First time buyers are lacking buying knowledge

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Guest blog from Countryside

We recently surveyed first time buyers in the UK and found that one in four believe that they need more than a 20% deposit to be considered for a mortgage.

Our survey gave us a great insight into the concerns and worries of first time buyers, with many admitting that they don’t understand the financial elements of buying a home - including deposits.

Only 19% believed that they could afford to buy a home with a 5% deposit, which is the amount required to buy through the government's Help to Buy scheme.

Around 50% of respondents admitted that they were still confused by the Help to Buy scheme, 38% were unsure by mortgage interest rates, and 30% were unclear of the meaning of stamp duty.

With buying a home being one of the biggest financial commitments a person can make, it’s important that first time buyers feel confident in the information that they have before committing to purchasing.

We have a number of developments across the North West that are perfect for first time buyers where prices start from just £134,950 for a three bedroom home.  Help to Buy is available at all of our North West developments, including Heyfields in Walkden, Blackberry Vale in Stockport and Highfield Green and NGV in Liverpool.  More information and prices can be found at http://countrysideinspire.co.uk/

We are confident that at Countryside we can offer helpful and personally tailored information about the buying process, including clear explanations about the Help to Buy scheme.

We’ve pulled together some useful top tips for first time buyers:

How much do I need to save for a deposit?

The deposit that you will need depends on the cost of the house. With Help to Buy, you only need to save 5%. So if the house that you desire is priced at £150,000, then your deposit would be £7,500. Through Help to Buy you will also receive a 20% government loan, which means that you just need to secure a 75% mortgage.

What costs are involved in buying a home?

Aside from your deposit, monthly mortgage payments and stamp duty, it’s important to note that the mortgage lender that you choose may have an arrangement fee. You should also factor in any moving costs.

When applying for a mortgage, how much can I borrow?

The amount that you can borrow to buy your first home will depend on how much you earn, and how much of a deposit you have to put down. Lenders will not want to lend you more than they think you can afford, so they’ll restrict the amount you can borrow to around four times your income. This can vary from lender to lender, so it’s worth shopping around. It’s also important to note that with Help to Buy you will also receive a 20% interest free loan, so your mortgage is only 75% of the property value.

What will lenders want to know?

As well as looking at your income, lenders will want to check your credit history so they can see how you’ve managed any borrowing in the past, and if you’ve missed any repayments.

How long should my mortgage run for?

Most borrowers opt for a mortgage that is repayable over 25 years, but you can sometimes choose a longer term than this. Remember, the longer your mortgage lasts, the more interest you will pay overall.

Why should I buy a new build home?

Buying a new build home is much less stressful, and cost-effective, than buying an older home. New build homes are designed to use less energy, have no chain and are untouched by previous owners, proving a blank canvas for you to put your stamp on.

Remember there’s no such thing as a stupid question, so make sure you ask as many questions you need to fully understand the process, you can find more information about our developments at http://countrysideinspire.co.uk/