Purchasing your first home can be overwhelming and at the same time exciting. From saving for a deposit to navigating mortgage options, the process requires careful planning and informed decision-making. Here’s our advice to help first-time buyers secure your dream home with confidence.
Save for Your Deposit
The first step in buying a home is saving for a deposit. Most lenders require at least 5-10% of the property’s value as a deposit, though a larger deposit can unlock better mortgage rates.
Tips for saving:
- Set a clear goal: Calculate how much you need for a deposit e.g. a 10% deposit on a £300,000 home is £30,000.
- Open a Lifetime ISA (LISA): The government offers a 25% bonus on savings up to £4,000 per year in a LISA, specifically for first-time buyers.
- Reduce unnecessary expenses: Review your spending and redirect funds into your savings. Small sacrifices can add up over time.
- Consider Shared Ownership. Shared ownership schemes allow you to buy a portion of the property and pay rent on the rest.
Understand your mortgage options
Securing the right mortgage is key to purchasing your dream home. Here’s what first-time buyers in Surrey should know:
Types of Mortgages:
- Fixed-rate mortgages: The interest rate remains constant for a set period, making it easier to budget.
- Tracker mortgages: The interest rate fluctuates in line with the Bank of England’s base rate, offering potential savings when rates are low.
How to Secure a Mortgage
- Check Your Credit Score: A healthy credit score can help improve your chances of securing a competitive mortgage rate. Use checkmyfile to review your score.
- Get a Mortgage in Principle: This is an agreement from a lender indicating how much they are willing to lend based on your financial situation.
- Seek Mortgage Advice: A mortgage adviser, like us at Resolve Financial Solutions, can guide you through the process and help you find the best deals tailored to your needs.
Navigate Current Mortgage Rates
Mortgage rates can always vary significantly depending on economic conditions and lender policies. As of January 2025, the Bank of England’s base rate stands at 4.75% (an update is the 6th February 2025) influencing the rates lenders offer.
Tips for Managing Rates:
- Compare offers: use a comparison tool to explore rates from multiple lenders. Keep in mind the lowest rate isn’t always the best.
- Fix your rate: locking in a fixed-rate mortgage during periods of uncertainty can protect you from rate increases.
- Stay informed: Work with a mortgage adviser who can monitor the market and advise you on the best to secure a deal.
Plan for Additional Costs
Buying a home involves more than just the deposit and mortgage payments. Be prepared for other additional costs such as:
- Stamp duty. Up until 31st March 2025, first-time buyers pay no stamp duty on homes up to £425,000 in England worth £625,000 or less. From the 1st April 2025 this changes to £300,000 for first-time buyers buying a home worth £500,000 or less.
- Solicitor fees. These typically range from £1,000 to £1,500.
- Survey costs. A homebuyer report or structural survey can cost £400-£700.
- Moving expenses. Include costs for removals and any initial home improvements.
Buying a property in the county of Surrey comes with some unique considerations such as property demand and regional price variations. Working with us, will mean you have tailored advice and insight into the Surrey housing market.
Buying your first home requires preparation and informed decisions. By saving diligently, understanding your mortgage options and seeking professional advice, you can turn your dreams of being a homeowner into reality.
For personalised mortgage advice in Surrey, get in touch today.
*Please note, your home maybe repossessed if you do not keep up repayments on your mortgage or other loans secured on it.