Getting on the property ladder
Dom Beer and Chris Beer
Congratulations on your decision to purchase your first home! This is an exciting milestone in your life, but we understand that it can also be overwhelming, given that it's likely to be one of the most expensive purchases you'll ever make.
With so much to consider, it can be challenging to know where to begin. That's why we've created a comprehensive guide that outlines the entire home buying process step-by-step, so you can feel confident and prepared every step of the way.
Our goal is to ensure that you have all the information you need to make informed decisions and navigate the home-buying journey with ease. However, if you have any questions or need further clarification on anything, please don't hesitate to reach out to us. We're here to help you every step of the way.
We can also help with:
What is a mortgage?
Most of us may not have enough money to buy a house outright, this is where a mortgage comes in. A mortgage is a load that you use to buy a property.
Payments
Most of us may not have enough money to buy a house outright, this is where a mortgage comes in. A mortgage is a load that you use to buy a property.
Considerations
Our team will take into consideration how much you earn and how much you regularly spend to calculate the amount you will be able to borrow.
Deposit
A deposit of at least 5% of the property value will be required beforehand.
Where to start
So, you’re now in a strong position to apply for a mortgage. We’ve put together some tips to get you ready. By using these tips ahead of time, you will be able to speed up the process.
Keeping your finances in order
Our team will always advise you to keep your finances in order. Looking at your expenditure vs. your income and determining if you’re able to afford the repayments. Mortgages are a financial commitment and ultimately, we need to know you can afford it.
By ensuring you repay outstanding loads and keep on top of your bills, you will be showing our team that you are suitable for a mortgage.
Electoral roll
One of the easiest things to do before seeking advice is to register on the electoral roll. This allows you to track and prove your current address officially.
Registering will also help by boosting your credit score.
Saving
Savings accounts are a great way to trace your bank statements and therefore making it easy for you to:
- Show how you saved for your mortgage deposit.
- Show our financial advisors that you’re able to save money or a set amount each month.
Credit ratings
When it comes to improving your credit rating, Credit Cards will really help. They show that you’re able to look after finances and make repayments within a certain amount of time.
Review what you’re currently spending money on and try to cut back where possible. Ask yourself if you’re truly making the most of those subscriptions. If the answer is no, then you could consider cancelling them, even if it’s just for a while to save a bit of extra money.
Credit ratings
As previously mentioned, as advisers we look for a good credit score to help us find the right lender for you. A good credit score will help leaders to decide:
Whether to lend you money;
How much to lend you;
The interest rate to charge;
Luckily, there are several ways to improve your credit score. Which will show lenders that you’re financially responsible.
Proof of address
Making sure you have proof of address by signing up for the electoral register and ensuring all bills and financial commitments are registered to your address. For financial advisors and lenders, this is an easy way to confirm your identity and current address.
Ensure you’re responsible with your credit card
Your available credit is calculated by subtracting your outstanding balance from your total credit limit. It's important to keep an eye on your available credit because if it falls too low, your financial advisor and potential lenders may perceive it as a sign that you're struggling financially.
This could make it more difficult to obtain credit in the future or may result in lenders charging you higher interest rates due to perceived increased risk. Therefore, it's important to maintain a healthy level of available credit and manage your outstanding balance accordingly to ensure that you're seen as a responsible borrower.
Our top tip is to make sure you avoid withdrawing cash from your credit card. This goes against your credit score and will appear as though you have no money in the bank.
Have a history of your accounts
Prove you have a good financial history by having a variety of previous bank accounts. This could include savings accounts, ISA, Credit cards Etc. This will allow our financial advisers to view your credit has previously gone.
Make payments on time
This may sound obvious but making payments on time shows a lender that you can manage your finances and pay bills, which is a great sign when applying for a mortgage.
How much can I afford?
Determining how much money you can borrow is a crucial step in the home-buying process as it will help you establish a realistic budget for your purchase. By figuring out the amount you can borrow from a lender, you can then determine the price range for the homes you can afford.
Ultimately, knowing how much you can borrow will enable you to make informed decisions about which homes to consider and ensure that you're not overextending yourself financially.
If you're looking to find out how much you can potentially borrow, online affordability calculators can be a helpful starting point. These tools allow you to input your income and expenses, and they will calculate an estimate of how much you may be able to borrow.
What is a Decision in Principle?
A Decision in Principle, also known as a DIP, is a certificate stating how much a lender is willing to lend you.
Before putting an offer on a house or applying for a mortgage you should speak to your financial adviser. We will be able to help you to apply for a DIP ahead of time. This ‘decision’ is made through a few checks including your outgoing, incoming and credit score.
Time to start looking
When it’s time to start viewing properties, the exciting part has begun.
