first time buyer help
r j f mortgages
First Time Buyer
Being a first time buyer it is easy for the purchase of your first home to become a stressful experience. At r j f mortgages we have been first time buyers ourselves and have helped many other first time buyers. We believe that the main cause of first time buyer stress is not being kept informed with what is happening, not knowing the process, not knowing what is going to happen next and also not knowing how long each part of the process takes.
Guidance
We understand the uncertainty of being a first time buyer and will therefore explain the whole process of your home purchase to you and guide you through everything you need to know. We will not simply advise on your mortgage and leave it at that. We are on call at all hours and can update you by text message or email as your purchase progresses. Similarly you can feel free to drop us an email or text with any questions and we are always at the other end of the phone for you. We have been known to respond to questions put to us at some very unsociable hours!
Your Mortgage Adviser
So you’ve found the perfect home and now need to find a way to pay for it. You will have already been speaking with the estate agents and will have viewed what seems like an almost endless list of properties. You may or may not have already spoken with a mortgage adviser. We believe it is a good idea to speak with an adviser first. This way you will have an idea of the budget available to you. And once you have found your property you will be in a position to move quickly and this is music to the ears of a seller and will make sure that they are more open to accepting your offer as you will look more serious. You may also want to think about the solicitor you wish to use at this stage. We can help you decide on your choice if you do not already have one in mind.
Decision in Principle - Now or Later?
Before looking for a property you may wish to obtain what is called a decision in principle from a mortgage lender. There are positives and negatives to doing this at this stage. First of all it is good because you will have passed a lenders credit scoring and therefore the rest of the mortgage application process can be a formality - although lenders can and do ask for more information following awarding of a decision in principle (DiP). The DiP can be shown to estate agents or sellers and shows your serious intention and ability to obtain finance. However, if this is shown to an estate agent, or an estate agents mortgage advisor obtains one for you, then not only will you know the maximum mortgage you can obtain and therefore your maximum budget but so will the estate agent. I’m not sure that this is a good way to start negotiating the best price when buying the property. Remember that the agent works for the seller and not for you. The DiP can also be used as a tool at an early stage for a mortgage advisor to get you to make a commitment to them so you may be pushed in to doing this too soon. One thing to bear in mind is that a DiP will leave a footprint on your credit file and if you do too many it may have a detrimental effect. Therefore i’m not sure it is such a good idea to do one at an early stage as a DiP does not last forever (anything from 1 to 3 months depending on the lender) and you may not be able to negotiate a price on a property before it expires.
Getting mortgage advice and the mortgage fact find
Our advice would be to speak with the mortgage advisor first to get an idea of what you can afford and how much it might cost you. The advisor will complete what is called a Fact Find and this helps them gather the information they need to make the best recommendations for you. The advisor will be able to give you quotes for the mortgage products that are available at that time. You should then go looking for a property.
Making your offer to buy a property
Once you’ve found the property that you think is right for you have a quick check with your mortgage advisor to confirm the costs involved and then make your offer. At this stage your offer may be accepted, rejected or the agent may ask to see a decision in principle. If it is accepted then proceed with a DiP and then full application. You will also need to appoint a solicitor. If it is rejected then consider moving on or negotiating on price - find out what the vendor is looking for - which can be easier said than done. Use every tool that you have, for instance, check how long the property has been on the market, what is the sellers position? Have they found somewhere to move to? Are they selling for any particular reason? If the agent asks for a DiP then speak with r j f mortgages. We will produce a DiP for you and make sure that the agent does not get to see the amount you can afford. The agent may say that you must speak with their own mortgage advisor before your offer will be put to the vendor. They may say that this is to “validate” your offer. We find this all a bit unsavoury and will speak to the estate agent on your behalf if you come across this.
