Buying a house is not only exciting but one of the biggest (If not the biggest!) purchase you will potentially make in your life. But it’s not all a walk in the park, here are a few things we learned while going through the process…
Just how big your deposit really needs to be:
You can get onto the property ladder with a 5% or 10% but when you consider the prices of houses this can be easier said than done to find. Which? suggest having a deposit of 25% upwards in order to get a decent mortgage rate. And even then it can still be bloody hard to get a mortgage when you have a 25% deposit, as first-time buyers are capped with the amount that they can borrow.
How thorough your credit checks will be:
It’s all fun and games having credit checks where it uncovers that you may have once been stupid with your overdraft and not realised money was going out so went overdrawn. Depending on how long ago that was, they are likely to find it. Your personal finances will be picked at with a fine tooth comb and they will question everything to a point that makes you feel guilty for buying that cheeky pint down the pub or bargain dress in the sales.
Avoid having loans and credit cards:
Avoid having too larger loans or an outstanding balance on your credit card as they see it as you being irresponsible with money.
But also have loans and credit cards:
This kind of contradicts my last point but essentially mortgage lenders like to see that you have a small amount of debt to see how you manage it. I do understand where they’re coming from as they want to see how you manage your finances on a regular basis and that you’re not too squeaky clean where they have absolutely no idea on how to budget money and essentially not pay them every month. We tried to stick to using our credit card for purchases such as fuel every month and then paying it off. It also improved my credit rating by purchasing my car on finance as it showed I was being responsible and managing a sensible monthly payment.
Buying a house isn’t as simple as putting a deposit down and applying for a mortgage (Not that that’s really that simple!). You will also need to pay fees for lawyers, mortgage advisers and a variety of surveys. These aren’t cheap, I can assure you now! I’d advise doing some research into some estimated costs on these so that you don’t end up with a nasty surprise later on which you can’t afford.
Potentially moving miles from where you currently live:
This might be pretty obvious but is something else to also consider that you may have to move further away from where you currently live. Even while we were renting we had to do this. Living in Winchester was fine when we were living as a group of us but when it was just the two of us, moving out to Eastleigh was the better option for us seeing as we both drive and wanted a little more space than what was available in Winchester.
While we were house hunting though, Eastleigh and even Southampton didn’t really have any properties that had features which we really wanted so moving out closer to Portsmouth was the best option for us. Although we’re further away from work, our daily commute for work takes about the same time as we cut across-country rather than use the M3.
We did initially look at a property in Gosport as it’s technically closer to Winchester for work but then looking at the routes out of Gosport and how congested they get, we decided to opt for Waterlooville. Despite being that little bit further away, it’s got good links to Sussex, London and other parts of Hampshire which won us over. Plus it actually seems to be a reasonably nice area.
You may have to compromise on some features:
I hate to burst anyone’s bubble but as a first-time buyer, you won’t get everything you dream of having in a house. I don’t mean you’ll end up hating it, I just mean there will be features you want in a house that won’t be in the budget you’re looking at. An example of this with us was that Greg wanted a garage. The house we were originally going to purchase in Gosport did have a garage but when we decided against living there, finding a house in a nice area of Waterlooville, that was also in our budget, was not going to happen. So we decided that as long as we could get our own drive and garden then we would forgo this.
A house may look fine on face value but could have many underlying issues:
As I’ve previously mentioned about surveys these are a necessity for when buying a house. Unfortunately though, they cost a substantial amount and can bring up a few nasty surprises on a property. We had a basic survey conducted on the first property we were initially going to buy and the results came back stating it was a concrete built property.
We didn’t have a full in-depth survey to uncover any further issues but seeing as the basic survey suggested that the property was valued by the estate agent for more than it was actually worth and concrete properties are renowned for having issues, we decided against taking risks and pulled out of the property sale. It meant that we lost money but we thought it would be worse if we purchased the property and then had further issues down the line.
You may get declined:
Depending upon your credit history or for purchases you make once you’ve bought the house, you may get declined for essentially having “too much debt”. We were lucky enough that during the mortgage checks we weren’t declined by any companies but I was declined after we had got the house for trying to purchase a washing machine on finance. Ridiculous really when you examine my credit history to see I had recently purchased a house and then wanted to buy a washing machine but then trying to buy it so soon after having just recently bought a massive purchase, you can see why I was declined.
Despite having always been reasonably sensible with money, I’ve also been declined before for trying to change mobile phone provider contracts simply for taking out all my bills as direct debits in one go and not spacing them out. Obviously, this can vary from person to person but just be careful on how many purchases you make on finance before and after the mortgage process as it will result in you not being able to try again for at least six months.
Expect some unpredicted delays:
We were buying in a chain of three so despite being a relatively small chain, we still suffered from unexpected delays at the top of the chain despite us making it clear all along that we were working on a limited time scale from when we needed to be out of our rented house. To top it off, we were told a week before we were due to move out of our rental home that there was gonna be a delay of up to ten weeks due to the vendors at the top of the chain constantly faffing around.
As you can imagine, this caused us much frustration and panic about finding somewhere else to live and store our possessions temporarily. Luckily, we had relatives that lived an hour away and had saved some money to put things into storage so it wasn’t the worst case scenario. However, not everyone is as fortunate so the moral of the story here is to have a Plan B for if it all goes Pete Tong.
Ah, student loans:
Remember when we were all told that student loans were the “best loans ever” as they don’t affect your credit score? That might be so and technically a mortgage company isn’t allowed to decline you on the basis you have one. However, we had one mortgage provider shy away from us due to the repayments we were making on them which counts as a “monthly outgoing”.
In their eyes, their major concern was that I currently only pay a year of tuition fees I had on the lower fees but also have three years of a higher fees tuition loan as well as a master’s loan which will all potentially one day affect my monthly outgoings/affordability of the mortgage (Which?).
In my eyes, I understand where they’re coming from but if I can afford rent at almost double the price and manage to pay all my monthly bills then surely I can afford to pay a mortgage?
And finally, it only sinks in that it’s your house when you have to start forking out money on it:
Owning your own home is such a surreal and exciting experience when you first get your keys as you can finally make all those Pinterest boards you’ve created come to life. Although what those Pinterest boards don’t envisage for you is how much products really cost. But that’s just part of all the fun and games of being a homeowner.
And there we have it, twelve things you don’t realise until you buy a house. Please note that I am not affiliated with a mortgage lender or advisor in any way and that this is all based on my own experience. If you would like professional advice then I would strongly advise speaking to a mortgage adviser.
You may also enjoy:
Find me on: