A house buyers guide
According to recent statistics, over half of Britain's working population
cannot afford to buy a home. This statistic highlights the difficulties
faced by first-time
buyers trying to get on the property ladder and even the difficulties
that can be faced by people moving up the housing ladder.
Even if you
have an idea of the type of property you'd like, what sort of things
should you look out for? Where do you start?
We've put this brief guide together to help you through the home
buying process. For an explanation of any of the terms used, hover
the mouse over the underlined term.
STARTING YOUR SEARCH
If you understanding why you want to buy it will help
you find the most appropriate property for your need eg. are you
getting married, changing your job,
starting a family or moving out of your parents' home.
Similarly, ensure you should have a clear idea of where you want
to live eg. close to your work, near friends/family, close to local
amenities, near a good local school, away
from the town/city or in the centre of the town/city. In a new house or even a thatched cottage.
Decide what's important to you personally and then base your search
on these needs.
The Perfect Property?
Be aware that you're not necessarily going to find your perfect property
within your price range, so you might have to be prepared to compromise.
It's a good idea to decide what's really important to you before you
begin your search. Making a list of the essential factors and the non-essential
'but nice to have' factors, will help you to focus your search.
HOW MUCH WILL IT COST?
Moving home can be a costly task, and in fact the costs
can be more than many people first think.
In addition to the actual cost of your new home, you will need to
think about legal fees, stamp duty, insurances and removal
costs – some
of these can really eat into your savings.
The costs can be broken down into two types, one-off costs and regular
costs. Examples of both types are shown below :-
One-off costs
Mortgage Application fee
Valuation/survey fees
High lending fee
Legal expenses
Stamp Duty - Click here for our Stamp Duty Tax Calculator
Registration Fees (Scotland Only)
Removal expenses
Regular costs
Mortgage repayments
Investment payments (if linked to mortgage)
Buildings insurance
Contents
insurance
Mortgage payment protection
Life cover
Council tax (see our article on reducing your council tax bill)
Household bills
Maintenance costs
HOW MUCH CAN I BORROW?
Before starting your property hunt, you will need to know how large
a mortgage you can get – there's no point looking at properties
out of your price range.
Approaching a lender
Start by approaching several lenders and ask how much they will
let you borrow. Many lenders now offer you an instant quote on their
website – a
quick, easy and relatively anonymous way to get a basic idea of
what you can afford.
If you don't have the time to speak with each individual lender,
an Independent Financial Advisor (IFA) or Mortgage Broker will shop
around for you. You should be ready to answer several questions about
your finances so that the IFA knows that they are providing information
about the mortgage deals that match your needs before you make the
mortgage loan application.
Once you have found
yourself a competitive rate, it is a good idea to request an 'agreement
in principle' that confirms the amount
you are able to borrow. It may be that you can use this to add
leverage to any offer you make on a property by showg that you have
the funds availalble for the purchase.
The amount you can borrow from a lender will be based on two factors;
the size of your deposit and your salary. Lenders are usually prepared
to lend you around three times your salary, or if you are buying
as a couple, this rises to three times the first
income plus the second income (or two and a half times your joint
income).
When lenders decide how much they are prepared to lend, they will
try to make sure you do not overstretch your finances and can make
the mortgage payments. They will need to see the following :-
- Proof of salary from your employer (or copies of your audited accounts
if your are self-employed)
- Evidence of the length of your contract (if you are
working on a short term contract)
- Evidence of any regular rent payments
The lender will also consult a credit reference agency and may want
to see copies of current bank account statements.
HOUSE HUNTING
Once you have identified your ideal property and worked out your
budget, you should begin searching to find out what is available.
Average House Prices
To
see the average
prices of houses sold over the past six months for a selected
postcode visit our house price page
For a wide selection of property for sale take a look at our home
builders page.
THE HOME BUYING PROCESS
The home buying process is not the same throughout the UK.
In Scotland, the conveyancing process differs greatly to that in
the rest of the UK. As soon as the seller has accepted a written
offer
on a property, it is legally binding. At present this is not the
case in England and Wales, where a buyer can be gazumped at the last
minute.
Your solicitor will be able to give you
up to date details about the house buying process for the property
you are buying in your chosen area.
|
Moving 