Mortgage lenders have traditionally tried to attract first-time buyers with discounts that encouraged them to put that first tentative foot on the property ladder. Pre-recession, first-timers might only have needed a 5% deposit. There were even no-deposit mortgages on the market, such was the level of enthusiasm for first-time buyers, who have none of the problems associated with selling a house to contend with.
Economic meltdown put paid to such practices, with lenders growing ever-reluctant to give mortgages to borrowers unless they meet strict criteria. A deposit of at least 25% is now the norm, although there are signs that the 100% mortgage could return once the growth does. Even so, the smaller the deposit, the higher rate of interest you’ll end up paying, so it’s advisable to save up as much of a deposit as you can.
If you can’t afford a mortgage on your own, shared ownership and shared equity schemes could be ideal for you. It’s a big commitment, so don’t enter into it unless you know and trust your partner well. It’s imperative that you make all the mortgage arrangements before you start looking at properties. Estate agents will take you more seriously if you have secured a ‘decision in principle’ from a lender. Use a reputable firm such as Santander – visit their website for whole range of Santander mortgages.
Use a licensed conveyancer or solicitor. Research thoroughly online or, even better, go on a recommendation from someone you trust. A slow solicitor can really make the process drag on, so you need someone with a reputation for moving fast.
Never bid too low. Tempting as it may be to go in with an aggressively low bid, bear in mind that the chances of being gazumped are increased. You don’t want to insult the seller as they may go off you out of sheer resentment. Get an independent valuation done, and consider whether you really deem the property worth that figure.
Try to establish a good relationship with the seller from the outset. Are they intending to move quickly? Or do they have a new job that doesn’t start for months (meaning you’ll need to stay somewhere in the meantime). Temporary accommodation can be an expensive hassle, so if you’re on a tight budget you should look for sellers who have a compelling reason to move right away and who have already sold their home. This incentive to get off the market as quickly as possible can work in your favour. Once the process starts, keep in touch with all parties concerned for regular progress updates.