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Your First Time Buyer Questions Answered

This guide was last updated 8 November 2022

Buying a first home should be exciting and enjoyable but so many of us are reluctant to even start the process. A common reason for this is simply that, well, it feels daunting…

Thanks to the jargon so often used in the industry and because so many of us don’t fully understand the processes involved, it can make the whole thing feel like a lot of effort!

In this article, we will break this all down for you and show you that actually, it’s not as bad as you think! If you have any questions that we have not covered below, please feel free to get in touch for a no-obligation chat! You can also download our other first-time buyer’s guides.

So, let’s get stuck in…

1) What is a deposit and how much does a first-time buyer need?

A deposit is the amount you need to be added to the mortgage loan to make up the full purchase price of a property.  As mortgages currently go up to a maximum of 95% of the purchase price, that means the minimum deposit you will need is 5% of the full purchase price. Here is our handy guide on saving for your first house deposit.

2) What is the definition of a first-time buyer?

This sounds a bit obvious but there is actually quite a strict definition. To qualify as a first-time buyer you must:

  • Not have owned a property before in the UK or around the world.  This includes inheriting a property or having been added to a property’s ownership and then looking to actually buy somewhere in just your name.
  • You also lose your first-time buyer status if you buy a property in joint names with someone else who has owned a property before. This is important because currently there is a stamp duty exemption for first-time buyers managed by HMRC and the above is their definition.

3) What help is available to first-time buyers?

There are various schemes available to first-time buyers.

Lifetime ISA – To save money and get the government to add to it you may be eligible for a Lifetime ISA that has a 25% bonus for first-time buyers.

Help To Buy – The government-backed Help To Buy Scheme is available to first-time buyers only and can help with a deposit of up to 20% outside of London or 40% inside London. You will still have to put a 5% deposit in as normal however and they are available only on new build properties that are part of the scheme.  There are some private companies offering schemes similar to Help To Buy on second-hand properties but their use is fairly limited at present.

Shared Ownership and Shared Equity – Housing associations offer shared equity and shared ownership schemes whereby you purchase part of a property (often less than 50%, including your 5% deposit), and the housing association either continue to own the remaining percentage share or they charge rent on the remaining amount they provided to purchase the property.  Both these schemes have been around for a long time but you should read the terms and conditions carefully before signing so you fully understand what you are signing up to and how it will affect you in the future.  For more on shared equity and shared ownership see our guide. 

4) Why do I need a solicitor?

Many first time buyers ask this question.  You don’t need a solicitor to buy a car so why do you need one to buy a house or a flat?  The reason is that nearly all first-time buyers need a mortgage and the lender requires a legally qualified individual to check the title deeds. This is to make sure that there are no onerous clauses in them that could cause the lender – and you – problems in the future.

This is doubly important when buying a leasehold property (usually flats) as there will be a lease agreement together with the title deeds.  The solicitor will act on both your behalf and the lender and should explain all the legal aspects of property ownership, specifically regarding the property you are buying.  The process is called conveyancing and it is really important you get a good conveyancer/solicitor to help you as first-time buyers since this will be the first time for you.

5) What is a valuation?

There are three types of valuation:

  1. Standard valuation report
    Lenders want to make sure that the price you are paying, and they are lending, is a fair market price. The valuer they instruct will detail any serious issues with the property that could be costly to rectify or highlight potential issues that might cause problems re-selling in the future.  The report they produce is very basic and it is for the lender, not the buyer.
  2. Homebuyer’s report
    This is often recommended for most purchases as unlike the standard valuation, it produces a detailed document highlighting all the areas in the property that might need work both now and in the near future.  When you see a property you like, you may miss all sorts of little things in the excitement of finding your dream home.  A homebuyer’s report will allow impartial, qualified eyes to examine the property on your behalf.
  3. Full structural survey
    This is quite expensive and usually only recommended for people looking to buy an old property or one they expect to do some structural work to.  Most purchases do not really need this level of report and a homebuyer’s report is sufficient.

You can read more about valuations in our guide. We also offer free mortgage valuations which you can enquire about.

6) Why does it take so long to buy a property?

Buying a property can be a slow process for a number of reasons.

  • The Chain – When we say chain, we are referring to the chain of properties involved in the transaction i.e. when you are buying someone’s property, they are also going to be buying a property, and those sellers are buying a property to move into, etc.
  • The paperwork – All of these purchases have valuations to be carried out, searches to be done, enquiries to be made, documents to be checked, mortgages to be agreed by lenders, before you can even think of moving in.  Things start in earnest when the chain is complete and all the steps mentioned before start happening.
  • The unforeseen – Like in most situations, things can go awry. For example, people can pull out for any reason up until contracts are exchanged. During the valuations or legal processes, things can come to light that requires the process to be paused.  Don’t worry though, as properties are bought and sold hundreds of thousands of times a year. Fingers crossed your first transaction will be a smooth one.

Overall a purchase usually takes up to six months from agreeing a price to getting the keys and moving in.  It can be quicker though, especially if there is a short chain involved.

7) What are ‘exchange of contracts’ and ‘completion’?

When buying a property you will hear all sorts of words and phrases you won’t know or understand.  It is really important you ask your lender, solicitor, estate agent, or professional mortgage broker what they mean so you feel engaged throughout.  The two phrases you will hear a lot about are ‘exchange of contracts’ and ‘completion.’

  1. Exchange of contracts – This happens when all the legal work is done, your solicitor is happy with everything, your deposit is placed with them and the lender has issued their mortgage offer (the paperwork telling everyone the mortgage is fully approved).  Your solicitor will have drawn up a contract for you to buy the property and the vendor’s solicitor will have a contract for the sale of the property (to you that is).  If there is a chain, then everyone in the chain must be ready at this point too. When everyone is ready, the solicitors agree all those contracts are acceptable and they ‘exchange’ them.
  2. Completion –  Once the contracts are exchanged, this is the point of no return. You are now legally obliged to follow through with the transaction, as the last stage is about to commence – completion.  On the day of completion, the lender will send their mortgage money to your solicitor.  Your solicitor adds your deposit (and any other monies such as Help To Buy funding) and sends it all to the seller’s solicitor.  When that money is confirmed as received, the estate agent will hand over the keys to you and you can move in.

8) Celebrate!

At this stage, you can take a sigh of relief and get excited about your new home! Many people will celebrate this with a drink or two but more often than not, it will be a takeaway before the unpacking starts.

Luckily, Coreco’s mortgage brokers are here to support you through every stage of the home buying process. There to explain exactly what’s going on, what is required of you, ensure you get the best possible deals and results, and doing all of the talking and chasing, your first time home buying experience can be even more simple.

So, don’t hesitate to get in touch with us and start your next chapter today!

To speak to one of our experienced advisers call 0207 220 5110 or arrange a call using the form below.

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    Andrew Montlake

    Written by Andrew Montlake

    Andrew Montlake, better known as Monty, began his journey with an Hons degree in Economics & Politics before starting in the mortgage industry in February 1994. As a main founder of Coreco in 2009, he successfully grew the brand, marketing, and communications, and was made MD in 2019 focussing on the overall vision, strategy, and culture of the company. As Coreco’s media spokesperson, Andrew can often be seen or heard on TV and radio as well as regularly commenting in the national, local, and trade press. He is the author of this acclaimed Mortgage Blog and is well-known for his social media, podcasts, and public speaking. Andrew is now proud to serve as Chairman of the Association of Mortgage Intermediaries, (AMI) as a cheerleader for the Mortgage Industry as a whole and continues to work at the coal face, writing mortgage business and advising clients.

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