Every time we sit down with a first-time buyer, I always get a similar response – and it drives me nuts! Don’t worry, it’s not the huge number of questions that bother us (we love answering questions), it’s the fact that they always feel the need to apologise because they don’t already know everything about buying a house! If it’s your first time going through the house buying process, you’re bound to have some questions about how everything works. That’s not a bad thing. So to all the first time buyers out there, we have 2 things to say. First, please stop apologising for not knowing everything! You should be asking as many questions as you can so that you know you’re making the right decision with all the information. And second, we want to provide you with all the information we can. So today, we have the 5 most commonly asked questions from first time buyers, and their answers.
What Comes First – The Property Or The Mortgage?
It’s a bit like the chicken and the egg – which one comes first? Are you supposed to find a property, or do you talk to a mortgage broker first? In general, we recommend that you speak to a mortgage broker when you’re ready to start house (or flat) hunting. They will be able to go through all the details with you and draw up a ‘mortgage in principle’. This is something that sets out what you can afford to borrow, and gives a conditional mortgage figure, and gives you a good guide on your price bracket too. You can then go out and find a property that you love. You don’t need to have a mortgage in principle in order to start house hunting, but some estate agents will ask for it, and the process will generally go quicker if you have one. A mortgage broker like ourselves can help you here by making contact with your estate agent and arranging a mortgage in principle before you get started, improving their confidence in you as a buyer.
But be warned – a mortgage in principle isn’t set in stone, and it doesn’t guarantee your mortgage application will be accepted. But you will need something in principle before you go about finding a property.
Can We Negotiate The Asking Price?
This is another common question, and one that first time buyers are always concerned about. If you’ve found the perfect property, but it’s stretching your budget just a little, can you negotiate down? The simple answer is yes! You can definitely try to negotiate, but it might not always be the right thing to do. It all depends on your personal situation, and the strength of your position as a buyer. As a first time buyer, you’re actually in a fairly strong position, since there’s no chain holding you back from purchasing. This means you can fuel quick sales – something a lot of sellers are keen on. But before you go diving right in, you should talk to the estate agent. Ask them if there are any other offers on the table, how long the property has been on the market and how the seller feels about negotiations. This all gives you a good sense of whether a negotiation would be accepted.
What Happens When We Put In An Offer?
You’ve fallen in love with a property and you’ve put in an offer – what happens now? If you’ve got a good estate agent, they will keep you in the loop every step of the way. But unfortunately, some don’t. But not to worry. Generally, one of two things will happen. Either your offer is accepted, or it’s rejected. If it’s rejected, you can go in with another offer and try to counter, or you can start your search again. But if your offer is accepted, then the excitement begins! You will need to find yourself a solicitor or a conveyancer to deal with the sale, and start the process of legally transferring ownership. Estate agents have their preferred partners, but you don’t have to use them, you can use any firm you like to carry out surveys and handle the paperwork.
What’s The Difference Between A Mortgage And A Deed?
When you buy a property, you will get two documents that are both around your purchase and ownership – a mortgage and property deeds. The deeds are the legal documents that show who owns the house, and are essential to prove ownership. If you’re buying alone, they will be in your name, and if you’re buying together, they will be in both. The mortgage just shows how you’ll be paying for the property. So if you buy the property outright, then you would only get a property deed (and probably a lot of jealousy from friends and family!).<p/<
Can I Do Anything To Make Sure My Mortgage Is Accepted?
We all want to think that we would be accepted for a mortgage, but the reality is that it’s a lot of money, and with banks not lending the way they used to, there are people who get turned down for a mortgage. Luckily, there are a few things you can do in the run up to applying that will improve your chances of being approved. For example, avoid applying for lots of other credit around the same time, or having a lot of unused credit available. If you have a credit card that you don’t use, put a few small things on it and pay it off every month, instead of leaving it empty. This actually improves your credit rating more than unused credit, since it shows you can handle your finances.
At The Money Guardian, we love working with first time buyers, helping them get mortgages in place and guiding them through the buying process. We are on hand to answer any and all of your questions, and help you make the most of your time by comparing all of your lending options under one roof. For more information about the steps involved in buying your first home, just get in touch with the team today.