First time buyers guide

So you're thinking of buying your first home?

Great! To help get you started, take a look through our step-by-step guide to help you work your way through the home-buying process.

Types of mortgages available

Before you go through this guide, it might be worth seeing what kind of mortgages there are. After all, you’ll almost certainly need one to buy your home.

Here at the West Brom, you’ll find a wide range of mortgages, designed specifically to meet your particular financial circumstances, including competitive fixed and discount variable rate mortgages. We can also help you choose the one that feels best for you.  

Fixed rate mortgages - If you want the peace of mind of knowing what your mortgage payments will be every month, then a fixed rate mortgage could be for you. This type of mortgage fixes your interest rate for an agreed period of time and means your rate won’t be affected by changes in the Bank of England’s Bank Rate, whether it goes up or down.

Tracker mortgages - A tracker mortgage follows and tracks movements of another rate. This is usually the Bank Rate. As a result, you could benefit from cheaper mortgage payments when the Bank Rate is low; but you’ll also need to budget for higher mortgage payments should the Bank Rate go up. 

Variable rate mortgages - There are several types of variable rate mortgages, including standard variable and discount, typically offering a discount for a set period off a lenders standard variable rate. They don’t offer protection from future rate increases but you could benefit from cheaper payments when interest rates are low. Standard variable rates are usually set by individual lenders, so they might change without the Bank Rate moving. If we change our standard variable rate, we’ll write to you with plenty of notice to let you know if your mortgage payments will be going up or down.

From time to time, the West Brom may launch or withdraw certain types of mortgages and change its product range. 

A deposit - the bigger the better

As you’ll probably be aware, when applying for a mortgage you will need to put down a deposit towards the house. This might be anything from 5% deposit to a much larger deposit. It’s worth bearing in mind that the more you’re able to put down as a deposit, the lower your repayments are likely to be. This is because, first of all, you’re paying off a smaller loan and, secondly, the lower the Loan to Value (LTV) the lower the interest rate. Above all, whatever you opt for, the most important thing is that you feel it’s affordable.

Step by step

So, you’ve decided now’s the time to buy your own home. It’s likely to be the biggest financial outlay in your life to date, which can make it a pretty daunting prospect. With this in mind, the West Brom has come up with a guide to help you each step of the way by outlining what happens at every stage of the process.  

Fees and costs to consider

The expense of buying your first home is not just about the price of the property. As a first time buyer it’s vital to bear in mind the other costs involved. For starters, there’s the deposit. If you’re buying a house for around £150,000 and want to put down a 10% deposit, that’s £15,000 you’ll need to have saved.

That’s not all. There are the other costs you usually come across when buying a property.  

• Booking fee - This fee is charged to secure the interest rate of the mortgage. It is also known as the application fee. It usually costs around £100-£200 and is typically paid upfront, but we sometimes have offers where this fee is not charged.
• Completion fee - This fee is charged to set-up your mortgage and can also be referred to as an arrangement fee. It usually costs from £500 to over £1,000 with the option of either paying it upfront or adding it to the mortgage. Again, we sometimes have offers where this fee is not charged.
  
• Stamp duty - Stamp duty is a lump sum tax that anyone buying a property or land costing more than a set amount has to pay. The rate of this tax will vary depending on the value of your property. For more information visit the Government’s website at www.gov.uk where you can also find a calculator to help you work out the amount you would have to pay.
• Valuation fee - The level of fee is dependent on the property’s value and can be anywhere from £150 up to £1,500. For certain mortgage products, we may not charge you for a standard valuation.
• Survey fee - The survey could be a basic home condition survey, costing around £250; or a full structural survey upwards of £600. This fee is also dependent on the property’s value. Never underestimate the value of a good detailed survey as it can save you money on repairs later down the line and can also be used to negotiate the price of your house.
• Legal fees - You’ll need a solicitor or licenced conveyancer to carry out all the legal work involved with buying a home. The fees are typically £500-£1,500 including VAT at 20%. They’ll also carry out local searches (which usually cost around £250-£300) to check if there are any local plans or issues that may stop you buying your first home.

Click here to view our Fees breakdown infographic.

Average age - https://www.telegraph.co.uk/property/buy/number-first-time-buyers-reaches-10-year-high-despite-average/

Average house price - https://www.gov.uk/government/news/uk-house-price-index-for-april-2018