Help! I’m buying my first home
It’s a daunting thought; buying your first home. There’s so much to think about so we’ve got a quick checklist to help you get started and ensure you have the basics covered.
Make the most of ISAs
First time buyers can take advantage of either a Help to Buy ISA or Lifetime ISA.
With a Help to Buy ISA you can earn up to 2.27% interest tax-free with the state adding 25% free cash on top of that. You can put up to £1,200 deposit and then a maximum of £200 per month to get your 25% added and it can be used on properties up to £250,000, or £450,000 in London. More information can be found here.
With the Lifetime ISA, first-time buyers aged 18 to 39 could get up to £32,000 from the Government by saving up to £4,000 a year, either as a lump sum or whenever you can. If you then use your savings to buy your first home (or it can be used for retirement), a 25% bonus will be added. You need to have the LISA open for a minimum of 12 months to get the cash bonus, so if you’re looking to buy within a year or are over 40, a Help to Buy ISA is more suitable.
Use a mortgage calculator
We all know saving for a deposit can be a long process! But there are some great tips and tools on the Money Saving Expert website, including its mortgage calculator. It looks at the price of the property you’re interested in and shows how long you’ll need to save for a deposit. This will help you set savings goals and allow you to realistically plan when you may be in a position to make an offer.
Remember additional costs
Unfortunately, it’s not as simple as saving a deposit and arranging a mortgage. There are often additional costs we may not originally factor in. Remember things like legal fees, arrangement fees and stamp duty if the property costs more than £125,000. And you’ll probably have to buy at least some furniture which can run away with a lot more money than you may think. Websites such as Freecycle, where you can get some free furniture, are also worth considering to save a few pennies.
There’s a lot to think about when viewing a property so check the following to spot any potential problems quickly:
- Are there any damp spots?
- Check all the windows and doors to ensure they open and close properly
- Check the ceilings for cracks and any damp
- Check the electrics and switches – dodgy electrics could become a huge headache and expensive
- Check the plumbing – including toilets and taps
- Ask the seller to turn on the boiler to make sure the heating is working properly
- Check outside walls for cracks and for any rotten wood
- Make sure your phone has signal in the property!
- Have a nosey at the neighbours to spot any potential issues
Whether it’s ‘where’s the stopcock’, ‘who is your energy supplier’ or ‘what day are bins collected’, ask the seller all the practical questions before you move.
Get a quote from People’s Energy!
When you finally get your first home, make sure you’re getting the best deal on your gas and electric. People’s Energy is cheaper than the ‘big six’ and it’s easy to set up an account with us – all we need is your name and address. If you don’t know who supplies your new home, that’s no problem, we will find out for you and sort it all out, nothing for you to do (well, at least not on the setting up your energy supply front!). Get your quote here – it only takes 90 seconds – then enjoy your first home. Congratulations!