Essential Tips for First Time Buyers
Buying a property for the first time can seem daunting. To help you prepare, in this article, Laura Veal from our Residential Property Team outlines some important considerations and simple preparatory steps you can take to aid the smooth progression of your purchase.
Finances
It is important you prepare financially for your purchase at the earliest opportunity. In addition to applying for your mortgage at an early stage, you should ensure you supply your proposed lender or broker with any additional information they request or additional documentation they require as soon as possible.
It is also key to ensure that your deposit funds are held in an accessible account in readiness for when these are required. If you are purchasing with funds held in a help to buy ISA, you should ensure you comply with the scheme rules so that there is no issue or delay in obtaining funds.
Your conveyancer will need to carry out a review on the funds you are providing towards your purchase and you can assist with this process by providing relevant financial statements and evidence of these funds at the outset. You will need to be able to provide both proof of funds and evidence as to the source of these funds. Your conveyancer will then be able to guide you as to what further evidence or information may be needed. It is important that any additional information requested is provided as swiftly as possible.
Be prepared for all costs
In addition to the deposit you are paying towards the property, you will also need to factor in payment of your legal fees and expenses. Your conveyancer will be able to provide you with a quotation for these at the outset. There are however some other expenses which you may not have anticipated but which you may need to budget for. For example, some mortgage lenders require fees to be paid upfront and you may also need to pay your mortgage broker. Your mortgage broker or lender will be able to provide you with details of these. A survey on the property you are purchasing may also be an additional expense and your surveyor should be able to provide you with costings on this aspect to enable you to budget. Additionally, if you are purchasing a leasehold property, it is likely there will be fees payable to the freeholder and/or management company on completion, such as their administration fee to register you as the owner of the property following completion. If the property you are purchasing is one which has an obligation to pay service charges or ground rent, you may also be asked for some additional funds on completion towards these.
Stamp Duty Land Tax
If you are purchasing your first property, there are currently some specific stamp duty land tax reliefs which you may wish to consider. To be eligible for these reliefs, all purchasers must be first-time buyers. If the relief applies and you are purchasing a property with a purchase price of up to £425,000, no stamp duty land tax is currently payable. If the relief applies and you are purchasing a property with a purchase price between £425,001 and £625,000, the rate of 5% is currently applicable on the portion of the purchase price falling between these two sums.
How we can help
Here at Barker Gotelee, our knowledgeable, responsive and friendly Residential Property Team can help you successfully navigate the process of purchasing your first property and answer any questions you may have.
This article is for general information only and does not constitute legal or professional advice. Please note that the law may have changed since this article was published.
