First Time Buyers
Getting a foot on the property ladder can be difficult as it is a massive investment. Once you have taken those initial steps to owning your own home it can be very rewarding and for most people it is their biggest financial commitment.
First things first- look at how much you can afford as how much you can spend will depend upon how much can be borrowed.
Buying a home usually costs more than you think and as such you need to ensure you budget effectively and have a contingency fund for some matters which may arise. Something to be aware of are lenders mortgage arrangement fees as some mortgage companies offering the best rate can add a substantial amount of fees onto the loan or even make them payable up front.
Some other factors you need to consider are buildings and/or contents insurance, life insurance if you have a joint mortgage or any dependents, utility bills and council tax. If you are buying a leasehold property you may also need to pay ground rent and/or service charges.
Don’t forget you need to budget for your legal fees, removal costs and stamp duty which is a government tax.
Next go house hunting and once you have located a home you like, don’t be afraid to ask to have another look around. Take someone you trust with you as it is always useful to have another pair of eyes.
Don’t forget if the property is empty it can look surprisingly large. Never focus purely on the superficial aspect of the property as decor and furnishings can be changed!
If you feel ready to put in an offer do so but be sure to work out exactly how much you can afford and make the offer on this basis. If you are a first time buyer you are not in a chain and as such can have more bargaining power. If however you are unable to reach an agreement and a deal at a price you want, don’t be afraid to walk away.
Next you need to decide which type of survey to have. There are three types of survey, the most basic being a mortgage valuation which is usually organised by your lender. This simply values the property and does not identify any potential problems with the property
You may wish to have a homebuyer’s survey as these are far more thorough and should reveal any serious defects or alert any potential issues.
If you are buying an older property you may decide to have a full building survey which goes into the structure and overall condition of your property in greater detail.
If the mortgage valuation is less than your offer then the maximum you can borrow may not be the same as what the lender will advance to you. If you can’t persuade the seller to reduce the price you may need to either make up the shortfall or reconsider your purchase!
Your solicitor will carry out searches on your behalf; these are usually water & drainage, environmental local and chancel. You may also require a mining report.
Usually a lot of correspondence will occur behind the scenes as enquiries are raised by the purchaser’s solicitor in order to clarify issues or obtain further information.
If you, your solicitor and surveyor are happy then it is time to sign the contract and thereafter exchange with the seller. A deposit is required at this stage; usually 10% of the total price.
It may be that exchange and completion take place on the same day but if contracts have already been exchanged then we can then proceed to completion. This is where money changes hands between the solicitors and the property legally becomes yours. The remaining purchase price of the property is transferred either wholly from your lender or part mortgage advance and the balance by you.
Congratulations you now have the keys and own your own home!
16 June 2014
The contents of this article are for the purposes of general awareness only. They do not purport to constitute legal or professional advice. The law may have changed since this article was published. Readers should not act on the basis of the information included and should take appropriate professional advice upon their own particular circumstances. (50587)