Your Buying Your First Home But Don’t Know Where To Start?
Having completed on the purchase of our first home, shout out my OH, around 8 month ago I appreciate how much research goes into such a huge step of buying your first home! I had about 20 different tabs open from processes to definitions to new build reviews and a plethora of about 1000 other things. So I’ve decided to start a mini ‘home buying’ series to touch upon all the important bits. I initially started 1 post, which quickly turned into a novel. So for convenience and to avoid information overload, I’ve broken it down into shorter snapshots which I hope, in turn, will make your life easier. I’ve also linked some website’s at the bottom which I found really helpful through my process.
001. Matters of Finance
Let’s start with the all important money chat. This in itself is a biggie, and starts way before you even think of booking your first viewing. Let’s touch upon the good old credit score. It doesn’t take a genius to know the higher the better. Our credit score represents all of our little and bigger financial footprints. In the banks eyes, taking out credit is a good thing – so long as you pay it back. It shows that you’re a fine candidate to invest in, you’ve previously taken credit and paid it back smoothly which for them = less risk.
Get You A Financial Adviser
The first thing to do, before you even start start viewing properties or thinking about reserving (if new build) is talk to a financial advisor. You’ll know exactly what’s what. How much room you have to play with. Your limits. What kind of term length you want to go for. A comfortable threshold vs your max. In a nutshell, you will see clearly what you can afford when buying. Once you’ve gone through the different ‘products’ + options available to you, you’ll receive your AIP/DIP. Which stands for Agreement/Decision In Principle. This is pretty much a very basic mortgage application with minimum information. Your chosen bank or building society will review this and issue a DIP should they feel like ‘in principle’, with the information provided, they would be willing to offer you a mortgage.
If you then go on to submit to make a formal application for a mortgage, once you’ve found a house/flat, then of course you’ll submit a full application which is a longer process. But, for now, it’s a good sign. It shows what amount the bank would be willing to lend which should speed up the process once you find your dream spot.
Now that you have your decision in principle, you know what you have to work with. You can take it along to developments or estate agents. They can advise on the properties that are within your budget and also shows them you are ‘backed’ already. If you are going for a new build you will most likely have to speak to their financial advisor to get the green light. However, remember, you don’t have to use their services for the purchase of your new home.
Typically, your DIP will be valid for around 60-90 days which will give you a chance to start looking around and booking viewings which are in budget and feasible. Although the beginning of a long process, with many documents and cups of coffee, it’s the start of an exciting chapter. Just remember why you’re doing it, and the feeling you’ll have when you get your keys! ♡
Until the next instalment, I hope this has been helpful. Doing as much reading and research is the best way to equip yourself, especially if you have family + friends who have been through the same process – they can help. Feel free to share any other tips or tricks you feel might be helpful! Speak soon.