The purchase of a property can be a stressful time for any family, and even more so when they are purchasing a property for the first time. The family home is likely to be the most valuable asset one will buy during the course of a lifetime, and there are a number of issues that you should take into account when searching for your perfect family home.
If you are looking to buy a house, you will often be buying a ‘freehold‘ interest. This means that you will own the house and the land upon which it is built. However if you are looking to buy a flat, you will often only be buying a ‘leasehold‘ interest. This means that you will only own the flat itself for a term of years; you will not own the building within which it is contained or the land upon which it is built. As a leasehold owner you will often be required to contribute towards the cost of maintaining the building within which the flat is contained. Most importantly, leasehold interests are always limited in time, so be sure to check the number of years remaining on the lease as this may affectthe resale value of your flat.
Before considering any potential properties, it is essential set out a realistic and affordable budget. First time buyers usually require financial assistance, sometimesfrom parents, other family, friends, and in almost all cases from a mortgage provider. A mortgage provider (a bank or building society) will lend you the money by way of mortgage to buy the property. A cash deposit of between 10% and 20% will help make it easier to get a mortgage application approved. It is often wise to seek specialist advice from a mortgage broker so as try and obtain the best sort of deal that suits your needs.
In addition to the purchase price of the home itself, there are a number of other costs and expenses to consider. These include:
- Mortgage fees – The costs to the mortgage provider for setting up the mortgage. Some providers are happy to include these costs as part of the mortgage amount, meaning that you may not need to pay these costs up front.
- Survey fees – It is always advisable to obtain a full structural survey so as to ensure that property you intend on purchasing is structurally stable and safe for your family.
- Solicitor’s fees – A property transaction can get complicated and confusing. It is essential to have a good solicitor to advise and help you every step along the way, and they will usually be your first point of contact throughout the transaction.
- Search fees – Your solicitor should always carry out various searches against the property so they can tell you everything you need to know about a property and the surrounding area before you buy. The average cost for these property searches is around £500.00, but this can vary depending on the location of the property you are looking to buy.
- Stamp Duty Land Tax (SDLT) – SDLT is a tax charged on the purchase of any property costing more than £125,000.00. Following changes to tax laws in December 2014, there has been a reduction in the amount tax payable for around 98% of home buyers.
- Removal costs
These are just a general indication of some of the factors to consider when purchasing your first home.