First Homes Cardiff

Decide how much you can afford to spend

The main thing that everyone wants to know when they start to look for a home is how much can I borrow?

If you speak to a mortgage lender, you will then be able to work out what you can comfortably afford to pay each month. That will give you an idea of the price range that you should be looking at when you start looking for your home.

To work out how much you can afford to pay each month, you need to consider all of your outgoings, including any additional outgoings you may have in your new home, such as home insurance, utility bills, council tax, TV and broadband etc.

You will need to account for additional costs and fees when buying a home.

You will need to make sure you can cover all the normal costs associated with buying a house.

These include:

  • Valuation and survey fees
  • Solicitor and land registry costs
  • Search fees
  • Mortgage deposit (depending on the lender)
  • Land Transaction Tax (commonly known as stamp duty). This will depend on the area and value of the property, which you can calculate by visiting the Welsh Government website.
  • Plot Reservation fee (depending on the housing developer’s policy).

As well as these one-off payments associated with buying the house, you will also need to make sure that you have suitable finances to cover on-going expenses such as:

  • Monthly mortgage payments,
  • Council Tax
  • Utility bills,
  • Property maintenance and repair costs,
  • Buildings and contents insurance,
  • Life insurance or mortgage life insurance,
  • Service charge and ground rent (for leasehold properties).

Types of Ownership

Freehold

The freeholder of a property owns it outright, including the land it is built on. As a freeholder, you have full responsibility for the maintenance and repairs of a property and its land.

Leasehold

If you are buying a leasehold property, you will own your own home for the length of your lease agreement with the freeholder, the owner of the property. The lease will stipulate who is responsible for maintaining and repairing different parts of the property and any conditions that you must meet. You must also pay a ground rent and any service or management charges associated with the property. Most flats are leasehold properties.

When you have decided on the home you want

If you decide that you’d like to buy a shared equity property, you will need to first register for our scheme so that your eligibility can be checked.  If you qualify for our scheme, you will receive details of the shared equity properties as they become available.

If you are interested in a particular property we have advertised, you will need to fill in a separate application form. Don’t forget to include all the required evidence asked for.  We aim to assess all fully completed applications as quickly as possible and will contact you to let you know if you have been successful.

How does a Shared Equity scheme work?

Shared Equity allows you to buy 100% of a property for a percentage of its open market value, typically, this is 70%. Unlike shared ownership, there is no rent to pay on the remaining 30% cost of the property.  The remaining 30% share is set as a legal charge against the property, which you can often buy later. Read more information about Shared Equity schemes and how they work.

 

Apply for your mortgage

If you have heard from us that your application has been successful, you will already have a mortgage in principle certificate, so applying for a mortgage should be straight forward.

We will send you a provisional offer letter for the property, which will provide all the property details you will need to apply for your mortgage.  You will need to provide a copy of this letter to your mortgage advisor or bank if you are applying for your mortgage direct.

If you are applying for a new build property, the developer often has a Mortgage Advisor, which you may wish to use to assist you in getting your mortgage.

If you are buying a resale property, we can provide you with a list of mortgage providers who support shared equity housing, but we cannot make recommendations.

You will need a mortgage offer from your chosen lender before we can make you a formal offer of the property and exchange contracts.  So as soon as you receive your mortgage offer, please email us a copy, so we can make sure it is suitable for our scheme. Once we have received it, we will send you a formal offer for your chosen plot and send the contract papers to your appointed solicitor.

Buying a new build property

If you are buying a new build property, you will need to reserve it with the developer and pay a plot reservation fee. To reserve your new home, you will need to make an appointment to sign a reservation form and pay the fee, which is usually non-refundable should you decide not to purchase. The developer’s sales team will talk you through what comes as standard in your new home and if you are able to make any upgrades to the standard specification. Subject to the developer and the build stage, you may be able to choose your kitchen and bathroom fittings.

Appoint a solicitor

Your solicitor will take care of the legal side of the purchase for you. Let your solicitor know straight away that you are purchasing a shared equity property and provide them with a copy of your provisional offer letter to ensure all the correct documentation is in place. Please inform your solicitor that the council will not send out any contract papers until we have received a copy of your mortgage offer.

Tell us and any housing developer who your solicitor is as soon as you have appointed one.

Valuation

Your lender will carry out a valuation of the property to ensure that they are happy with the purchase price. Once the lender is satisfied, they will issue a mortgage offer to you.

Remember to send us and your solicitor your mortgage offer once you have accepted the offer terms.

Arrange Insurances

Buildings insurance

When you buy a freehold property, you are obliged to take out building insurance by your mortgage provider in case your home is damaged and needs repair.

If you are a leaseholder, building insurance will normally be included in the payments you make to the freeholder as part of your service and management charge. You should ask your solicitor to check this is covered in the lease.

Contents insurance

This covers your home contents against loss, damage or theft. Whether you are a freeholder or leaseholder, you will need to take out contents insurance if you wish to protect your belongings.

Exchanging contracts

Once you and your solicitor are satisfied that everything is in order, contracts can be exchanged. Contracts will be exchanged between your solicitor, the council solicitor and either the developer’s solicitor or the solicitor of the owner of the property you are buying.

You will have to pay your deposit on exchange of contracts. This will be the percentage amount agreed as part of your mortgage application.  This is the point at which the buyer and seller are legally bound by the terms of the contract. If you pull out at this stage, you will lose your deposit and it will be deemed a breach of contract.

Completion

You should discuss with your solicitor the anticipated completion date. You should make sure that you have agreed a final date that leaves you enough time to organise everything for your move.

Once your final completion date has been confirmed, you can organise and confirm the practicalities of your move. Booking a removal company, arranging any new connections, telephone, broadband, television services etc.

Ensure that you contact household utilities such gas, electric and water services. Also don’t forget your bank, insurances, doctor, DVLA and TV licence providers. There will no doubt be others that you will need to update.

Moving Day

Your solicitor will let you know as soon as your home has legally completed, and you can collect your keys.

Don’t forget to make a note of the meter readings on your gas, electric and water utilities, and don’t forget to take the readings from the home you are moving from and tell your providers you have moved.