First time buyers also have to think about budgeting, as in many cases they may not have had the experience of trying to met mortgage repayments, bills, and costs of living. So, as a first time buyer you will have plenty to think about.
Many people that are buying for the first time find that trying to raise a deposit as well as have cash for solicitor fees, stamp duty, furniture, and other costs involved in property purchasing can be very difficult, and this is why a number of lenders offer mortgages for one hundred percent of the property’s value, which means that you won’t have to find the traditional five percent deposit. Some lenders will even offer over and above the property’s value, giving you additional funds for home improvements, furnishings, and even to pay the stamp duty.
One thing to bear in mind if you do opt for a one hundred percent or higher mortgage is that you run the risk of falling into negative equity, which means that if property prices fall you will find yourself in debt for far more than you would get if you were to sell the property.
Another first for many first time buyers is having to budget and work out bills, mortgage payments, and living expenses, ensuring that your income adequately covers your outgoings without leaving you too financially strained. If you opt for a variable rate mortgage you could find this quite difficult, as interest rate changes can mean that the repayments on your mortgage are unpredictable, and this can make it harder to manage your finances effectively.
This is why many first time buyers opt for a fixed rate mortgage, which enables them to get used to the independence and having to manage their own finances without having to worry about fluctuating mortgage repayments. You will be able to enjoy a fixed rate for a specified period, which will give you time to get used to budgeting and get some savings behind you before you revert to a variable rate.