Finances
Buying your home can be a daunting process. Whether you are a first time buyer, downsizing, or buying your first family home it is likely to be one of the biggest financial commitments you’ll ever make so, you need to know you are making the right decisions.
The first step is finding out how much money you can borrow and what's affordable for you.
Deposit
The minimum deposit required is 5% of the value of your property. However, the larger your deposit the better mortgage rates and mortgage offers will be available to you. Your deposit can be saved or can come from the sale of your current home.
Mortgage Fees
When looking for a mortgage always look at more than one broker/bank/online site. Think of it as far more expensive car insurance, you wouldn’t always just choose your first quote!
Mortgage brokers are a good option, especially for first time buyers. They can help advise you on the various mortgages available, how much you can afford to borrow and some have access to special mortgage offers that are not available on the open market.
The costs of your mortgage repayments will be dependent on what your deposit is and how much you borrow.
There are other fees that you need to consider when looking for mortgage. Below is an example based on a recent mortgage placed with MAB and Nationwide.
Mortgage fee, this is the fee you pay to take out the mortgage and costs around £1500
Mortgage valuation is around £350-400
Transfer of funds fee of £20
Redemption charge of £65.
Viewings
Viewings can be done with an agent or directly with the homeowner depending on yours and the sellers preference. There’s a lot to think about during a viewing so here is a quick checklist of things to look out for.
Damp. Keep an eye out for dampness. Does it smell damp? Are there watermarked walls or ceilings or flaky plaster?
Roof. How old is the roof, has it had any work done recently? Ask these questions and take a look at it if the tiles and guttering looks tired this is a cost you need to take into consideration.
Windows. Is there condensation on the windows? If the window has condensation inside the glass this shows the window is blown and could indicate poor insulation. If the frames are cracked and rotten then they will need to be replaced at some point too.
Area. Location is very important when looking for a house. Does it have good schools, transport links, parks, and green space? Look for the nearest shop, restaurant and of course a decent pub. Has it got a good sense of community? Always look at the crime rate. It’s always good to drive around and get a feel of the area.
Which way does the house face. A south facing garden will get a lot more sun than north facing. Don’t be shy to get a compass out. You can easily download apps on your phone.
Potential. Could you boost the value of the property? See if you can add an extension or a roof conversion. If it is a listed building it can be very difficult to make changes to the property so always check this first.
Condition. Assess the general condition of the house. Look out for worn carpets, cracked walls, tired floorboards, and skirting. Make sure you understand how much work the property needs so you can assess your finances.
What is included. See what the owners are willing to leave. Are they taking all the white goods, cooker and curtains? If there is a wood burner will they leave this?
Solicitors
You’ll need to appoint a solicitor or conveyancer to represent you. Solicitors will help carry out all legal checks on your property such as searches and making enquiries.
We are happy to recommend a solicitor and have also created an easy to follow guide on how to pick one and what they do for you.
Offers
You know how much you can afford, you’ve found a home, now it's time to make an offer. There is a lot to consider when making an offer. You don’t want to overpay but you found your dream home and you don't want to lose it. So, here are a few things to help you decide on an offer.
What's the market telling you? Research the area to make sure you aren't overpaying. If you go onto Zump there will be an estimated value and last sold price. You can also look on Zoopla and see if there are previous listings of the property. On Rightmove you can see what other houses on the road have sold for too. So do as much research as possible.
Talk to your Zump advisor. Ask the following questions.
How long has the owner lived at the property. If they haven’t lived there for long find out why they are now deciding to sell.
Has the owner found another property? Check the chain if they have. (the chain is the houses being bought and sold above and below you).
Have many people viewed and do they have other offers.
Is there a minimum price the seller would accept?
Once you have this information you can decide to make an offer over, under, or for the asking price.
The asking price is what the owner would ideally like to get for the property. However, people understand they may have to accept under the asking price. If a seller is in a hurry, a recent property sold for less or you're a cash buyer the owner may take a lower price. Also if there is work that would need to be done they may accept taking this money off your offer.
If your first offer is not accepted you should be able to offer again. However, some agents go straight to sealed bids and best and final offers in these circumstances you may not be able to offer again.
In competitive markets, properties are snapped up quickly and you may find yourself bidding against other buyers. In these circumstances, it is recommended to pay the asking price or above but make sure you are not paying over the odds. Do your market comparison and stick to your budget!
When buying in a competitive market it is important to make your offer stand out. If you have a property up for sale you’ll be less favourable than a first time buyer without a chain.
When making an offer, set yourself an upper limit. If you're not in the most competitive position consider going slightly lower - between 1-5% depending on the price of the home - so you have room for upward negotiation. When making an offer we suggest you email it with the following information.
Decision in principle
Proof of deposit
Your position, i.e. First time buyer, Sold subject to contract
Are you flexible on move in date
And your solicitors details
This shows you are ready to go and will put you in a really good position. You can add in why you would like home, the emotional bit, this can sometimes win over owners.
If your offer is rejected, weigh up your options and if you can afford to make a higher offer.
Stamp duty
Stamp duty is the property transaction tax you need to pay when buying a property. It’s due to be paid upon completion for properties over £125,000. The amount you pay depends on the property you purchase. You can calculate this cost below.
If your home is over £500,000 there will be no first time buyer exemption and standard rates will apply.
Moving into your new property
Packing will seem like an endless task but it will one day be complete. Then you get to unpack, how exciting is that!
Removals booked and the van packed you are off to your new home.
When you get there check everything they were meant to leave behind is there. If anything is missing contact your solicitor ASAP.
Check everything is working how it should and make sure you have insurance for your new home set for the day you move in.
And don't forget to tell people you are moving.
Tv
Phone
Internet
Bank!
Council
Employers
DVLA
And your friends and family, you don’t want to miss those lovely birthday cards that might contain a helpful £5