Congratulations on making the huge life decision of buying your first home!
Buying your first home alone, as a couple, or even with friends is one of the most monumental life decisions and experiences you will ever go through! It is such an exciting time, all the way from securing a mortgage to viewing different places that may fit your needs, right through to finalizing your finances and finding that dream home to call your own!
Among all the excitement, we have to be real and understand that buying your first home can be one of the single most stressful things you will ever have to do! And the stress is not just from making sure that everything is in place for a successful purchase of your forever bricks-and-mortar; it will come from the actual moving process, including packing, storage, cleaning as well as those unexpected expected expenses that pop up when you least expect them to!
So with such a vast commitment happening, you will need a great guide to see you through the whole process and make those stepping stones to being a homeowner a little easier to navigate around.
Reasons You Consider Buying a Home
You may think that buying a home is par for the course of being an adult, and when the opportunity arises, you will likely jump at the chance!
Everyone’s reasons for buying a home may be different, but among the most popular reasons for purchasing a home are:
- Security – People primarily buy a home as it is a secure option for your future. As long as the repayments are affordable and you keep up to date with them, the home your buy is yours to do with as you please, and the only person you need to worry about is repaying the bank manager!
- Freedom – Once all of the buying and moving has been complete, the freedom you will feel in owning your own home is fantastic!
You can do with your bricks and mortar as you see fit and make it the home of your dreams.
- Money-Saving – Yes, we know the initial outlay of everything that comes with buying a home may feel like you are hemorrhaging money at the time. But in the long run, buying your first home puts you firmly on the path of having the ability to save money for the future.
Advantages of Homeownership Over Renting
Homeownership comes with many advantages over renting. While renting is sometimes the only solution in the short term, and it certainly has its place in the home’s chain, ownership brings around so many advantages, such as:
- You repay your mortgage to eventually have a home that belongs to you debt-free versus continually paying “dead rent” for a home that will never belong to you.
- Mortgages tend to have cheaper repayment schedules than renting, so it can be cheaper to buy your home and pay less per month.
- Renting rates tend to be static, regardless of the period you are renting for (and, in some cases, actually go up with inflation!). In contrast, mortgage payments can be variable and even go down as time moves on.
- The home you buy is yours, with nobody imposing any rules or regulations on the things you can and cannot do, such as decorating and the aesthetics of your home.
What to Know If You’re Purchasing as A Couple or With a Partner
It’s incredibly likely that when you buy your first home, it will be part of a relationship, and it is essential to know why this element is super important.
When you buy a home with more than one person, you need to ensure that if you require joint responsibility, that both parties are named on:
- The mortgage application and anything else attached to the financial burden of the home
- The house deeds
- Any insurances and repayment plans that may come as part of your purchase
Ensuring the names are all present on anything to do with the purchase will ensure that everything is assessed and underwritten correctly.
It will also ensure that everyone named has equal responsibility in everything to do with the home. Equal responsibility and liability are significant factors for the future in case the relationship breaks down.
How Do Mortgages Work?
Quite simply, a mortgage is a loan you can obtain from any mortgage lender that is designed specifically for buying a home.
Once all parties on the mortgage application have had their circumstances underwritten for risk and affordability and the
level of deposit to be applied, the mortgage provider will offer the value of the loan available.
Your repayments on the loan amount will be paid back directly to the establishment that gives you the initial loan, which is a bank or building society, and each repayment will be based upon:
- The loan amount
- The loan term
- The amount of interest applied
- How much deposit is available to be paid
Additional Expenses to Keep in Mind
We briefly mentioned in the introduction of additional expenses that may pop up when you least expect them, and they will!
It is worth attempting to budget for every eventuality so those sneaky extras don’t cause too much agitation when they pop up.
Here are some things to always keep in mind that often require additional expense considerations:
- Realtor commission
- Moving expenses
- Utility bills
- Independent assessments
- Administration and signatory fees
- Postage fees
There are honestly so many things to think about when it comes to additional expenses when buying your first home, but it’s definitely worth it!
Day of Purchase!
So the day has arrived. It’s time to complete that purchase!
This day may seem like a bit of an anti-climax given the months you have been potentially chasing signatures, visiting banks, and making sure everything is in the right boxes, but we promise this is the best day!
The reason for it being somewhat of an anti-climax is simply this…this part is very quick!
You will likely arrange to go in and visit the expert handling your house purchase to complete the sale officially. It will be only a few moments of your time while they check everything over, and then you will sign the last contract of completion and be handed the keys to your new home!
In stark contrast to months of making sure that every T is crossed and every I is dotted, this day will fill you with delight once you have those keys very quickly in your hand, as you will be expecting hours of waiting!
Of course, if there is anything amiss, your expert will have to take care of it before that completion is complete, but that is after this day!
CONGRATULATIONS! YOU ARE A HOMEOWNER!
Now the adventure begins!
Buying your very first home can be an extremely stressful experience, but it is so worth the effort once you officially say you are a homeowner!
Being a homeowner can be more cost-effective than renting a home simply because you are paying to own the home outright. You will have no guidelines or rules to follow regarding the way your home should look, and you really can do with it as you please.
Please make sure you are aware of all the options for applying and taking out a mortgage, and make sure everything is correct in law before proceeding.
And lastly, make a list of all the potential hidden extras that could eat up your moving budget before you even get the keys! If you over budget for every eventuality, you will not go far wrong!