First Time Buyers

Spring Incentives

It's that time of year again, spring is in the air. This means a clutch of offers and deals from builders trying to entice people onto the market.

If someone offered to pay your mortgage for 6, 12 or even 24 months it would be hard for anyone to resist. Builders have been known at this time of the year, to offer holidays, cash, white goods, carpets and curtains to persuade buyers to do the deal with them.

The problem is that many of these deals are aimed at inexperienced buyers, who may be encouraged to over stretch themselves. Many of the special extras are actually included in the price and only offer a short term gain.

These offers can prove to be irresistible to young buyers, who may be counting every penny at outset. You should scrutinise how much you are actually paying for any extras within the deal.

Some builders offer to pay your deposit of 5% and these can be a good way to get on the ladder. Others may help with Stamp Duty, cover early payments or even defer payment of deposit until you move and sell.

However, you should be aware that if you defer payments or deposits, these are taken back later. For example, if the builder defers a 5% deposit, they may take the equivalent share in the property. This could result in you having less equity than anticipated when you move on. The onus in these situations is on the buyer to look at the contracts.

Builders desperate to secure a sale, will often apply pressure, set closing dates or give an impression of high demand. Don't sign anything on the spot and always seek independent legal advice.

You should see a mortgage adviser and see if they can offer you any alternative ways of meeting your aims. They will have a wealth of experience and a host of special first time buyer mortgage packages that could help.

If you were buying white goods through the builder, would it be cheaper to take a personal loan.
The mortgage adviser may be able to raise you a mortgage between 97-100%. This could save you deferring any deposit.
They could recommend a special discounted rate mortgage, which would allow to accept less help from the builder.

First Time Buyer Tips

Many First Time Buyers find out about the buying process the hard way. There are a number of steps that should be undertaken before and whilst buying property…

Start researching mortgages early. Learn about fixed, capped, variable and discounted rates.
Visit a mortgage adviser and get three comparable mortgage illustrations. Make sure they abide by the mortgage code and do not hand over any non refundable arrangement fees.
Obtain three comparable quotes from solicitors. Give them an approximate price that you're considering and ask for a rough guide. Ask family and friends if they can recommend one, as this is normally a good start.
Have the necessary paperwork for your mortgage ready in a file. This will help speed things up, when you find the right place.
Insist that the agent stops marketing the property once your offer has been accepted. You will be laying out £600 before the deal becomes legally binding and you should see commitment from the vendor. Get a friend to enquire about the property a few days after, to check the agent is playing fair.

You should not rush the process of buying your first home, as it's likely to be your biggest financial decision you've ever made. Make certain of your facts and enlist professional help if necessary. By being well prepared, you'll stand a much better chance of succeeding.

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