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 that comes from knowing what your mortgage repayments 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 Base Rate, whether it goes up or down.

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

Variable rate mortgages - There are several types of variable rate mortgages such as standard variable and discount. Like tracker mortgages they don’t protect you from future rate increases but they could allow you to 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 of England Base Rate moving. This includes the West Brom but, if we do change our Standard Variable Rate (SVR), we’ll make sure we tell you by writing 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 withdraw certain types of mortgages or change its range of available mortgages. 

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 on a deposit, the lower your repayments are likely to be. This is because, first of all, you’re paying off less of a 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 - the booking fee is the charge that a bank or building society may put on a product to secure the rate of the mortgage. This is sometimes reffered to as the application fee. The usual cost of this fee is from £100-£200. 
• Completion fee - This is the fee for the mortgage product. This may also be referred to as an arrangement fee. You may have the option to add this to your mortgage in most cases although this can affect the amount you owe, your interest and your monthly payments.
  
• Stamp duty - stamp duty (or Land and Buildings Transaction Tax in Scotland) 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.  
• Valuation fee - the mortgage lender will assess the value of the property to establish how much they’re prepared to lend you.  This fee can be anywhere from £150 up to £1,500 according to the property’s value.  Some lenders might not charge you for this, depending on the type of mortgage product you choose. It’s important to remember that the lender’s valuation is not an extensive in-depth survey and may not identify all the repairs or maintenance that might be necessary.
• Survey fee - before buying a house you should have it checked by a surveyor.  This will uncover any issues and concerns about the property before you buy it.  The survey could be a basic home condition survey, costing around £250; or a full structural survey upwards of £600.  Never underestimate the value of a good detailed survey as it can save you money on repairs later down the line. 
• Legal fees - you will need a solicitor or licenced conveyancer to carry out all legal work when buying and selling your home.  They will also do local searches, normally for about £250-£300, which are crucial when checking if there are any local plans or issues. In addition, bear in mind the legal fees, typically £500-£1,500 with VAT at 20%.

Click here to view our Fees breakdown infographic.

Average age - http://www.theguardian.com/money/2015/jan/06/first-time-home-buyers-property-uk

Average house price - http://www.bbc.co.uk/news/business-35197410

First mortgage - http://home.howstuffworks.com/real-estate/buying-home/mortgage2.htm