BUYING a house is one of the biggest splurges you’ll make – but first-time buyers should avoid these common mistakes when bagging a property.
Taking your first step on to the property ladder is a stressful time, and you might be feeling overwhelmed as house prices surge and experts warn of rising mortgage rates.
That's why The Sun sat down with Santander's head of business development for mortgages Graham Sellar to get tips on what budding buyers should NEVER do when trying to buy a home.
Graham, who has worked in Santander's mortgage team for over 25 years, has decades of experience in telling Brits how to go about bagging a mortgage deal.
But there are a number of common mistakes that first-time buyers make when trying to buy their home, Graham says.
From panic-buying a property to not saving up extra cash for fees, here's Graham's list of first-time buyer errors to avoid – and his checklist for clinching a deal.
Don't panic buy
With house prices rising steadily, you might feel pressured into buying a property now to beat any further hikes.
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The average UK house price soared to a record high of £270,000 in September 2021 – £28,000 higher than this time last year.
The cost of buying a property has surged as a house buying frenzy ensued during the Covid crisis as stamp duty rates were slashed – yet there has been a shortage of homes on the market to meet this soaring demand.
But if you're suffering from FOMO – fear of missing out – Graham said to hold tight and not jump into making a rash offer.
"Buying a house is not like buying a Christmas turkey that might run out," he said.
"Don't panic if you're worried about missing out. It's much better to get your financial situation in place before you make one of the biggest purchases of your life."
Don't forget your credit score
Your credit score shows how well you’ve managed your borrowings over the past six years, and lenders use it to calculate how risky it would be to give you money.
It can be the difference between helping you clinch a mortgage deal, or seeing one slip through your fingers.
But there are a number of oversights common among first time buyers when it comes to getting your credit score in order, Graham said.
One frequent mistake is forgetting to let the lender you've applied for a mortgage from know about any changes to your home address.
If you've previously taken out credit and have moved house but forgotten to update your personal details, it could dent your credit score.
"For example, you might have applied for a credit card as a student that's still linked to the address you were living in at this point," Graham says.
When one Sun consumer reporter tested their credit score, they realised that a wrong address on their file saw them jump from an "excellent" score to one that was rated on the bottom end of the "fair" scale.
First-time buyers might not realise that simply getting on the electoral register can also make it easier to get a mortgage as it proves to creditors who you are and where you live.
Don't put an offer in before checking what you can borrow
House hunting can be exciting, but make sure you don't rush into putting an offer in for a home before you know how much a lender will give you for the mortgage, Graham said.
"One thing first time buyers might not know is how much they can borrow," he said.
"Having this information means you will know what you can buy and what location you can afford to buy in."
Otherwise, your house hunt can easily become unrealistic, he said.
MoneySavingExpert has an online tool you can use to find out what you can borrow.
But Graham recommends getting advice from a broker or lender to see what you can afford to take on as well.
Don't forget to save up for fees
You might think saving up for a deposit is the only thing you'll have to worry about when buying a home.
But Graham said first time buyers can often overlook extra cash they'll need to pay for fees and other costs.
Solicitors fees can often cost up to £2,000.
You'll want to take out a home survey – which can cost hundreds of pounds – to make sure your home is not hiding any nasty surprises which need to be fixed like rotting floorboards or asbestos.
Other costs to bear in mind are stamp duty, removal vans and any immediate changes you want to make to the property.
Don't get confused over stamp duty
Budding buyers rushed to bag a home earlier this year before the stamp duty holiday came to an end.
Under the so-called “stamp duty holiday", those buying a house or flat worth £500,000 or less did not had to pay the tax (as long as the property is their main residence).
It returned to its normal limit of £125,000 in October.
But Graham said a common misconception among first-time buyers is that they now have to pay stamp duty after that relief ended.
However, in many cases, you don't – and this could shave thousands of pounds off your buying costs.
First-time buyers don't pay any stamp duty on homes costing less than £300,000.
That's a saving of £5,000 compared to someone who is not a first-time buyer purchasing a £300,000 home.
"The misconception is that [first time buyers] think they have missed the boat on stamp duty, but you can still get it," Graham said.
Here's how to get a mortgage if you have a poor credit score.
We also explain what a mortgage term is and which one is right for you.
Read our guide to the best mortgage calculators so you can work out how much you can borrow.
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