In recent weeks, our Belfast and Armagh branches have received an influx of questions from first time buyers. With a number of new developments popping up in both areas, Gareth of CPS in Belfast outlines the most common questions he gets asked….
Will I be able to get a mortgage?
Buying your first home is an exciting prospect. We recommend you don’t buy beyond your means and find a property that is suitable for your family and needs. A big house means a big deposit and high monthly mortgage payments. Some lenders will accept a 5% deposit but most will ask for at least 10% of the property value.
Make sure you budget adequately, be accurate and honest with how much you spend monthly on eating out, clothes, entertainment, travel etc. Always add a little extra to your budget for emergencies such as having to fix an appliance. When you know how much money you already spend, you’ll get a good indication of what you can afford. Don’t forget to budget for extras such as legal costs and stamp duty.
Has there been much interest in the property?
First time buyers always want to know if any bids have been made on a property they are interested in. Getting on the property ladder is a tough task and it is made harder when you know existing homeowners may be in a better position financially.
However, as a first time buyer this can work to your advantage, you don’t have deadlines and aren’t relying on your house being sold to have the funds to move house. Many new developments are geared towards young professionals and families so don’t be put off if other people have shown interest in the same property.
Will my offer be accepted?
Unfortunately that is not up to us. As an estate agent we are simply the go between for buyer and seller. We often tell homebuyers to be realistic with their offers as the final decision lies with the seller. Even if a seller agrees to the sale, they can still change their mind before contracts and funds are transferred.
How do I provide proof of funds to you?
During your mortgage application, we’ll ask you to provide proof you can afford the property. You’ll need to provide at least six months of pay statements and bank statements along with declaring any outstanding debt such as student loans and car finance. We may also ask for a letter from your employer verifying you work for the company and what your salary is.
Now my offer has been accepted, what happens now?
Once your offer has been accepted, both buyer and seller’s legal representation will draw up contracts. Funds are held in an Escrow account (a third party who acts on behalf of buyer and seller) until the deal is completed. Once funds and paperwork have all been passed, you’ll be the proud owner of your first home.