First time buyers: Five questions you should be asking

First Time Buyer Questions

Buying your first home can be daunting to even the most confident buyer, so make sure you do your research.

To help, we’ve pulled together the top five questions you should be asking yourself…

1. How much can I afford to borrow?

Traditionally, mortgage lenders determine the amount you’re eligible to borrow based on a multiple of your annual income. For example, if you earn £30,000 per year, and the lender offers four times your income, then you could borrow up to £120,000. There are of course other factors that influence this figure, such as  any loan payments and whether you’re in full time employment or self-employed.

Each application is unique, so there’s no one size fits all answer to this question. The best way to prepare yourself is to seek the advice of an independent mortgage advisor who can review your incomings and outgoings to give you an idea of the maximum amount you would be eligible to borrow, should you wish to continue your search for a new home.

2. Would I be happy here in the long term?

Try not to compromise too much just to get on the property ladder. That beautiful two-bed city centre flat may be perfect right now, but if you plan on starting a family in the next couple of years then you’re likely to outgrow it fairly quickly!

Try to think about your plans for the near future, including family, career and social life. If you’re new to the area, take some time to explore and get to know what would be available to you on your doorstep before making such a huge decision. 

3. What is included in the price?

Check out the specification of your potential new home, so you understand exactly what’s included in the sale. For example, Countryside homes come complete with integrated appliances, energy efficient LED lighting, brand new gas boilers, intruder alarms and heated towel rails (to name a few).

For older homes, it’s not that straight forward. The refrigerator, stove and washing machine could be freestanding and therefore not guaranteed to be part of the sale. The same goes for carpets, window fittings and even light fittings, such as chandeliers or shades.

4. Am I ready to buy?

There’s no deadline on what age you should be stepping onto the property ladder. Everyone’s needs are different, so it’s important that you’re ready to buy rather than feeling like you have to. If you want to buy, but aren’t sure you’re ready, then ask yourself a few simple questions:

  • Have you considered, and have funds available to cover, all of the financial aspects of buying a home, other than the deposit?
  • Have you factored bills, loan payments and any other frequent outgoings into your projected monthly budget?
  • Do you have a regular income that, as far as you’re aware, is unlikely to change in the near future?
  • Can you see yourself living in that area for several years?

If the answers to all of the above are yes, then you’re probably ready to take those next steps. Of course, it’s a decision that only you can make, so speak with a financial advisor before making an offer to be certain you can afford the monthly payments.

5. What if I have a poor credit score? 

A poor credit score will hinder your mortgage options, therefore preventing you from securing a favourable rate. However, a poor rating isn’t permanent.

There are steps you can take to improve your credit rating through proper budget management – this isn’t a quick fix, but over time your score will improve. To help you better understand the credit scoring process, we’ve pulled together the top five credit score myths for first time buyers.