MÔR MORTGAGES FIRST TIME BUYERS GUIDE

Here's a comprehensive checklist for first-time home buyers, covering key steps and considerations, the mortgage broker elements are highlighted for clarification:

Financial Preparation

- Assess Your Budget: Review your income, savings, and monthly expenses.

- Check Credit Score: Ensure your credit rating is healthy for mortgage approval.

- Save for a Deposit: Aim for at least 5-20% of the property's price.

- Government Schemes: Research options like the Help to Buy - Wales scheme.

- Solicitor/Conveyancing Fees: Set aside funds for legal fees. See below.

- Survey Costs: Plan for home survey fees to assess the property condition. See below.

- Stamp Duty (or Land Transaction Tax in Wales): Check if you qualify for first-time buyer relief on Stamp Duty. In Wales visit https://www.gov.wales/land-transaction-tax-calculator to calculate the Land Transaction Tax (LTT) you will potentially have to pay.

- Mortgage Broker: Engage with a mortgage broker to find the best mortgage deals. It would also be prudent to add mortgage or income protection and life insurance into your considerations. A mortgage broker would be able to deal with this for you.

Mortgage Process (completed by the Mortgage Broker)

- Get a Mortgage in Principle: Secure a document to show sellers your mortgage approval.

- Choose a Lender: Compare rates from banks, building societies, and credit unions.

- Mortgage Approval: Submit the required documents to your lender (proof of income, ID, bank statements).

Protection Process (completed by Mortgage Broker)

- Get a quote from protection provider via Mortgage Broker: Check over the quote. Ensure the details and amend if necessary

- Finalise and agree quote: Mortgage broker will accept quote after consultation with you. Once agreed the policy becomes active and you pay a monthly premium as your would with most other insurance policies. Cover can start as little as £5 per month on some policies (age and health dependent) so great peace of mind if unable to work for any length of time.

Property Search

- Determine Location: Choose a location that suits your lifestyle and budget.

- Research the Market: Look at property prices and trends in your desired area.

- Work with an Estate Agent: Register with local agents who understand the area.

- View Properties: Visit multiple homes to assess their suitability.

- Check Local Amenities: Ensure proximity to schools, transport, shops, etc.

Legal Considerations

- Hire a Conveyancer or Solicitor: They will handle legal aspects like contracts and property searches. There is a good chance that your mortgage broker could recommend a conveyancer as they deal with them daily. Ensure that you do your own research and seek comparable quotes.

- Conduct Searches (carried out by conveyancer/solicitor): Includes local authority searches, water, environmental, and planning searches.

- Check Leasehold vs Freehold (carried out by conveyancer/solicitor): Understand the differences and implications for costs and ownership.

- Review Contracts (carried out by conveyancer/solicitor): Ensure the contract is clear and covers everything agreed upon.

Property Surveys

- Choose the Right Survey: Decide between a HomeBuyer Report or full building survey depending on property age/condition. Your mortgage broker can advise on this and what is best for your situation.

- Review Survey Findings: Use the results to negotiate any repairs or price adjustments with the seller. 

Offer and Exchange

- Make an Offer: Make an offer based on your budget and property market research.

- Negotiate: Be prepared to negotiate on price and any conditions with the seller.

- Get a Formal Offer: Wait for your lender's formal mortgage offer after valuation. You and your mortgage broker will receive the offer to check and confirm.

- Exchange Contracts: Sign the contract to officially secure the property. At this stage you will pay any deposit on the property which would have been part of the contract and mortgage process between yourself and the mortgage lender. This transfer will take place through the conveyancer or solicitor.

Completion

- Transfer Funds: Your conveyancer or solicitor will arrange the transfer of funds to the seller.

- Pay Land Transaction Tax (LTT): Ensure you pay any applicable taxes for Wales. This will be part of the process arranged between yourself and the conveyancer or solicitor.

- Get the Keys: Once funds are received by the seller, you can collect the keys and move in.

Moving In

- Arrange Utilities: Set up gas, electricity, water, broadband, and council tax.

- Home Insurance: Secure buildings and contents insurance for your new property. Your mortgage broker may be able to provide quotes for this. Ask them as part of their duties.

- Prepare for Moving Day: Hire a removal company or rent a van, and notify utility companies of your move.

Settling In

- Change Your Address: Notify banks, your employer, doctors, and other services.

- Council Tax Registration: Register for council tax in your new property.

- Explore the Community: Get familiar with your local area, neighbours, and amenities.

Ongoing Considerations

- Amend or arrange a will – as a new homeowner you want to make sure that your new home would be left to family or loved ones in the event of something happening to you. Your mortgage broker would be in a position to recommend a will service or solicitors to compile a will on your behalf.

- Diarise when the fixed period of your recently arranged mortgage ends typically 2, 3 or 5 years from the start date. Then add a further diary entry 6 months prior to that date to contact your mortgage broker to start looking for the next mortgage deal.

By following this checklist, first-time buyers can ensure a smoother home buying process and avoid common pitfalls.

For any questions regarding any of the above contact the writer ian@mormortgages.co.uk