10 steps to buying your first home
April 2024
10 steps to buying your first home
April 2024
Getting the keys to your first home is an exciting experience. Finally, you have somewhere to call your own.
For many people, going through the home buying process for the first time can feel a bit scary – filled with jargon, big decisions and a long-term financial commitment. We’re here to offer some tips to make each step as straightforward as possible, from selecting a mortgage, to sorting out valuations, making offers and moving in!
1. Budgeting and saving for a deposit
The goal is to find the perfect first home within your budget while bearing in mind fees and work that may need doing!
When buying a home, there are some important costs to consider – solicitors, mortgage and valuation fees for instance. On average these can be a combined £3,326.50, yet our 2023/2024 First Time Buyer Economy report1, shows that just under half of first-time buyers (47%) aren’t aware of these costs. As someone buying their first home, you also may need to consider the cost of furniture and any work that you might need to do to make your new home liveable.
It’s also important to keep in mind your day-to-day expenses as well as holidays or your rainy day fund. Work out a realistic estimate for the house deposit and the additional costs and consider how much you can afford to save each month. You can always keep your deposit fund growing by opening a Coventry Building Society First Home Saver account. Designed especially for first time buyers, with this account, you can pay in up to £1,000 a month for 36 months and watch your deposit grow by earning interest on a variable rate. There are some restrictions, including a 60 days’ notice period to withdraw any money in the account, but we’ll also add a £500 celebratory bonus if you get a mortgage with us2.
2. Understanding different product options
Considering the different product options for you and your financial circumstances, be it a fixed-rate, tracker, discount or standard-variable-rate mortgage, will be key to helping manage your finances for the years to come.
It’s important to think about your homebuying aspirations and what you can afford in monthly payments.
With a variable rate mortgage:
- Your payments will fall if rates reduce.
- Your payments will rise if rates increase.
- But these products can give you some flexibility, as there are often no early repayment charges.
With a fixed rate mortgage:
- Monthly payments are fixed for two, three, five years or more, no matter what happens to the Bank of England base rate.
- This provides you with certainty for monthly budgeting.
- But mortgage holders will face early repayment charges if you choose to pay off the mortgage earlier, or remortgage before the fixed rate term ends.
The right mortgage for you might not be the same as everyone else's. So we recommend that you take the time to evaluate the most appropriate products lenders are offering. If you need further advice, you can speak to the lender or contact a mortgage broker.
3. House-hunting
This is the fun part! Create a wish list of must-haves for your first home and consider the area you want to live in. What would you like the interior to look like? Do you want a garden? Do you want a garage? Think about how close you want to be to schools, transport or busy roads and industrial estates, as this may also influence your opinion on a particular property. Understanding the advantages and trade-offs of an area could even help you to negotiate the price.
4. Mortgage agreements in principle (AIP)
A mortgage agreement in principle (AIP) tells you how much a lender is willing to let you borrow.
You’ll probably need to show this to the estate agent before you can make an offer on a property. Some estate agents may ask if you have an AIP before letting you view their properties. Therefore, it can help make things quicker and easier by getting one as soon as you’re sure you want to buy a home. It also shows sellers you’re serious about buying!
Getting an AIP won’t affect your credit score and it will help narrow your property search to affordable options.
5. Making an offer
Once you’ve found your dream home and have an AIP, it’s time to make an offer!
It's important to be prepared for negotiations. Take expert advice on your first offer, plan for and consider follow up offers that increase by smaller amounts until reaching your 'best and final’ amount, and convince the agent of a quick and low-risk sale. You want them to present you to the seller in the best possible light. One advantage for you, as a first time buyer, is that there’s no property chain. This means you’re not dependent on the sale of another property you own, so you may have stronger negotiating power to persuade sellers to lower their asking price. It’s important to also keep your budget and AIP in mind when making an offer. If you exceed this, you may not be able to get your mortgage and could lose out on purchasing the property.
6. The role of a conveyancing solicitor
When buying, you’ll need to hire a conveyancing solicitor. These professionals specialise in the end-to-end legal aspects of buying a home – for example, a conveyancing solicitor will be able to study the draft contract in detail and highlight any areas which need investigating further.
Conveyancers will also be able to provide assurance that the legal and financial aspects will be handled correctly and ensure the purchase of the home runs smoothly overall.
