Getting on the property ladder as a first time buyer is hard. Once you’re there it’s all peachy but getting there is another matter entirely.
Me and Andy are currently in the process of buying a house. I thought I knew the majority of things but, boy, was I wrong.
Hopefully this will provide some insight to those who are trying to get on the property ladder. Maybe I’m just slower than most and didn’t get this information, but if you’re like me and didn’t really have a clue then this is the blog post for you.
Here’s 10 things you may not have known.
1. It doesn’t stop at the deposit. So you’ve saved and saved for months or years. Putting something by and trying your best to get some sort of deposit (we were incredibly lucky to have some inheritance and help from family) and when you get to a reasonable amount you think “this is it, we’ve finally done it!” Uh uh. Wrong. Unless you’ve over budgeted and accounted for all the fees that go into buying a house you can say goodbye to some of that deposit you’ve made. Solicitors fees, mortgage handling fees, surveying fees. The list goes on! I would recommend putting a few grand by just to cover some of the fees.
2. Gazumping is an actual word and it can happen right up until the point of you exchanging contracts. Gazumping is basically where someone ‘steals’ the house off of you. I always thought once a property was Sold Subject To Contract (SSTC) that was it, it was yours. However that’s actually not the case. Someone can offer higher and if the seller wants to take it then you’ve lost out! It’s only officially yours when you’ve signed on the dotted line so try not to get your hopes up too high until you have!
3. Even if there’s no chain, it doesn’t happen overnight. It takes at least 3-6 months if not 8-10 or longer to go from putting an offer in to exchanging and then getting the keys. Most days are spent chasing solicitors and asking if anything is wrong!
4. If your offer is accepted by the seller, the property doesn’t get taken off the market. Until you have a mortgage in principle and enough proof that you can afford the property – that sucker will be sat on the market ready for anyone else to come take a look at. I had never even heard of a mortgage in principle before starting this journey and getting one sorted definitely aged me a few years.
5. Mortgage companies will scrutinise every bit of money you’ve ever spent. Why did you spend £3.45 on a cappuccino? Was it needed? Will that carry on every month when you have the mortgage? I see you went 12p into your overdraft 2 years ago, do you struggle with debt? Is that likely to happen again? It’s enough to make you never want to spend money ever again!
6. You have to look out for so many things in a prospective house – all of which the majority of the time you will forget to look at when you view. How many radiators? How many plug sockets? How old is the boiler? Is the double glazing breaking down? Does the front door have a 5 point lock? So many questions and only 20 minutes to answer them all!
7. To visit the neighbourhood of the house several times without looking at the property. Yes you most definitely look like a stalker driving around the estate several times and sitting in your car for an hour. This is the best way to see your prospective neighbourhood. Go at different times of day, how many children are there – does that bother you? How is rush hour? How are people interacting with each other? It gives you a good indication of how the street behaves and whether or not you feel like you’d fit in!
8. Help to buy schemes can really sting you if you’re not careful. Yeah, sure, an equity loan sounds great. But when do you need to pay it back? After 5 years the loan is at an interest rate at 1.75% and then goes up by about 1% every year afterwards ON TOP of your mortgage repayment. Ouch!
9. There’s so many different types of ownership on a property and it gets very confusing on which one is best. Freehold is your only guarantee of owning a property (once you’ve paid your mortgage!) but there’s also shared ownership, lease hold etc. So many to choose from and it’s such a minefield! The worst part is – you won’t know if it suits you until you’ve got it.
10. There are LOTS of different mortgages. Fixed rate, variable, tracker. There’s so many pros and cons to each and everyone will tell you different. We went for a 5 year fixed rate just for the comfort in knowing that we know exactly how much is coming out each month. If you’re feeling like living on the wild side go for a tracker – it may work in your favour (or not!)
Those are my 10 things I wish I knew before starting this crazy, stressful journey of being a first time buyer.
What advice would you give if you’ve been through it? Let me know in the comments!