Buying your first home is a huge step. It’s a big commitment, one that can dominate your life and your finances for many years to come.
But we’re here to help out, with 5 easy steps you can take to make the process as enjoyable possible, or at least… a little less painful.
1. Get advice from people you trust
Before you do anything else, speak to as many people as you can about their experiences buying their first home. Friends, family, colleagues, anyone who will talk to you. It’s not about “doing the done thing”, it’s about learning from the successes and failures of others, which will enable you to make a qualified, informed decision about how to move forward.
You might discover that buying a five-bedroom farmhouse in need of complete renovation isn’t the most sensible thing to do when it’s at the top of your budget! Or you might get a great recommendation for a mortgage broker or a property lawyer to help you complete the paperwork.
Once you’ve built a basic picture of how the process works, flesh it out with research online. There’s tonnes of useful, actionable information out there and numerous options available to you, including Help To Buy, shared ownership, equity loans, mortgage guarantees and other government-sponsored schemes designed to help first-time buyers get on the housing ladder. You can read our blog for more details on current government help schemes that are available. So make sure you research your options and find the best fit for you.
2. Talk to brokers
Brokers continue to play a big role in the property market, connecting buyers and mortgage lenders. The market is huge and the choice can be overwhelming, but a good place to start is Which’s guide to finding a mortgage broker. Ultimately the best introductions come through personal recommendations from friends and family, since they are tried and tested. You could even ask people on Facebook or Twitter. But if you’re struggling for inspiration, perhaps try one of the following names:
- CMME is a traditional mortgage brokerage that’s particularly good at helping self-employed people and freelancers.
- Habito is an innovative online platform with a hybrid offering that combines sophisticated algorithms with human advisors to find a mortgage that’s right for you.
- Trussle is another name that’s blazing a trail in the online mortgage space, helping first-time buyers and existing homeowners save time and money when trying to find a mortgage. It takes things a step further than other mortgage advisors by continuing to monitor your mortgage and helping you switch to a better deal later on.
If you’re self-employed, the traditional brokerage route can be the way to go. Brokers can help people with low incomes, or inconsistent cashflow by connecting you with specialist lenders who have more relaxed lending criteria, or are built to help people like you. Some challenger brands will even consider lending with less than 1 year’s earnings, or lending based on outstanding client contracts.
If you’re lucky enough to get help from your family, there are innovative products and mortgage structures that enable parents to act as mortgage guarantors, which means that their income can be taken into account by lenders when assessing lending eligibility and mortgage size.
The thing to remember here is that you don’t have to be in steady employment to get a mortgage, but keep in mind that if your finances are a little on the unconventional side, you might need to look for other/unique providers to get an attractive rate. Brokers can help you understand your options, and it’s best to talk to a number of different firms – and types of firm - to understand what’s possible.
3. Get your house in order
Once you know what’s required, you’ll need to get all the necessary paperwork in order. Things like ID documents, payslips, and sometimes documents relating to income, like tax computations and paper bank statements.
You can speed up the process by having these documents on hand already. This obviously saves time, stress and maximises your chances of getting a mortgage up and running as soon as possible.
4. Get a mortgage locked down before looking for a house
There are no hard and fast rules when it comes to looking for a house, but it’s sensible to have a mortgage in play before you start looking at houses and putting down offers. Getting a mortgage first also means that you have a clear sense of your budget, which will help to avoid disappointment for both buyers and sellers.
It’s heartbreaking to see people fall in love with a property, offer on it, only to be refused finance or miss out due to a hold up with the paperwork. It really is better to wait until everything is finalised and you have a mortgage in place, so that you can strike quickly and guarantee your perfect home.
5. Use technology to smooth the buying process
When it comes to buying your first place, technology is your friend.
Besides using the likes of Rightmove and Zoopla to search for houses, consider using online platforms to upgrade the buying experience. Shieldpay recently partnered with PPL to offer the UK’s first fully digital mortgage settlement. Our digital escrow facility means both buyer and sellers have full visibility over the status of funds at any point, plus house buyers can transfer funds to sellers, while paying fees to estate agents and solicitors in real time.
This is a fast and efficient way to achieve completion and it reduces the risk of fraud by verifying the identity of the parties involved. Money is held in an escrow account and released only when all parties agree.
Buying a home is probably the biggest purchase of your life. Hopefully, these steps can help streamline the experience so that you can focus on enjoying your new home. Remember, you're not alone. At Shieldpay we're here to help you enjoy the biggest purchases – and moments – of your life, stress-free!
We’d love to hear about your experience of buying a home. Leave us a comment or talk to us on Twitter. And if you want to hear from us a little more often, don't forget to subscribe to our newsletter.