Your solicitor
On the day that your offer has been accepted, you have completed a DiP and made your mortgage application we will need to know the name of the solicitor you intend to use and so will the estate agent. If you are unsure which one to use we can recommend one to you. We will only recommend one to you that we have used ourselves personally. The solicitor will ask you for a cheque to pay for searches. Recommendation is usually best and as with most things - you get what you pay for. Trying to save a few pounds on your solicitor can make things much more stressful. It is better to have someone where they will be the only person dealing with your case, you can contact them easily, they return your calls promptly (sounds obvious but not always the case) and keep you updated on a regular basis. Our recommendation does all of these.
Surveys
Before making your mortgage application you will need to decide on which type of survey you require. This is because when your application is made for the mortgage you may need to pay for the survey. There are a number of options with regards surveys. The minimum that the mortgage lender will expect is a simple valuation survey. This is the lowest cost of all of the surveys. The lender will insist on it as they want an independent party - the surveyor - to make sure that the property they are lending on is sound so that if the mortgage is defaulted on then they have a good chance of getting their money back when the property is sold. And you will have the pleasure of paying for it for them. The good thing with these surveys is that although they are mainly for the benefit of the lender then it means that they are also beneficial for you. This is because it means that someone is checking that you are paying the market rate for the property and not an inflated price. They are also checking that the property is OK and is not about to fall over or have defects that would affect the value. If the property does have major defects or is not worth what you are paying for it then the surveyor will advise the lender and the lender may not lend on it or may insist that certain works are carried out on it before they will lend on it. This can stop you making a big mistake.
The next survey is a building survey (sometimes called a homebuyers survey). The cost of these is higher than the valuation survey. With one of these you will get a report from the surveyor detailing any defects in the property - whether they affect the value or not. They will also advise any “features” of the property that are not up to current standards. For example they might say that the air bricks size are not up to current standards and should be replaced. Be warned that these surveys can throw up a long list of work that needs/should be done to the property and may put you off buying the property but bear in mind that the required works may not be affecting the value of the property. Take our example with regards the air bricks. A house that was built in 1920 has much smaller air bricks than one built in 1990. A survey carried out now may say that these air bricks therefore need replacing. Remember that the house from 1920 is still standing and may not have any damp problems. Some buyers use these types of surveys to reduce the price they are paying for a property and this can be a good tactic, but it can back fire and the seller might lose heart and pull out of the sale only to accept an offer from someone else.
Is that everything? How long will it take?
Once you have made your offer, it has been accepted, you have appointed your solicitor, you have decided on the type of survey you would like and your mortgage has been applied for you can now sit back and wait. Although we know that you won’t want to. We have completed home purchases in anything from 2 weeks to 26 weeks and if you reckon on it taking 12 weeks then you will not be far off. The lender may, and increasingly are, come back and ask for more information. This can be stressful but is becoming more common so try not to worry about it. Your survey may be carried out within a week of your mortgage application and your mortgage offer may arrive the following week. But if the lender does start asking for more information then it can take longer as there can be some to-ing and fro-ing. Once you have your mortgage offer then the rest is up to your solicitor and the solicitor of the seller. Being pragmatic at this stage does help but can be difficult. A couple of weeks before you complete on your purchase is a good time to look at buildings and contents insurance. r j f mortgages can obtain quotes for you and make sure that insurance is in place prior to you exchanging contracts with the sellers.
Anything else?
If you are a couple or have a young family then you may wish to consider taking out life insurance to cover those who are left should anything unfortunate happen. In addition to this you should look in to having a will made out. Your solicitor will be able to help out with this and they can cost anything up from £150 (June 2010) for a simple mirror will. The rules of intestacy are complicated and don’t just think that everything will automatically transfer to your wife/husband/partner/children - it is much more complicated than that.
Finally
Good luck!
The information contained within this website is subject to the UK regulatory regime and is therefore primarily targeted at consumers based in the UK.
The following is intended as a guide for first time buyers of what to expect when purchasing your home. It is meant as a guide only and is not exhaustive. Nothing replaces speaking with an advisor such as r j f mortgages when you are a first time buyer.
