Buying their very own home is every individual’s dream. But, whether you are a first-time buyer or a seasoned investor, the process of buying a new home can be pretty daunting. From finding the right estate agent to saving enough money for a deposit, there is so much involved in buying a new property! For a first-time buyer, the process of buying a new home sounds exhausting! So, if you’re thinking about buying your first home in central London or anywhere globally, here are the five steps you need to follow to buy your first house in 2021.
1. Decide on a budget
You need to know exactly how much you can afford to spend on your new home. It would be best if you sat down with a financial planner to figure out how much money you can comfortably pay for your new home. At the end of the day, you don’t want this property investment to burn a hole in your pocket. Deciding on a budget is very important because you can let your estate agent know exactly how much you plan to spend on your new home. The general rule of thumb is that your mortgage should not be more than 40 per cent of your total monthly income.
2. Save for the deposit
Before you even start looking for a new home, you need to start saving for the deposit. Usually, the deposit is around 20 percent of the total value of the property. This is where the budget comes into play. Depending on the budget for your first home, you need to set aside a few thousand pounds every month so that you can use that money as a deposit. After all, how many of us actually have thousands of pounds just lying around to use as the deposit? Therefore, it is highly recommended that you start saving for a deposit at least one year before you start looking at potential properties.
- Get pre-approved for a mortgage
Nowadays, most sellers and estate agents won’t take you seriously until you have been pre-approved for a mortgage. Getting pre-approved for a mortgage means that a bank or a lender is willing to lend you a certain amount of money to buy your new home when the time comes. One important reason you should get pre-approved for a mortgage is that you will understand precisely how much you can spend on your new home. Usually, banks and lenders look at factors such as credit score, annual income and income stability to determine your ability to pay back the mortgage. Therefore, it is recommended that you start working on improving your credit score at least 6 to 8 months before applying for a mortgage pre-approval.
- Find the right estate agent
While some individuals might prefer to find their dream property on their own, first time buyers should get in touch with experienced estate agents. So, if you’re looking to buy your first home in Surrey, then you need to get in touch with trusted estate agents in Surrey. Speak to various estate agents until you find the right estate agent for your needs and requirements. It is essential that you find an estate agent with whom you can communicate quickly and openly, making the process of buying a property so much easier. Don’t be afraid to ask your estate agent questions – you and your estate agent must be on the same page. Remember, an estate agent is an expert in the art of negotiation, so he or she will be the best person to help you find your dream home and will probably even help you and the seller agree on a good valuation!
- Start house hunting
Don’t fall in love with the first property that you walk into! You need to see multiple properties before you can even shortlist a few properties that you actually like. Make sure to write down some notes about the various properties, features you might have liked or disliked because you might get confused after a few open houses. Once you’ve seen a few places, refer to your notes to help you shortlist a few properties. Then, re-visit these properties and continue the process until you find a house that meets all your needs and requirements. It would help if you thought of your first home as an investment, so you should not be making an emotional decision. Once you have decided on the property that will be your first home, you should make an offer.