Getting ready to buy your first home

I’m buying my first home – what do I need to know?

Buying a home is one of the most expensive purchases you’ll ever make and so purchasing your first property can be both exciting and daunting at the same time. There are lots of moving parts when it comes to buying a property so it’s important you have a good grip on the process when you start.

Here’s what you need to know when buying your first home:

How much deposit will I need?

First of all, you’ll need to save up a deposit. Generally, you’ll need a deposit of five to 10 per cent of the total cost of the home you’d like to buy. For example, if you want to buy a home costing £200,000, you’ll need to save at least £10,000. However, saving more than five per cent will help give you access to a wider range of mortgages, often at a lower interest rate, so it’s worthwhile saving as much as you can.

Calculating your monthly repayments

As a first-time home buyer, it’s crucial to figure out if you can really afford to take the plunge. Put together a budget before you start looking for a property so you know what your monthly repayments will be. It’s not just mortgage repayments, you’ll need to take out home and contents insurance, and still need to cover your everyday costs such as utilities, food and travel. Mortgage affordability calculators are easily available online, as well as template monthly budgets.

You should also take into account additional one-off costs, such as conveyancing fees, furniture removal and moving-in costs as well as furnishing or decorating your new home.

Land and Buildings Transaction Tax (previously known as Stamp Duty) for first home buyers

Land and Buildings Transaction Tax (previously known as stamp duty) is the tax paid on residential property purchases. As a first-time buyer, you will typically pay less of this tax than everyone else, but that amount depends on the value of the property you’re buying. In Scotland, you’ll pay no duty on properties up to £175,000, if you are a first time buyer.

Speak to a mortgage broker

Speak to a mortgage broker or independent financial adviser – they will be able to help you figure out how much you can borrow and what type of mortgage will suit you best. You can also apply for mortgages directly from a bank or building society.

Your adviser will make a mortgage recommendation and, if you’re happy to proceed, will go about securing your DIP (Decision in Principle). Your DIP is a promise from the lender that they’ll grant you a mortgage for that amount, on the condition that the information you’ve given is correct.

Do your research

Once you know how much you can afford, you can start your property search. Local estate agents will be able to match you with properties they have and give you specific local advice. When you’re viewing, remember to ask comprehensive questions about the local area and amenities, and the condition of the property.

McSherry Halliday has a variety of properties for sale both in Ayrshire and all across Scotland. If you’re looking for your ideal home, please come in to one of our offices and our expert team of property professionals will be happy to help.