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First Time Home Buyers – A Beginner’s Checklist

If you are thinking about getting your foot on the property ladder, then there are a few essentials to think about before deciding whether or not you have the funds to make that final purchase.

Buying a home is expensive. Obviously the biggest expensive is the property itself, but - as buyers quickly learn - there are lots of additional costs that are easy to forget about.

Although you will typically take out a mortgage to pay for your property, most banks or lenders - particularly posts the subprime mortgage disaster - will require a deposit. A deposit typically ranges from between 10 and 30 percent, depending on the economic climate, your monthly salary and the amount you are putting down as a deposit.

Getting this deposit together can be quite tricky and many people typically turn to older family members or relations for help. For example a UK property valued at £100,000 could require a deposit of up to £30,000, which for a first time buyer -typically mid to late twenties - could be quite difficult to find as salaries are typically average, if not low and many have racked up some kind of debt from higher education or other costs such as a car.

To add to this, many mortgage lenders charge a mortgage lender's arrange or application fee. This is the fee you pay for having the mortgage set up and typically costs can range from about £500 to as much as £2,000. Quite a lot considering it doesn't accurately reflect the true cost of setting a mortgage up.

Stamp duty, not something that's charged in every country, but something you could well come across basically entitles the government to a little slice of what you're giving to everyone else. For first time buyers, stamp duty isn't always an issue, depending on the value of the home you are buying.

Home insurance or home contents insurance is another cost to consider. Some mortgage lenders will insist that you take out a home insurance policy on your new property.

Expect most mortgage lenders to try and sell you their own policy or one that they are affiliated with. Generally speaking however, you can normally find a better deal by shopping around elsewhere. Typically most people pay a few hundred pounds for a home or home contents insurance policy. Even though this isn't a major cost, when compared to the cost of the property at least, be sure to do your research and find a policy that ticks as many boxes as possible.

Expect to find other costs in the way of estate agent's fees if you are selling, solicitor's fees. If the property is old, you may require an engineer or contractor to come take a look at it and give you an estimation of the costs involved to get it up to shape.

They will typically charge a fee, however may be willing to negotiate a little if it looks like you will be hiring their services in the future.

Jennifer Adams writes for a digital marketing agency. This article has been commissioned by a client of said agency. This article is not designed to promote, but should be considered professional content.

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