In January of 2016 we moved into what we hope will be our “forever home”. It was a hefty purchase and not one we took lightly. However, it wasn’t our first home and so we had the luxury of hindsight when preparing to buy this time around. Getting on the property ladder early is no mean feat, but its something I have always felt strongly about striving for.
Despite what many still seem to believe, its not just as easy as filling in an online application and voila – mortgage approved – time to start house shopping. So here are a few tips on things to consider before buying your first home.
Manage You Finances
Your first stop is to get your finances in order. You need a good credit history in order to get a mortgage. That doesn’t mean ditch all credit cards, in fact having a credit card and ensuring its paid off in full monthly works in your favour. Make a note of any loans you may have, whether it be from the bank, finance on a car or finance from any large shop purchases. If you can manage to pay any of these off before you apply for a mortgage you will be much better off. In our case, we paid off the finance on Jonathan’s car which gave us quite a large increase in what the bank was willing to offer us.
Once you have control of your finances, work out what you can afford to spend monthly. In that you should consider it needs to include gas/electricity, council tax and your mortgage. If you’re buying a flat you may need to pay a factoring fee for maintenance of the shared areas. You can then start to get to know the mortgage industry. There are different types of mortgage, different banks off different rates. It is always changing so stay up to date on what is going on.
For us, prior to looking at houses we found it helpful to get mortgage pre-approval from the bank. That way we knew they would offer us a loan and for how much. Be cautious though, the bank may be offering you more than you can realistically afford to repay. Its very easy to get swept up in the excitement but stick to your budget.
Know the difference between wants and needs
Know what you need to have – for us it was minimum 3 bedrooms as I was pregnant with Piglet and we hope to extend the family again eventually in the future, and a garden for the dog. It had to be in a good schooling area but bus links to town and have a driveway for at least one car. But what did I want? I wanted 4 bedrooms, 2 living spaces, a large dining kitchen and a wood burning stove in a detached. I wanted large rooms in a modern building. As you can imagine – we had to compromise.
We got everything we needed in an excellent area of town. We just have the 3 bedrooms and its an old 1930’s house, but it’s detached and we have 2 living rooms. The bit that nearly stopped me being interested was the fact that the kitchen is small and dark and there’s no space for the table. We decided that we could make it work – the house is a definite fixer-upper. We put less into our deposit and saved some money aside to do some internal work. We’ve got a building warrant in for approval to take a few walls down and change the downstairs layout completely. We can make the house exactly what we want (complete with wood burning stove!).
Go and see as many homes as you can. Don’t write a place off just based on its pictures online, looks can be deceiving. Look past the current owners furniture and decor – a bit of fresh paint can go a long way in brightening a place up.
Making an Offer
So here the rules of negotiant differ in Scotland than elsewhere. We tend to operate an “Offers Over” system, where the seller prices the property at the lowest amount they could accept and you are expected to place an offer above that amount. However, the oil and gas industry is struggling right now so here in Scotland things are a bit upside down. Our property had been on the market for over 6 months, we opted to take a risk and offer below the asking price. After a bit of back and forth with the sellers we reached an agreement.
In England I believe it is an asking price, and it is a sort of unwritten rule that the price is slightly above what the seller is expecting to receive as the expectation is that buyers will bid under it. You don’t want to offer too low – you risk someone else coming in with a higher offer and it being accepted before you can up your offer. You also may annoy a seller, and if there are multiple interested parties they may exclude you from their consideration if they think you could be trying to take advantage. Make sure your offers are realistic and reasonable.
You may not get the first home you make an offer on…… you may not get the 5th either. Its a tough industry to crack, but eventually you will get the home that is right for you.
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