Buying a home is both one of the most rewarding and stressful life events someone can go through. The stress stems from different aspects of the process: finding the right home at the right price, dealing with solicitors and paperwork, juggling your work and personal life while organising the move and the emotional turmoil of making such an important commitment. Take a deep breath and read on to discover the 5 aspects to figure out in order to make buying your first home a smooth experience.

1. Save up for your deposit before buying your first home

Saving for a deposit is a crucial initial step in the journey to buying a home. Begin by setting a realistic goal for your deposit amount based on the price range of homes you're considering and any down payment requirements from lenders. Create a budget that outlines your income, expenses, and savings goals, and identify areas where you can cut back or save more. Consider setting up a separate savings account specifically for your deposit to help track your progress and prevent the temptation to dip into it for other expenses.

The lowest deposit required to qualify for a mortgage usually ranges from 5 to 10% of the total value of the home you want to buy. However, it is important to have saved more than the deposit you are putting down to be able to cover any expenses in case your circumstances change suddenly. Considering, soaring house prices and overall inflation, the amount needed for a deposit has increased.

You can explore government assistance programs or employer-sponsored savings plans to help accelerate your savings efforts. You can look into getting a lifetime ISA like our homeowner Anastasia. The young professional was able to boost her savings with this government backed savings account. With disciplined saving habits and a clear goal in mind, you'll be well on your way to achieving your dream of homeownership.

2. Understand the mortgage process

Getting a mortgage involves several steps, starting with assessing your financial situation. Lenders will look closely at your income, credit score, employment history, and debt-to-income ratio. To increase your chances of approval, aim to improve your credit score, minimise existing debts, and save for a down payment. Research various lenders and mortgage products to find the best fit for your needs. Once you've chosen a lender, you'll need to complete a mortgage application and provide supporting documents, such as pay stubs, tax returns, and bank statements. Working with a mortgage broker or advisor can streamline this process and help you navigate any complexities.

The amount you can borrow depends on several factors, including your income, expenses, creditworthiness, and the lender's criteria. Most lenders use a debt-to-income ratio to determine how much you can afford to borrow. This ratio compares your monthly debt payments to your gross monthly income. Typically, lenders prefer a debt-to-income ratio of 43% or lower, although some may accept higher ratios under certain circumstances. To give you a rough estimate, you can use an online mortgage calculator to find out how much you could be able to borrow.

The mortgage landscape can be overwhelming which is why seeking expert advice is crucial. Mortgage brokers, advisors, and financial planners can offer personalised guidance and help you understand your options. They can assess your financial situation, recommend suitable mortgage products, and negotiate terms with lenders on your behalf. By leveraging expert advice, you can make informed decisions and secure a mortgage that aligns with your long-term financial goals.

3. Nail down your home search

Start by defining your priorities and preferences for your future home. Consider factors such as location, size, layout, amenities, budget, and desired features. Unfortunately when it comes to buying a home, you will likely have to make a difference between must-haves and nice-to-haves in order to step onto the property ladder sooner rather than later.

Explore your options by looking at homes that meet your criteria, including real estate websites, mobile apps, local listings, and social media platforms. You can also browse our homes to find your dream place through private sale, Shared Ownership or even through resale. It is important to attend several viewings before making a decision. You can also explore different neighborhoods to gain insights into the local market and identify properties that resonate with you. Be proactive in your search and stay informed about new listings and market trends to increase your chances of finding the perfect home.

Looking for the right place to buy can be daunting, especially for first-time buyers. Don't hesitate to reach out to experts to get help defining what you're looking for and what kind of properties are right for your budget. A knowledgeable agent can provide valuable insights, access to exclusive listings, and expert guidance throughout the search process. They can help you navigate negotiations, understand contract terms, and make informed decisions, ultimately guiding you towards finding a home that meets your needs and expectations.

4. Explore Government-Backed Schemes

Alternatives to buying your first home outright exist and can help first-time buyers to get onto the property ladder.

1. Shared Ownership is a government-backed initiative designed to help individuals and families step onto the property ladder. With Shared Ownership, buyers purchase a share of the property (typically between 25% and 75%) and pay rent on the remaining share owned by a housing association. This option allows buyers to purchase a home with a smaller deposit and lower mortgage repayments. Over time, buyers have the opportunity to increase their ownership share through a process known as Staircasing.

2. Rent to Buy offer tenants the opportunity to rent a property at below-market rates for a set period, with the option to purchase the property at the end of the lease. This allows tenants to save for a deposit while living in the property and test the waters of homeownership before committing to a purchase.

3. The Right to Buy scheme enables eligible tenants of council properties to purchase their home at a discounted price. This initiative aims to promote homeownership and provide tenants with the opportunity to invest in their future. Discounts vary depending on factors such as the length of the tenancy and the property's value. Right to Buy can be a viable option for council tenants looking to take the first step towards homeownership.

4. Shared Equity schemes involve the government or a housing association providing a loan or equity stake to help buyers purchase a property. Buyers contribute a deposit and secure a mortgage for the remaining amount, with the shared equity portion reducing the overall loan-to-value ratio. This can result in lower mortgage repayments and make homeownership more affordable for buyers with limited savings.

5. Plan for extra costs

When purchasing a home in England, it's essential to consider additional costs beyond the purchase price. These expenses, often referred to as "closing costs," can significantly impact your budget and financial planning. 

Stamp Duty Land Tax (SDLT) is one of the most significant additional costs associated with buying a home in England. It is a tax imposed by the government on property transactions above a certain threshold. The amount payable depends on various factors, including the purchase price of the property, whether you're a first-time buyer, and whether you're purchasing an additional property. It's crucial to factor stamp duty into your budget calculations to avoid any surprises.

Legal Fees are inevitable when buying your first home. They cover various aspects of the conveyancing process, including conducting property searches, reviewing contracts, handling paperwork, and facilitating the transfer of ownership. While legal fees can vary depending on the complexity of the transaction and the solicitor's rates, it's advisable to obtain multiple quotes and budget accordingly.

Before finalising the purchase of a property, it's wise to commission a survey to assess its condition and identify any potential issues or defects. The cost of a survey can vary depending on the type and scope of the survey conducted. While some lenders offer basic valuation surveys as part of their mortgage application process, it's often beneficial to invest in a more comprehensive survey to ensure peace of mind and avoid costly surprises down the line.

When securing a mortgage, borrowers may incur various mortgage fees and charges, including arrangement fees, valuation fees, and mortgage broker fees. These fees can vary depending on the lender and the specific mortgage product chosen. It's essential to carefully review and understand the terms of your mortgage agreement, including any associated fees, to avoid unexpected expenses.

Finally, don't forget to budget for the moving costs such as removal, packing materials, and utility connection fees. These expenses can add up quickly, so it's advisable to obtain quotes from multiple removal companies and plan ahead to reduce stress and ensure a smooth transition to your new home.

By considering these 5 elements, you can approach the homebuying journey with clarity and confidence. If you want to meet with housing experts and get answers to all your questions, you can also attend the London Home Show 2024 with Peabody New Homes for free on Saturday 13th of April.