First-time buyers aren't left wanting when it comes to getting advice on buying a property. There's plenty of help to buy schemes designed for them as well. But if you've already been a first-time buyer and are considering your next move, what help can you get?
Find a better mortgage deal
You don't have to stick with your current mortgage provider when you move home. You could speak to your provider to see what deals they could offer you, or ask a mortgage broker for advice. Brokers will show you mortgages from numerous providers. The market's likely changed since you bought your first home, so prepare for different terms, interest rates and deposit requirements.
Check the terms of settling your current mortgage with your lender. If you're still in a fixed-rate period, there could be hefty exit fees and early repayment fees. Even if you want to stay with your current lender and transfer the mortgage to your new property, there’s likely to be costs involved, and not all mortgages are portable.
Check your credit history
Just like when you applied for your first mortgage, your credit history will need checking- and the healthier it is, the better the mortgage deals. Get a head start by checking your record with all three credit reference agencies:
- Equifax - you can check your Equifax report for free with CredAbility.
Your credit score’s likely to have changed since you got your first mortgage. If you’ve been practising good credit behaviour, then it could’ve increased. However, other factors could have brought it down, such as changing jobs or taking out more credit. Now that you've decided to move home, limit the number of applications you make for credit. This will reduce the number of hard searches on your file. Too many will harm your score.
If you’re thinking about getting a mortgage in principle, check which lenders do hard searches first.
Selling your current home
When you’re ready to start marketing your home, you’ll need to find out which estate agent will work for you. Don’t base this on cost alone. Have a look at how they advertise other properties and ask them what they’ll be doing to sell your house. Now you’ve got a property to sell, you won’t be at the bottom of the chain, so timing is crucial. If you think your property might take a while to sell, start marketing it as soon as possible. If it sells before you've found another property, you might have to consider where you and your possessions would go in the meantime.
Check moving is worth it
Moving home is expensive. Research the additional costs that you’ll incur on top of the purchase price. Consider the next property you buy and how long you’ll stay there. With all the costs involved in moving, it wouldn’t be wise to buy a property only to find that you outgrow it very quickly.
As a first-time buyer, you may have been given good deals for certain things and now find yourself paying more for services like solicitors. You'll also have to pay for a solicitor to handle the sale of your property, something you wouldn't have had to think about before. If you've accumulated more furniture and personal belongings, then removal costs will be higher.
Consider stamp duty
Now you’re moving on, remember to factor in the cost of stamp duty if you didn't before. If you're looking to purchase something higher in value than your current property, you might have to pay more stamp duty. Currently, the stamp duty holiday is running until the end of September 2021 - although it will start to get phased out at the end of June.
If you complete a purchase on a new property before the end of June, you won’t pay stamp duty if the purchase price is less than £500,000. From July to September 2021, the threshold will be reduced to £250,000. From October, it will be back to the usual threshold of £125,000. But there are other things to consider. Saving some stamp duty if you buy before the end of the holiday, might mean you pay more in other areas.
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