress free as possible.

1. How much deposit do I need to buy a house?

When it comes to a deposit, size matters. The size of the deposit you have  affects both how much you can borrow, and what interest rate you can borrow at. In the current mortgage market you'll need a deposit of at least 5% of a property's value to get a mortgage. A lender would then lend you 95% of the property's value. So, if you wanted to buy a £150,000 property, you would need to save up at least £7,500 deposit.

2. Make sure you can afford your monthly repayments

Think carefully about your finances to make sure you're definitely ready for what will probably be the biggest financial commitment you've ever made. Don’t rely solely on your mortgage provider to determine whether you will be able to afford repayments. Bear in mind that interest rates may rise in the future – if a rate rise would leave you struggling, this may be a sign that you should save a little longer.

3. Budget for the other costs of buying a home

When you do your sums, make sure you add the full costs of buying a house and mortgaging. In addition to your deposit, you need to consider mortgage fees, lawyers' fees and LBTT for starters (you won't have to pay stamp tax on the first £145,000 of a property, but as stamp duty is tiered, you'll pay a percentage on portions of the value over that). In addition, think about costs such as removals, furniture and decorating, and building insurance.

4. Affordable schemes to get on the property ladder

There are a number of government-backed schemes aimed at giving first time buyers a helping hand onto the property ladder. If you are able to use one of these schemes, lenders will still ensure that you can afford to pay your mortgage.

5. Finding a mortgage

To get the best mortgage deal you don't just need a decent deposit, you now need a good credit score too. If you're self-employed or a contractor, then getting a mortgage is tough as you need cast-iron proof of what you earn. If you’re struggling to get a mortgage to buy your first home you might want to consider a guarantor mortgage. This means that a parent, guardian or close relative agrees to be responsible for the mortgage payments should you be unable to meet them. 

Getting a mortgage today can be tricky. It can help to use a mortgage advisor rather than going solo as they will be able to advise you on the best deals available for your specific circumstances. McQueen Legal works with independent mortgage advisers who have years of experience with first time buyers.

Once you have made your decision, saved your deposit and your mortgage is agreed, all that is left to do is find that dream home. Have a look at McQueen Legal’s properties to see what is on the market right now.

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