Buying your first home together – what you need to know

If you’re looking at taking the plunge and buying your first home together, we have everything you need to make a start.

Buying first home together - A-Plan Insurance

Love is in the air! You’ve decided on a future together and want to embark on buying your first home. But buying a house is rarely stress-free – here are our tips on how to manage the house buying process and keep the love alive!

How much mortgage can I borrow?

Many first timers aren’t sure where to start, least of all against the current interest rate backdrop!

One of the biggest barriers to home ownership is the deposit. This is the down payment you make to the lender, taking out a mortgage for the remainder of the purchase price.

Most lenders require at least a 5 per cent deposit but there isn’t much choice of mortgage at this level right now, and you will pay a higher rate of interest than if you had a bigger deposit.

Once you have an idea of your deposit amount, find a ‘how much can I borrow’? online calculator to see whether you are in the right ballpark for the type of property you are hoping to buy (look at local property prices on apps like Rightmove or Zoopla to give you a guide).

This will mean sitting down together and listing out your joint income and outgoings, including loans, credit cards and bills. Download your wage slips and/or your proof of self-employed income and keep in a folder. It does feel tedious, but once you have this information to hand, it’s done. 

It’s worth reducing any unnecessary expenditure before applying for a mortgage, such as television subscription services or a gym membership that you don’t use. This will maximise the amount you can borrow.

This is also the time to investigate first-time buyer schemes, such as the First Homes Scheme.

You can also check to see how much stamp duty you will pay depending on whether one of you has previously owned a home. It’s good to know all this upfront to ascertain what you could afford.

It’s important to find a great mortgage broker

Speak to friends and family who are likely to recommend someone they have used. Mortgage brokers, like our in-house mortgage broker SPF, will run through your finances in finer detail and be able to hone in on exactly how much you could expect to borrow – and afford. They will also check your documents in preparation for a full mortgage application.

Your broker will help you understand the process but, generally speaking, lenders will lend three and a half, or four times income to someone buying on their own.

This is why many first-time buyers purchase with a partner, sibling, friend or parent so that more than one income is factored in when working out how big a mortgage you can get.

You’ll then be issued with Agreement in Principle to show to estate agents and start house hunting.

What should I know while viewing a house?

Research the area before you attend a viewing. It could be a catchment area for a good school, which means stiff competition and higher prices.

Check Google Earth for open spaces and note areas of concern. Drive around the area during the day and at night.

The house viewing will last around 20 minutes. Sometimes you may need to bid before a second viewing depending on the housing market where you live. In short, be prepared and ask questions:

  • How long has the house been on the market? Be wary of any major issues but keep an open mind – it could mean an offer below the asking price is accepted.
  • Are there any offers on the property already? Some agents will try to push you to offer immediately. Don’t get drawn into a bidding war if the property already has an asking price offer on it, see our blog on ‘gazumping’.
  • Has any work been done to the property? It’s important to know whether the work was done professionally or DIY and adheres to planning permission or building regulations.
  • What’s included? That beautiful double range oven may fit the space perfectly, but don’t assume it’s staying. The same applies for those curtains. If you aren’t sure, ask.
  • Any problems? Look (and smell) for signs of damp or mould. And ask about whether there are problems with neighbours, or within the local area – and trust your instincts.
  • What is the broadband speed? Vital, especially if you work from home.
  • Is the property in a chain? This may not be a problem if you are willing to wait.
  • Find out utility charges! These days it can make a big difference. Find out what the current owners currently pay for gas, electricity – and council tax!

How do I make an offer on a house – and what happens next?

You’ve found the house of your dreams and you want to make an offer.

At this stage, recheck your affordability. You’ll then contact the agent – call them to ensure they are aware of what you would like to offer. They may then also request it in writing.

Don’t apologise if your offer is below the asking price. It is based on what you feel the property is worth and what you can afford. State that your offer is:

  • Subject to contract – i.e. the final sale takes place only when lawyers have exchanged legally binding documents.
  • Subject to survey – this allows for the cost of any faults or issues to be taken into account once your surveyor has checked the property.

Estate agents are legally obliged to send your offer to the seller for consideration. This can go back and forth until the seller agrees to a final sale price and takes the property off the market.

Once accepted you will need to instruct a conveyancer (a house buying solicitor). Your estate agent should recommend one, however you are free to choose whoever you wish. We would suggest you obtain three quotes leading up to this as prices can vary – but also be guided by recommendations.

Once you know exactly how much you need to borrow based on acceptance of an offer, your mortgage broker will guide you through the next steps in terms of which mortgage product to opt for, the fees involved and how long the offer is valid. They will then process this to a full application to the bank or building society lending you the money.

What’s the difference between a search and a survey?

Searches are conducted by your conveyancer to include:

  • Checks to the Local Authority to ensure there are no plans to build a motorway behind the house, as an example.
  • The local water authority will confirm flow of water to and from the property, positions of pipes and drains and whether the property is on a meter or rates.
  • Whether the property has been built on a landfill or a known flood area.

Surveys are instructed by your mortgage provider, to check that the property is worth lending against. They include:

  • A basic report detailing the value of the property. It may make some comment about the physical condition of the property and should identify any obvious physical defects that may affect the value. This is more suited to new builds or reasonably new homes in good condition.
  • A Homebuyers Report is a more thorough report that will assess the same areas as above and also offer an ‘insurance reinstatement value’ (i.e., what it would cost to rebuild if it burnt down).
  • They may also conduct a detailed structural report that will look at all areas of the property including any cellars and attics and will offer advice on suggested repairs including costs involved, timescales and what may happen if improvements aren’t made. This type of survey is most useful for properties that are very old, unusual, timber-framed or have a thatched roof.

Although the process feels overwhelming at the start, your mortgage broker, estate agent and conveyancing solicitor are there to guide you through it. Even your local A-Plan branch is on hand to help you organise buildings, contents, and life insurance as part of the process.

Before you know it, it will all be a distant memory as you set about enjoying your future together in a new home.