5 Essential Questions for First-time Buyers
A comprehensive list of the most important questions to ask yourself when taking out your first mortgage
When you’re buying a home for the first time, everything is new.
I work with lots of first-time buyers and if I could choose one word to describe them all when I first chat to them, it would be “overwhelmed”!
No matter how financially savvy, or organised my lovely clients are, they are always exhausted by the amount of information they’ve been taking in. Until they work with us and realise how straightforward it can be!
So, what makes buying your first property so overwhelming?
Because you don’t know what you don’t know!
And that can leave you feeling vulnerable, which is a horrible feeling when you’re making a huge financial commitment.
As a mortgage broker, I don’t consider my job to be done properly until my clients feel confident and informed about their choices. But what if you’re not using a mortgage broker? How can you find some confidence in the process and avoid some of the overwhelm?
Here are 5 things I always discuss with first-time buyers during our first conversation. By spending some time answering these questions, you should find more clarity.
If you’re interested in finding out how we can help, check out our first-time buyer mortgages page on our website.
1. What are my future plans?
When you’re planning on buying your first house this is a great question to begin with. Why? Because it gives a longer-term context to your financial plans, rather than just what you need right now. It also gets you thinking about where you physically want to be and what the role of your first property will be.
Here are some prompts to get you thinking:
- Where do you plan to be living in 5 years?
- What are your job plans over the next 5 years? Do you think your income will increase or stay the same? Perhaps it will drop if you’re planning to retrain. Could a change of job mean a change of location or a more expensive commute?
- Are you planning a change in your household size? – e.g. moving in with a partner, having kids?
- Have you got any plans in the next few years that might require access to a lump sum of money? These might be things such as travelling, further education, a wedding etc.
There are no right or wrong answers to these questions. They’re designed to help you uncover the sort of property or mortgage that suits your unique plans rather than just your current situation.
2. What’s my credit score and history?
Mortgage lenders are inclined to offer mortgages to customers with the lowest risk. Before applying, it’s best to check that your finances are in the best shape possible. And for this, knowledge is your friend!
So where do you find this knowledge?
There are 3 main credit score providers who all offer a similar service – Experian, Equifax and Transunion. Once you sign up and fill in your details, they provide you with a score and a credit report. If you work with a mortgage broker like us, there is a more thorough version that we will ask you to use, but these give a good indication.
The score is interesting as a bit of a snapshot, but it’s the report that’s most informative. It helps you understand how to address potential credit issues (such as old debt that you might have forgotten about) and identify risks before approaching mortgage lenders.
If you’re concerned about your credit score or want to know how to get your finances in better shape, then take a read of our blog all about getting a first time mortgage with bad credit or get in touch with us for a no obligation chat.
3. Have I accounted for all the costs of buying a house?
No-one likes nasty surprises. Realising you need to pay for something unexpected can make moving house even more stressful. I always check that my clients have worked out the full costs of house-buying before we start looking at affordability.
When you’re a first-time buyer, you probably don’t know what costs to expect, so here’s a list of most of the common things you need to budget for:
- Stamp Duty (although if your new home costs less than £425,000 first–time buyers don’t need to pay this)
- Home removals
- Buildings Insurance (and possibly Contents Insurance too)
- Buildings surveyors
- Legal fees
- Mortgage fees
- Delayed rental deposit
- Renovation costs before moving (depending on the property you’re buying)
- Mail redirection
- Storage costs if there’s a time gap between properties
Which? estimates that the average cost of moving home for a first–time buyer in the UK is around £2,0001 and you can find their article “The cost of buying a house at this link”.
4. What can I afford to buy?
The million-dollar question! The answer boils down to 3 questions:
- How much deposit can I put down? Calculate what savings you have or any parental gifts/inheritance that is being contributed. Make sure you deduct the costs you’ve estimated in question 3, as well as any lump sums of money you might need in the near future (e.g. for a wedding etc). This will give you a rough figure that you can give to mortgage lenders.
- How much can I borrow as a mortgage? Different lenders will have different lending criteria, but you can get a rough estimate by using a mortgage calculator like this one from the Money Saving Expert. If you work with us, we’ll go into even more detail with lenders which will give you a more educated estimate.
- What mortgage payments can I afford each month? This requires you to think in detail about your monthly outgoings so you can see how much you have available for mortgage payments. It’s important to be honest with yourself about your outgoings – not just thinking about bills, but about your lifestyle, spending and hobbies.
Affordability can be fiddly to work out so it’s one of the main reasons first-time buyers work with us. We’ll work through each of these points in detail so you have a clear idea of what kind of property you can afford. We’ll also research all the different lenders on your behalf to find the best deal.
5. Am I eligible for any government schemes?
First-time buyers who are over 18 and earn £80,000 or less per year may be eligible for the First Homes Scheme. This allows you to buy a home for 30-50% less than its market value.
If you’re buying a brand new property, there may be some schemes offered by the building company. It’s worth checking what’s available in your area.
Home buying schemes can offer some great financial alternatives for first–time buyers. Bear in mind that they’re not right for everyone and there might be other mortgages that suit your circumstances better.
If you need help understanding if these schemes could help you, then get in touch and we’ll help you weigh up the benefits.
How our team helps support first-time buyers
“Clara made the process easy and understandable”
Here’s what you can expect from us if you decide to use a mortgage broker to find your first mortgage:
- We’ll start by going through all the questions covered in this blog to get a clear picture of your individual needs.
- We’ll take care of researching a comprehensive range of mortgage lenders and will come back to you with a list of options which we’ll chat through together.
- Once you’ve decided on your mortgage lender, we’ll take care of the application for you right through to completion and liaise with them on your behalf.
- We’ll also give you advice on buildings insurance and any personal insurance you might need, taking care of the applications for those too.
- We’re on hand to answer any questions, however small, to make sure you’re confident and happy with the decisions you’re making.
If you want to find out a bit more about us, then take a look at our website and get in touch for a no obligation chat.
Other first-time buyer content we’ve written
Blog – Can I get a mortgage if I have bad credit
Blog – Buying your first home
Legal bits we need to tell you
The information contained within was correct at the time of publication but is subject to change (August 2024).
Please note for all mortgage products, terms and conditions apply. This information is a summary only. You will receive full documentation upon application which sets out the terms, conditions and limitations of lending provided.
YOU HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.