The buyer’s market and home buying process can be a tricky one in the Uk, especially if you’re a first-time buyer and not done it before. There are plenty of pitfalls and traps you can fall into, but this guide provides you with some key things to avoid when purchasing your home to give you the best chance of success on your home buying journey 

Common first-time buyer mistakes

Beware of chains 

Being in a lengthy home buying chain can present several pitfalls. Delays are common due to issues with financing, inspections, or legal matters, causing frustration and uncertainty. 

There is an increased risk of the entire chain collapsing if one party encounters an issue, resulting in starting the process over again. Lack of control over the transaction timeline can be stressful and frustrating. Additionally, financial risks may arise, such as incurring additional costs for temporary accommodation or storage while waiting for the chain to progress.

Don’t forget buildings insurance 

When buying a house, it’s not only a condition of the mortgage provider to have adequate buildings insurance in place, but it’s also important to proactively ensure you are protected against various risks such as fire, storm, floods, theft, and other unforeseen events. 

Failure to set up appropriate insurance coverage could potentially result in significant financial loss, potentially amounting to hundreds of thousands of pounds, in the event of damage or loss to the property. It’s essential to carefully review and understand the insurance requirements and options available to protect your investment in a home.

Avoid taking out credit whilst applying for a mortgage 

Taking out credit during a mortgage application process is not recommended as lenders may re-assess your credit score after the application, potentially impacting your approval. It’s crucial to maintain a stable financial situation during the process to increase chances of approval and secure favorable loan terms without risking changes to your credit score that could affect your application.

Speak to an Expert

Whether you’ve just had an offer accepted on a property and you’re ready to go, or you’re simply wondering how much you need to save for a deposit, it’s never too soon to reach out.

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Sort your mortgage before you start looking for a property 

One of the biggest mistakes for first-time buyers is not sorting out their mortgage before finding a property. This can lead to potential issues such as getting emotionally attached to a property that you may not be able to afford or being in a weaker negotiating position if you cannot provide evidence of pre-approved financing when making an offer. 

It’s essential to secure a mortgage pre-approval beforehand to have a clear understanding of your budget and improve your negotiating power in the homebuying process.

Understand the costs of buying and ownership 

When buying a home, it’s important to understand both the upfront costs and ongoing expenses associated with the property. Upfront costs may include solicitor’s fees, stamp duty, survey fees, and mortgage fees. It’s important to budget for these expenses to avoid surprises later. 

Additionally, ongoing expenses such as utility bills, council tax, ground rent (for leasehold properties), and service charges (for flats) should also be considered to ensure you can comfortably afford the property in the long run. Being aware of all these costs upfront can help you avoid being caught out later and ensure you are financially prepared for homeownership.

Understand your mortgage terms – eg fixing in for 5 years 

When buying a home, it’s crucial to thoroughly understand the terms of your mortgage. This includes being aware of any early repayment charges (ERCs) associated with fixed-rate mortgages, especially if you intend to sell the property within the fixed rate period. 

Some fixed-rate mortgages may have ERCs if you pay off or refinance the mortgage before the fixed term expires, which could result in significant financial penalties. Understanding the impacts of ERCs and other terms of your mortgage can help you make informed decisions and avoid unexpected costs if your plans change during the fixed rate period.

Buy the right property – May save you  money on the long run 

When buying a home, it’s essential to balance affordability with the long-term suitability of the property. While it’s important to stay within your budget and not overextend yourself financially, compromising on a property solely for short-term cost savings may not be the best decision in the long run.

 Moving homes can be expensive, with costs such as transaction fees, legal fees, and moving expenses adding up. Buying a property that meets your needs and suits your lifestyle for a longer period of time may save you more money in the long run compared to moving multiple times due to outgrowing or dissatisfaction with a property you compromised on initially. 

It’s important to carefully consider your long-term housing needs and make informed decisions when buying a home to avoid unnecessary costs and ensure a wise investment for your future.

Leasehold – ensure understand implications of leasehold properties 

When buying a leasehold property, it’s crucial to thoroughly understand the implications and restrictions of the lease. Leasehold properties typically have a lease agreement with a set term, and it’s important to check the lease length as it can impact your ownership and future resale potential. 

Some leasehold properties may have rising ground rents or expensive service charges that can significantly impact your ongoing expenses. It’s important to carefully review and understand the terms of the lease, including any potential future changes, and associated charges before committing to a leasehold property.

 Seeking legal advice and asking relevant questions can help you make an informed decision and avoid any unexpected costs or issues related to the leasehold property in the future.

Always shop around for a mortgage

Given the substantial amount of money required to purchase a house in today’s market, it’s crucial to carefully consider your mortgage options. While your bank may be a good starting point, relying solely on your bank may limit your ability to explore other potentially favorable options. 

It’s important to shop around and consider working with a mortgage broker who has access to a wide range of mortgage products from various lenders. A mortgage broker can help you compare different mortgage deals and find the most suitable one for your financial situation and goals. 

With their expertise and access to multiple lenders, a mortgage broker can increase your chances of finding a favorable mortgage deal that best meets your needs and helps you save money in the long run.

For more info on first-time buyer mortgages please contact a member of the Strive team, by emailing [email protected] or call us on 01273 002697.