Everything You Need to Know About Purchasing a House

 

Thinking about taking the plunge and buying your very first home? You are about to embark upon a new adventure that promises just as many happy moments as it does twists and turns. Luckily, if you are properly educated and thoroughly prepared, there is no reason why you shouldn’t come out the other side a content and very proud homeowner. Here is everything that you need to know about purchasing a house in the UK. 

 

You will need a deposit 

 

While you will indeed be able to apply for a mortgage to help you pay for the house over a specific time frame, in the vast majority of cases, you will need to put down a sizeable deposit first. The absolute bare minimum required is that of 5% of the total property price – and it is important to note that not all potential lenders will accept a deposit this low. With 10%, you will open yourself up to a wider array of offers, and with 25% and more, you are sure to secure an attractive interest rate. 

 

The best way to source a deposit is obviously to save for it. However, if you are keen to speed up the process, you have a few options available to you:

  • Ask for help from your parents, otherwise affectionately known as ‘The Bank of Mum and Dad’ 
  • Boost your savings with a Lifetime ISA or a Help to Buy ISA: You can save up to £4,000 with the former and £2,400 per tax year. In both cases, the government will add a 25% bonus on top of what you save. With the Help to Buy ISA, you will only receive your bonus when you withdraw the money to buy your first home. 

 

Not all mortgages are created equal 

 

There are a few different types of mortgages to choose from. For example, you will have a choice between a repayment mortgage and interest-only mortgages. Interest-only mortgages are cheaper, but repayment mortgages help you settle your debt faster and more efficiently. You will also be able to choose from a fixed-rate mortgage (your lender guarantees that your interest rate will remain the same for a stipulated period of time), SVR mortgage (the rate will vary) and a discounted rate mortgage (you will get a discount on the lender’s SVR after a certain amount of time has passed. Comparison websites like The Money Hub can help you to find the best possible mortgage to suit you, even if you have bad credit. 

 

There are many unexpected costs involved 

 

Many first-time buyers think that the deposit and the mortgage repayments are the only costs that they will need to worry about when investing in a property. Unfortunately, this isn’t the case. There are many hidden and unexpected costs involved, including stamp duty, conveyancer’s fees, and more. Save yourself a shock to the system by preparing to pay around 15% extra based on the total value of the property in which you are investing and don’t get the process started until you are sure that you are in a financial position to be able to do so. 

 

By keeping the aforementioned facts in mind, you are just about ready to find your dream home. Here’s to many years of happiness spent in the property that you choose!

Beth Mahoney

Hi! I'm Beth Mahoney, a beauty and lifestyle blogger from Honiton in Devon.

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