If you are looking at purchasing your first house, there are many things which must be considered. For instance, the deposit you will need, the mortgage (and the different types of mortgages), whether or not stamp duty applies to you, any other additional costs and much more. In this blog, we will be going through some of the main points which should be considered.
Deposit
If you have started looking at houses, it is important to remember that you should be saving (or make sure you already have enough) money to ensure that you can cover the deposit for the house. The higher the deposit you are able to put down on the house, the lower your mortgage rates will be. Therefore, as a minimum, you should look to save at least 5% of the house’s total price.
In an ideal situation, you would most likely want to save around 20%-25% of the houses price to put down as a deposit, allowing you to access some of the best deals. If, however, you believe you won’t be able to save up a large amount for your deposit, it is worth checking with mortgage lenders, as some may offer lower deposit rates that are as low as 5%.
Mortgages
One of the main things which must be considered is a mortgage. Essentially, a mortgage is a loan given to you from a bank/building society to purchase a property. You must then ensure you pay them back on a monthly basis, with additional interest.
Of course, the more research you do into mortgages, the better deals you may be able to get. This is why you may want to look into getting a mortgage broker. Mortgage brokers can reach out to a multitude of lenders and possibly offer you a better rate. They may also have long relationships with these lenders, making them ideal if you are a first-time buyer.
When looking at getting a mortgage, lenders will have checks in place to ensure that you are able to pay the bank/building society back.
It is also important to know that there are different types of mortgages available, and there will ultimately be one that suits you the most. This includes fixed-rate mortgage, discount mortgage, tracker mortgage, standard variable rate mortgage, guarantor mortgage and offset mortgage. Of course, if you choose to go with a mortgage broker, these can be discussed further.
Stamp Duty
When purchasing a property, there will be other additional costs such as survey costs, solicitors/mortgage broker fee, moving costs, and possibly decorating costs. However one that you may not know about, and should know, stamp duty land tax (SDLT).
Stamp duty is only applied to those looking to purchase a property or land that is over a certain amount. Currently, in England, buyers only pay stamp duty for properties equal to or over £125,000. For commercial properties, this changes to £150,000.
For first time buyers, however, stamp duty is not paid for the first £300,000 (for houses worth up to £500,000). This means that you would only be charged for the portion of money left after the initial £300,000.
If you would like to find out more, please head over to Mortgages MK, where their friendly team will be happy to answer any questions or queries.