Venturing in to the property market like a first-time buyer can be a challenging ordeal – especially if you encounter one of the common pitfalls that await aspiring homeowners.
All hope isn’t lost, though, and with a bit of planning and preparation, buying the first home could be much less stressful and expensive.
Here, we explain 11 common mistakes that first-time buyers make and how to avoid them.
1) Not receiving an agreement in principle
While it’s easy to get swept up within the excitement of searching for a home, it’s important to work out your mortgage options first.
Before you start viewing properties, it’s a good idea to have an agreement in principle out of your lender.
An agreement in principle – also referred to as a ‘mortgage promise’ or ‘decision in principle’ – is really a certificate out of your mortgage provider which shows just how much they’re likely to allow you to borrow. They are valid for between 30 and 90 days.
While it’s not an official offer out of your lender, it offers a superior an accurate concept of your financial allowance, and may also reassure sellers and estate agents that you’re serious about buying and can realistically afford the property.
Failing to get a contract in principle can lead to disappointment, especially if you find a property you would like but can’t obtain a large enough loan to purchase it.
2) Underestimating how long it takes to get a mortgage
When it comes to obtaining a mortgage, unfortunately, there is no definitive timeframe for the application to become approved.
Although most borrowers can get to hold back around 18 to 40 days between submitting an application and getting a mortgage offer, it could take considerably longer.
It’s vital that you get your mortgage application process started just possible before rushing into making an offer on the home.
3) Not checking your credit score
Your credit score is essentially a financial CV that lenders will assess before deciding whether or not to give loan to you.
If your credit is poor, you run the chance of getting your application rejected. This might cause more harm to your credit score, as rejected applications will count against you.
It’s crucial that you look at your credit rating before applying allowing you to have the opportunity to correct any errors on your record and get your credit history in the best shape possible.
But even if you have a a bad credit score history with defaults or County Court Judgments (CCJ) in your file, it might still be easy to get a loan. You will discover how within our guide to poor credit mortgages.
4) Not being registered on the electoral roll
One from the easiest ways for a lender to verify your identity is check the electoral roll, so make sure you register.
Failing to do this may result in your application taking longer to process. On top of that, you can get your credit rating to consider a hit too.
Registering for that electoral roll couldn't be easier. All you need to do is fill out a short application on GOV.UK.
5) Underestimating just how much it is to purchase a home
Although your property will be the biggest expense, the cost of buying a house includes so much more.
Additional costs you’ll have to take into account including obtaining a valuation, legal fees, house survey costs and conveyancing fees.
On top of that, you should also consider your family bills you’ll pay as a homeowner which include things like contents insurance, buildings insurance and council tax.
It’s important to calculate just how much you’ll must have saved to pay for these costs so that you aren’t trapped financially.
6) Using the wrong solicitor
The vast majority of mortgage lenders possess a panel of solicitors who they are prepared to instruct.
If you decide to make use of a solicitor who isn't on their own panel, they might be unable to focus on behalf of the lender, meaning you’ll need to pay extra for just one from the approved solicitors to be instructed by them.
If you’re trying to keep costs down, look at your lender’s approved list before hiring a lawyer so you don’t end up paying more than you have to.
7) Not understanding the main difference between leasehold and freehold
Depending on whether you purchase a leasehold or freehold property, there may be limits on which you’ll be able to do with your home. You may also face extra fees.
When you purchase a leasehold property, you have the to reside in the house for a specific amount of years (specified on the lease) but you won’t own the land it stands on. You’ll need to get permission from the freeholder – the one who owns the land – before any alterations can be created towards the property.
Leaseholders also need to pay rent every year, which is known as ‘ground rent’ as well as other service charges. For some properties, these charges could be extortionate. Read more in Which’s exclusive investigation Inside the new home lease scandal.
If you purchase a freehold property, you’ll be the sole who owns both building and also the land it sits on. Like a freeholder, you won’t have to pay such things as ground rent, service charges or permission fees and you'll be responsible for the maintenance from the building.
It’s vital to know the main difference between these property types so that you aren’t trapped by unexpected costs and restrictions later down the road.
8) Doing no research in to the area
Before registering by having an estate agent or beginning to look online, it’s a good idea to exercise your priorities for the area you’d like to live in.
For example, do you want good transport links, plenty of green space, good schools or selection of amenities for example shops, restaurants and gyms?
Having a concept of the thing you need can help make selecting an area easier. Where possible, try spending each day approximately in areas you want, that you might not be acquainted with, to get a real feel for the atmosphere and just how good stuff link transport links are.
Our area comparison tool can help you compare a number of factors in various areas including average house prices, happiness ratings and Ofsted school ratings.
9) Purchasing a ‘non-standard’ property
When you’re looking for a home, there are certain properties to prevent if you want to easily obtain a mortgage.
For example, some lenders may be unwilling to grant a loan for flats above a shop or commercial premise.
This is because they're at and the higher chances to be impacted by such things as noise, smells and security issues that are beyond the owners' control and could negatively modify the value of the property.
The same goes for new-build homes – lenders in many cases are stricter with the amount they'll lend, so that they can protect themselves against the property losing value in early many years of ownership.
If you are thinking about buying a non-standard property, be sure to get just as much details about it as entirely possible that may help your mortgage application and seek expert mortgage advice too.
10) Not asking enough questions
Viewing properties can be an overwhelming process, so you’d be forgiven for attempting to make a deal on the first home that seems to tick all your boxes.
Rushing into making a deal, however, could leave you stuck in the home that needs expensive renovations and may cost you more in the long run.
So, before you begin likely to viewings, it might be helpful to draft a list of questions that you’d prefer to ask.
In every property, test out things such as windows, doors and lights, in addition to water pressure. Where possible look behind furniture and fabric that may be concealing any defects.
Do ask questions about the sellers too, for instance, how long they’ve lived at the property as well as their motivation for moving.
Finding out how long a house continues to be on the market can also be really useful. If the seller continues to be struggling to shift their home, for example, they may be open to accepting lower offers to create a quick sale.
Read our house-viewing checklist for any detailed list things to check whenever you view a house or flat.