7. Inspecting homes
There are some things you need a trained eye to see, and qualified, independent inspectors and appraisers will help you be sure that a property is really worth the investment. At Coventry Building Society, when you take out a mortgage with us, we’ll instruct an expert to make sure the property is suitable to ‘secure’ the mortgage loan. However, as a buyer, you should also consider instructing a survey (such as a Homebuyer’s Report or Full Structural Survey) for your own records and to understand any potential areas of concern surrounding your new home.
8. Renovations and redecorating
According to our First Time Buyer Economy report, first time buyers spend an average of £4,9001 on renovation and redecorating. Remember to check if exciting projects you have in mind for your new home, such as adding an extension, are possible before making an offer on any property, as those should also be factored into budgeting.
9. Energy efficient homes
Whether you’re purchasing a new build or an older home, considering the energy efficiency of your new property is key. Check the Energy Performance Certificate (EPC) rating to work out whether it could be more energy efficient. As well as helping the environment, making energy efficiency improvements can also help to bring down your energy bills in the long term.
And there are plenty of options available to help you fund these changes, whether you’re looking to make larger modifications, like adding solar panels, or more budget-friendly options such as insulating walls and the loft. At Coventry Building Society, our Green additional borrowing provides you with a lower interest rate if you use at least 50% of your borrowing on selected improvements to make your home more energy efficient after being with us for six months.
10. Moving in!
When you and the seller are happy, you’ll exchange contracts, at which point the sale becomes legally binding. On completion day both solicitors will check to confirm everything is OK and then your solicitor will transfer your money (deposit and mortgage) to the seller’s solicitor. At that point, ownership of the property will formally transfer from the seller to you!
Congratulations, you’ve done it – your very own home! Now you can put the kettle on and start planning your housewarming party!
First Home Saver (2)
5.05
(Variable)
- Source - First time buyer economy report - Coventry for intermediaries - Survey on 1,000 UK adults who have bought their first home in the past three years (fieldwork: 18-23 July, 2023)
- This product has a 60 day notice period to withdraw funds free from the account. If you need your funds right away, you can make a withdrawal subject to a charge equal to 60 days’ interest. Limited to one account per person.
First Home Saver (2)
5.05
(Variable)
Related articles:
Top savings tips for first time buyers
Savings tips to support you in that journey towards your dream home.
Getting the keys to your first home is an exciting experience. Finally, you have somewhere to call your own.
For many people, going through the home buying process for the first time can feel a bit scary – filled with jargon, big decisions and a long-term financial commitment. We’re here to offer some tips to make each step as straightforward as possible, from selecting a mortgage, to sorting out valuations, making offers and moving in!
1. Budgeting and saving for a deposit
The goal is to find the perfect first home within your budget while bearing in mind fees and work that may need doing!
When buying a home, there are some important costs to consider – solicitors, mortgage and valuation fees for instance. On average these can be a combined £3,326.50, yet our 2023/2024 First Time Buyer Economy report1, shows that just under half of first-time buyers (47%) aren’t aware of these costs. As someone buying their first home, you also may need to consider the cost of furniture and any work that you might need to do to make your new home liveable.
It’s also important to keep in mind your day-to-day expenses as well as holidays or your rainy day fund. Work out a realistic estimate for the house deposit and the additional costs and consider how much you can afford to save each month. You can always keep your deposit fund growing by opening a Coventry Building Society First Home Saver account. Designed especially for first time buyers, with this account, you can pay in up to £1,000 a month for 36 months and watch your deposit grow by earning interest on a variable rate. There are some restrictions, including a 60 days’ notice period to withdraw any money in the account, but we’ll also add a £500 celebratory bonus if you get a mortgage with us2.
2. Understanding different product options
Considering the different product options for you and your financial circumstances, be it a fixed-rate, tracker, discount or standard-variable-rate mortgage, will be key to helping manage your finances for the years to come.
It’s important to think about your homebuying aspirations and what you can afford in monthly payments.
With a variable rate mortgage:
- Your payments will fall if rates reduce.
- Your payments will rise if rates increase.
- But these products can give you some flexibility, as there are often no early repayment charges.
With a fixed rate mortgage:
- Monthly payments are fixed for two, three, five years or more, no matter what happens to the Bank of England base rate.
