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What are the extra costs when buying your first home
Buying your first home is an achievement but watch out for extra costs, reports Ginetta Vedrickas
house with a mortgage opted for a standard variable-rate mortgage, with 32% opting for a fixed-rate mortgage. Of the 34% of first time buyers receiving help from parents, 24% got a loan for the deposit, with 10% of buyers’ parents gifting them money towards their purchase. In terms of ownership, the survey also revealed that almost half, 48%, of first time buyers are the sole property owners, while 33% bought with a partner. EXTRA COSTS WHEN BUYING It’s all too easy for first time buyers to focus solely upon interest rates when looking at mortgage deals. But Steed warns that, while the rate is important in working out how expensive your monthly repayments will be, buyers should also consider the fees involved, as a mortgage deal with an attractive interest rate can end up being more expensive than higher rate deals when fees are factored in, “On average, the arrangement fee alone sets a first time buyer back around £345. But this is an average figure, in reality, some first time buyers may pay nothing while some may
Homes scheme, 36%, followed by a Lifetime ISA at 29%. Uswitch mortgage expert Kellie Steed says that when people think about first time buyer schemes their mind often jumps to Help to Buy, but she points out that this equity loan scheme is no longer available in England, Northern Ireland or Scotland, although anyone eligible in Wales can still apply. “For English homebuyers, one of the alternatives is the First Homes scheme, which was the most popular among survey respondents,” she says. “Offering a 30% to 50% discount on the market value of a property, it may help those struggling to make that leap on to the property ladder due to affordability. However, there are limitations on the type of properties you can purchase, and certain eligibility criteria apply.”
We’re all only too aware of the current cost-of-living crisis, which makes affording your first home financially daunting. A recent survey by Uswitch mortgages investigated buying trends among first time buyers to identify exactly how they managed to afford it.The survey found that around half, 45%, of first time buyers got help from Government schemes. Over a third, 34%, received parental support from the bank of mum and dad to get on the property ladder, with around one in 10, 11%, of first time buyers who didn’t get any help.The survey also found that most first time buyers weren’t aware of the additional fees that come with buying a property, with less than one in 10, 7%, who knew how much admin fees cost on top of a mortgage. MOST COMMON FIRST TIME BUYER PURCHASE METHODS With around half, 45%, of first time buyers purchasing with help from a Government scheme, the survey looked at which schemes they used.The most common was the First
MORTGAGES AND PARENTAL HELP
The survey found that the second most common purchase method was buying with a “traditional” mortgage at 44%, and that most first time buyers, 38%, who bought a
88 First Time Buyer April/May 2024
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