The biggest financial shock for many first-time buyers stems from a wave of costs hitting in the first few months of homeownership, not just the deposit. A poll of 1,000 first-time buyers found that facing multiple upfront costs in a short space of time was the number one part of the homebuying process they wished they could avoid. Specifically, 35% of first-time buyers ended up paying rent and a mortgage at the same time, with 32% reporting an overlap lasting one to two months. The News Portsmouth also reports that 64% of those renting at the point of purchase found the homebuying process challenging.
Mortgage rates have been heading up throughout March, with lenders announcing increases almost daily. A mortgage broker has cautioned against waiting to buy a home as mortgage rates rise. The war in the Middle East has contributed to rising mortgage rates as markets price in higher interest rates to control inflation. Events in the Middle East are driving mortgage rates up and also driving demand and sentiment in the property market down.
A mortgage expert has advised first-time buyers on how to avoid overlooked homebuying headaches. The weakening of sentiment and demand in the property market creates an opportunity for first-time buyers to negotiate hard on asking prices.