Top tips for first-time-buyers

Dilpreet Bhagrath, Mortgage Expert at online mortgage broker, Trussle, shares her top 3 tips and considerations for those taking their first step onto the property ladder.

Related topics:  Property
Warren Lewis
18th September 2019
FTB window 2

With the start of Shared Ownership Week fast approaching, running from Thursday 19th to 25th of September 2019, Trussle, has a few tips for would-be homeowners to consider before taking the property plunge!

1. Check if you’re eligible to purchase via Shared Ownership

There are some general eligibility requirements you need to meet in order to qualify for Shared Ownership. Your combined annual household income must be less than £80,000 if you’re buying outside of London and less than £90,000 within London. You must be a first-time buyer, or in the process of selling your home. This criteria also extends to anyone you’re buying a Shared Ownership home with. In order to demonstrate you’re able to afford the costs associated with a Shared Ownership home, you’ll need to prove you’re not in mortgage or rent arrears, as well as have a good credit history.

2. Calculate your monthly payments

With a Shared Ownership mortgage, it’s really important to create a budget planner for your mortgage payments, rental costs on the share of the home you don’t own, the service charge, as well as any other regular monthly outgoings. If you budget wisely and are able to save sufficiently, you could consider ‘staircasing’ later down the line. Staircasing allows you to build equity in the property until you own one hundred percent of the home. It’s worth being aware that there are legal costs involved with remortgaging to purchase additional shares in your home, but you can save money elsewhere in the process - such as using a free online mortgage broker. At Trussle, we have access to over 150 specific Shared Ownership mortgage products for applicants – speak to your broker today and ensure you’re getting the best deal for your personal circumstances!

3. Buying a home together? Think about long term plans

Buying with a friend or a partner can make it easier to get onto the property ladder. However, it’s crucial to talk about your future plans before you both commit to a mortgage together. It’s also important to remember that you’re responsible for the full mortgage amount - so if the person you’re living with can no longer keep up with their side of the mortgage payments, you’ll still be expected to pay the full amount.

On Shared Ownership, Dilpreet Bhagrath, Mortgage Expert at Trussle, says: “Shared Ownership can offer a route into home ownership more quickly than buying a home outright. It also might enable buyers to purchase a home they wouldn’t have been able to afford otherwise, such as in a location closer to work or family. While there are still rental payments due on the share of the property you don’t own, it’s possible to build equity in the property until you own one hundred per cent of the home, known as staircasing.

However, it’s really important to budget for the mortgage payments, rent of the share you don’t own, and the service charge. This might make saving to purchase additional shares of the property challenging. If you’re considering purchasing more equity in the property, the housing association will need to complete a valuation. The additional share price will be based on this valuation, rather than the value of the property when it was initially bought. There are also legal costs involved with the remortgage to purchase additional shares, and you should seek legal advice when it comes to your Stamp Duty Land Tax. There’s no time limit on staircasing, which gives you the flexibility to increase your equity in your home at a time that’s right for you.”

More like this
Latest from Financial Reporter
Latest from Protection Reporter
to our newsletter

Join a community of over 20,000 landlords and property specialists and keep up-to-date with industry news and upcoming events via our newsletter.