Recent changes to the stamp duty threshold have attracted a growing number of enquiries from first-time buyers looking to take advantage of this short-term tax break in order to get their foot onto the property ladder.
This is a great time for first-time buyers to take the leap but as we continue to operate in a transitional lending marketplace, there are still many things to consider.
With that in mind, here are some tips for those taking their first steps into homeownership.
Limit other financial commitments
Let’s start with a simple piece of advice. If you are a first-time buyer considering purchasing a new car and a new house – purchase the house first.
Financial commitments such as car finance repayments can quickly limit affordability on first-time buyer applications.
Share and declare
First-time buyers should also be aware that they need to declare ALL credit commitments. Income and credit-related scrutiny has, quite rightly, been ramped up from a lending perspective in recent times and clients must share all relevant financial commitments.
Student loans
An area highlighted by one of our top advisers is first-time buyers can often overlook student loans as being a credit commitment, as these are automatically deducted from pay packets.
However, most lenders will include this in their affordability calculations.
Save on a surveyor
It is often not necessary to instruct an independent surveyor for a Home Buyers Report and savings can be made by using the lender’s valuer to complete the report. There are pros and cons to this, which any good adviser can walk you through.
Hire a good conveyancer
When purchasing the biggest asset of your life, invest in the right professionals and undertake some due diligence. Online conveyancers can appear to be a good low-cost option but may not necessary be the best option as this is purely a process-driven approach. As opposed to a solicitor which acts in your best interests and provides professional advice.
Obtain independent advice
An estate agent’s in-house broker can offer a simple solution to keep the mortgage and purchase with the same company. However, these are rarely independent ‘whole of market’ brokers and tend to work from a restricted panels of lender.
This may limit your mortgage options and you may not get the best deal or most suitable mortgage.
And finally….
Just to reiterate that this is great time for first-time buyers in the right financial position to take the plunge but the importance of good, professional mortgage advice should not be underestimated in what remains a challenging time for many.
Dale Jannels is managing director at Impact Specialist Finance