Before you start viewing properties, whether it’s online or in person, it is always worth writing a ‘must have’ list. This could include:
A big garden
Kitchen-diner
Good parking
Close to the shops
Writing a list beforehand will help you find the right property for you.
Surveys, solicitors, and property chains
Surveys
If you would like to have a survey carried out on a property, you will be able to highlight some invaluable things that may have remained hidden otherwise. Our Exeter based mortgage advisors can walk you through the process and available surveys.
Here are some surveys that you can carry out:
Have a history of your accounts
This is a free service that most lenders offer, this is just a valuation of the property that the lender will use. This isn’t a survey, and you won’t receive a report yourself.
Condition reports:
With a new build property, a condition report is commonplace and provides a good way to find out the overall condition of the property. This service doesn’t include any advice.
Homebuyers survey:
If the property appears to be in good condition, you may want to arrange a homebuyer survey. This will give you a property valuation and check for any faults and repairs that are needed. This will include a cost for the repairs.
Structural survey:
The most in-depth of property surveys, a full structural survey is the best way to it identify challenges with older properties or properties with extensions.
Solicitors and conveyancing
When an offer is accepted the next stage of buying the property is to use a solicitor or conveyancer to take care of the legalities involved.
What does a solicitor do?
Talking to the seller’s solicitor
Your solicitor, on your behalf, will talk to the seller’s solicitor for a draft contract and any other items that are requested.
Conveyancing process
Generally, your solicitor will be able to carry out the conveyancing process. This includes environmental searches and enquiries with local authorities. The process is often useful when it comes to revealing any planning issues that could affect the property.
Investigations and contracts
Once investigations are completed and you’re happy to proceed your solicitor with finalise the contract and explain it in more detail to you.
Contract exchange
Your solicitor will be paid a fee to exchange the contracts on purchase. Once this has been done, you have legally agreed to buy the property.
Finally, your solicitor will ensure the keys to the property are available when the completion takes place.
Our financial advisers in Exeter will be able to recommend a solicitor during the mortgage process.
What fees will I be paying?
Alongside the deposit and mortgage repayments, there are other costs when buying a home.
Valuation fee
You'll be charged different costs depending on the survey/s you decide to have. The more detailed the survey, the higher the cost.
Removal costs
Removals services are not mandatory, but you may need to consider the fees when looking to move into your new home. Keep in mind, the fees are often more in spring and summer.
Legal fees
A solicitor is vital when it comes to completing your mortgage. The solicitor will deal with all contracts, documentation and searches required.
Product fees
You’ll find that some mortgages come with a product fee, this is something that you will need to pay upfront or as a part of your mortgage payments.
Insurance
We will always recommend that you take out building and contents insurance. This will protect your home or belongings in the event of damage or even theft.
Arrangement fees
You should keep an eye out for the administration charge. This is a charge for arranging the credit of your mortgage that is made by the lender.
Stamp duty
Buying a house over a certain price will often lead to you paying stamp duty. As a first-time buyer, you are exempt from paying the stamp duty of properties up to £425,000.
Applying for your mortgage
Ready to apply for your mortgage? Our mortgage advisors in Exeter are on hand to help you with expert advice from start to finish. Arrange an appointment today.
Whether you are a first-time buyer, moving home or looking to remortgage, our team is ready to help the process easier.
If you would like to find out more, to start the process, or you would like our professional advice, simply speak with our friendly team today.
Your home/property may be repossessed if you do not keep up repayments on your mortgage.
About Beerstone
Beerstone Financial Services was established in 1996 by Chris Beer, our Founding Director, who still plays a key role in the company and ensures we maintain the best service.
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Beerstone Financial Services was established in 1996 by Chris Beer, our Director, who still oversees the company and ensures we maintain the best service.
In total we have over 30 years of experience in financial services working in a range of environments so you can be sure that your situation is in experienced hands.
Speak to our team
Visit our offices: 2 Southernhay West, Exeter, EX1 1JG
Beerstone Financial Services Ltd (542704) is an Appointed Representative of BrokerSync Ltd, which is authorised and regulated by the Financial Conduct Authority (1031981).
There may be a fee for Mortgage Advice. The precise amount will depend upon your circumstances and will be agreed upon following your initial meeting.
Investments, Pensions, Wills, Trusts, PMI and Estate Planning will be referred to our authorised third-party providers. Beerstone Financial Services Ltd and BrokerSync Ltd are not responsible for any advice received from the third-party providers.
Investments, Pensions, Wills, Trusts, PMI and Estate Planning will be referred to our authorised third-party providers. ABC Ltd and BrokerSync Ltd are not responsible for any advice received from the third-party providers.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.
Conveyancing, Wills, and some forms of Buy-to-let Mortgages and Commercial Mortgages are not regulated by the Financial Conduct Authority.
Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on a mortgage or other debt secured against it.'