- This provides you with certainty for monthly budgeting.
- But mortgage holders will face early repayment charges if you choose to pay off the mortgage earlier, or remortgage before the fixed rate term ends.
The right mortgage for you might not be the same as everyone else's. So we recommend that you take the time to evaluate the most appropriate products lenders are offering. If you need further advice, you can speak to the lender or contact a mortgage broker.
3. House-hunting
This is the fun part! Create a wish list of must-haves for your first home and consider the area you want to live in. What would you like the interior to look like? Do you want a garden? Do you want a garage? Think about how close you want to be to schools, transport or busy roads and industrial estates, as this may also influence your opinion on a particular property. Understanding the advantages and trade-offs of an area could even help you to negotiate the price.
4. Mortgage agreements in principle (AIP)
A mortgage agreement in principle (AIP) tells you how much a lender is willing to let you borrow.
You’ll probably need to show this to the estate agent before you can make an offer on a property. Some estate agents may ask if you have an AIP before letting you view their properties. Therefore, it can help make things quicker and easier by getting one as soon as you’re sure you want to buy a home. It also shows sellers you’re serious about buying!
Getting an AIP won’t affect your credit score and it will help narrow your property search to affordable options.
5. Making an offer
Once you’ve found your dream home and have an AIP, it’s time to make an offer!
It's important to be prepared for negotiations. Take expert advice on your first offer, plan for and consider follow up offers that increase by smaller amounts until reaching your 'best and final’ amount, and convince the agent of a quick and low-risk sale. You want them to present you to the seller in the best possible light. One advantage for you, as a first time buyer, is that there’s no property chain. This means you’re not dependent on the sale of another property you own, so you may have stronger negotiating power to persuade sellers to lower their asking price. It’s important to also keep your budget and AIP in mind when making an offer. If you exceed this, you may not be able to get your mortgage and could lose out on purchasing the property.
Conveyancers will also be able to provide assurance that the legal and financial aspects will be handled correctly and ensure the purchase of the home runs smoothly overall.
7. Inspecting homes
There are some things you need a trained eye to see, and qualified, independent inspectors and appraisers will help you be sure that a property is really worth the investment. At Coventry Building Society, when you take out a mortgage with us, we’ll instruct an expert to make sure the property is suitable to ‘secure’ the mortgage loan. However, as a buyer, you should also consider instructing a survey (such as a Homebuyer’s Report or Full Structural Survey) for your own records and to understand any potential areas of concern surrounding your new home.
8. Renovations and redecorating
According to our First Time Buyer Economy report, first time buyers spend an average of £4,9001 on renovation and redecorating. Remember to check if exciting projects you have in mind for your new home, such as adding an extension, are possible before making an offer on any property, as those should also be factored into budgeting.
9. Energy efficient homes
Whether you’re purchasing a new build or an older home, considering the energy efficiency of your new property is key. Check the Energy Performance Certificate (EPC) rating to work out whether it could be more energy efficient. As well as helping the environment, making energy efficiency improvements can also help to bring down your energy bills in the long term.
And there are plenty of options available to help you fund these changes, whether you’re looking to make larger modifications, like adding solar panels, or more budget-friendly options such as insulating walls and the loft. At Coventry Building Society, our Green additional borrowing provides you with a lower interest rate if you use at least 50% of your borrowing on selected improvements to make your home more energy efficient after being with us for six months.
10. Moving in!
When you and the seller are happy, you’ll exchange contracts, at which point the sale becomes legally binding. On completion day both solicitors will check to confirm everything is OK and then your solicitor will transfer your money (deposit and mortgage) to the seller’s solicitor. At that point, ownership of the property will formally transfer from the seller to you!
Congratulations, you’ve done it – your very own home! Now you can put the kettle on and start planning your housewarming party!
First Home Saver (2)
5.05
(Variable)
- Source - First time buyer economy report - Coventry for intermediaries - Survey on 1,000 UK adults who have bought their first home in the past three years (fieldwork: 18-23 July, 2023)
- This product has a 60 day notice period to withdraw funds free from the account. If you need your funds right away, you can make a withdrawal subject to a charge equal to 60 days’ interest. Limited to one account per person.
Related articles:
Top savings tips for first time buyers
Savings tips to support you in that journey towards your dream home.
