As a first time buyer in the current economic climate it is important to arm yourself with as much knowledge as possible and make sure that you are prepared, as buying your first home can be very stressful and confusing. A number of factors has led to the number of first time buyers purchasing property falling over the past year, and these factors include lack of mortgages, the effects of the global credit crunch, and falling property prices. However, for those that are still looking to get onto the property ladder it is vital to carry out thorough research.

Affordability is an important factor to consider when it comes to purchasing your first home, as if you struggle with money you could find that the property is taken off you before you know it. There are a number of different areas to look at when it comes to your finances. In order to find out what sort of property you will be able to afford you need to work out how much you can borrow based on your income, as this can differ from one lender to another.

Also, before you make any decisions make sure that you work out all of your upfront costs, as this may determine whether or not you can take out the mortgage. Some of these upfront costs include your deposit, arrangement fees, and solicitors fees. On top of the upfront fees you also need to make sure that you can afford the monthly repayments on the mortgage comfortably, as otherwise you could end up losing your home if you start getting into arrears. Go through your income and outgoings thoroughly to see if the repayments are affordable.

You should make sure that once you are happy with the mortgage costs and repayments, and the lender has approved your application, you get the approval in writing, as this will boost your chances when you find a property and put an offer in because the seller will know that you have already been approved.

It is worth remembering that lenders are requiring larger deposits from even first time buyers these days due to the current financial climate, so you may need to find a large sum to put down by way of deposit. Wherever possible you should try and put down as large a deposit as possible, particularly given that house prices are falling. Don’t forget that when you are working out whether you can comfortably afford the mortgage repayments you also need to ensure that you can afford other payments as well, such as bills, council tax, shopping, and other costs.

When it comes to whether to go for a variable or fixed rate mortgages you should remember that whilst interest rates are still set to fall at present you may enjoy more stability and peace of mind from a fixed rate mortgage, at least for the first few years.