A First Time Buyers Guide to Manchester

It may seem stressful at first, but buying your first house is the most exciting experience possible as you find the perfect property to make your own. There’s so much information to take on board that sometimes you can forget to enjoy the process, but with a little preparation, you’ll get there! 

Don’t be put off by scary words like ‘mortgage’ or ‘deposit’, it’s simpler than you think. With this helpful guide, you’ll be thinking about decor and fancy furniture in no time! From searching through Manchester removal companies to exchanging contracts, these steps will make you feel more at ease and increase your confidence moving forward. 

So, how do you get started? Well, first things first, the deposit.

Saving for a Deposit is Crucial

This step may seem daunting but it’s completely possible and, depending on your circumstances, doesn’t need to be rushed. Calculate your monthly wages, work out how much you spend and set yourself a realistic budget so that you can start saving as soon as possible. The more research the better as it’s good to know the most affordable places to buy property, especially as a first time buyer.

Generally, you’ll have to save at least 5% of the total cost of the house depending on the property and mortgage lender. If you’re browsing through properties already, work out how much you’d be willing to spend and how much of a deposit you can realistically save before you’d like to ideally apply for a mortgage. If you manage to save more than 5%, you’ll give yourself a wider range of cheaper mortgages to choose from.

Finding the Right Property

Now that you have a budget and price range it’s easier to look for a property. Always be realistic, but always look for the best you can afford. Be patient as you’ll most likely be viewing a range of houses until you settle on the final one or have your offer accepted. Compare and browse online, speak to a local estate agent, there’s a perfect house waiting to be your first purchase.

When putting in an offer, be confident, be firm but also be willing to compromise. Not everyone can get their first property at the exact price they want, but as a first time buyer with no property chain, you have the chance to keep negotiating until it’s close enough.

Finding the Right Mortgage

Whilst you’re saving, it’s wise to start researching mortgage options. Luckily, the First Time Buyer Home Show is returning to Manchester again this year to provide free advice. Take advantage of any opportunities like this that can help you with the process and give you a leg-up onto the property ladder.

When buying a house, you can either pay cash or use a mortgage as an aid. Along with the mortgage lender, you’ll have to work out an amount for each month to pay back the loan and interest. Work out how much you’ll be able to afford and keep this in mind when submitting an application, don’t put yourself under any unnecessary pressure. Don’t be afraid to look online for the best mortgage rates and deals in Manchester or even speak to a mortgage advisor.

When applying, you’ll need to provide evidence of any bills or living costs as well as your financial profile (e.g. bank statements and payslips). Securing an agreement in principle from the lender will speed up the process and will also help your case when communicating with estate agents.

First Time Buyer Schemes

Some good news! You don’t have to go through this alone. There are a variety of government schemes available to set you on the right path. From Shared Ownership to Help to Buy ISAs, you just have to do a little digging to understand which one would be right for you.

Help to Buy ISAs are offered throughout the UK to all first time buyers. To help you achieve a deposit for a house worth up to £250,000, the government will add 25% to your savings (up to £3,000). You can also combine this with another Help to Buy ISA if you’re moving in with another person.

If you’re looking to buy a new-build home valued up to £600,000, another alternative is a Help to Buy Equity Loan. You’ll need a 5% deposit and the government will then lend you up to 20%. You’ll also require a mortgage of up to 75% but you have to apply through a Help to Buy property agent to begin the process.

There is also the option of Shared Ownership where you can share ownership of a property with another party. You can buy between 25%-75% of the property’s value outright and then pay rent for the remaining amount. Keep researching different options until you find the one that suits you and your personal budget.

Don’t Forget About Stamp Duty…

Easily forgotten, Stamp Duty Land Tax is vital to consider when creating your budget. Stamp Duty is a tax paid when buying a property or piece of land over £125,000 in England, Wales and Northern Ireland. The rates all depend on the value of the property and so with a lower budget, a lower valued house is recommended.

For houses valued between £125,000-£250,000, the tax paid is 2%, whilst the tax for houses between £250,000-£925,000 is 5% and so on. However, first time buyers don’t pay tax on the first £300,00 so there is some leeway. To work out the cost of your Stamp Duty, there is a useful Stamp Duty calculator to get you organised.

…or Any Other Potential Costs.

I know what you’re thinking, “There are other costs?” Sadly, yes, but it’s all part of the process. For example, the mortgage lender may ask for a charge when entering into the mortgage agreement or you may have to pay for the valuation of the property.

After finding the right house, it would be wise to hire a surveyor to inspect the property before fully purchasing it. You’ll want to be made aware of any potential issues or damages to determine if it’s a good investment for you. The results can also help you renegotiate the house price with the seller. The cost varies depending on the surveyor and property but it can save you money in the long-run.

You’ll also want to hire a qualified conveyancer or property solicitor after finding a potential home so that they can conduct the legal aspects of the transaction. Comparing quotes from a few local removal companies is also advised to save you time and money on moving day.

Exchanging Contracts and Finally Moving in

It’ll seem like ages until you get here, but this stage is the most exciting. The signing and exchanging of contracts is done when all the legal aspects are finally complete and the remaining costs are paid. Then, at last, you’ve become the legal owner of the house. Once you receive the keys, it’s all yours!

Now you can think about packing,  making your home modern and designing it to your personal taste. This is when everything feels completely worth it and your dream of making a house a home can become a reality.

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