Buying a house can be a daunting time for anyone, but if you are new to the process, it can be a total minefield. From mortgages and surveys through to solicitor's fees and legal documents, here are 11 things you need to be aware of before buying a property.
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1. Get your mortgage application in early
Having your mortgage in principle in place will make you more attractive to sellers if they are looking for a speedy transaction - and it will save you time in the long run.
2. Consider a virtual mortgage broker
Online mortgage brokers are becoming more popular than ever, especially with the pandemic. Make the process super easy with an online platform like Habito or Trussle.
Now is a busy time for the property market
3. Utilise your contacts
If you know someone else who has recently bought a property, don't be afraid to pick their brains. The process will be fresh in their minds, and they will be able to share their experiences to advise you on your purchase.
4. Save a big deposit if you can
Pete Mugleston, MD and Mortgage Expert for onlinemortgageadvisor.co.uk is on hand to brief you on deposits.
He says: “A mortgage deposit is a lump sum of money that you pay towards your home upfront, and it is a percentage of the total house price, usually between 10-20%, but some lenders will accept a minimum of 5%. Back in March this year, the government announced a new 95% mortgage scheme which will help first-time buyers get a mortgage with the minimum 5% deposit, and more lenders will be able to offer a 95% mortgage.
"Remember, the bigger deposit you put down, the more likely you are to land a low interest rate, and can help you get a mortgage if you have bad credit.”
5. First-time buyers shouldn't be afraid to negotiate
The current property market is favoured towards sellers with rising prices and limited availability, however, that doesn't mean you can't get a bargain. If your prospective home requires extra work which will cost money, you can haggle that off the price. Remember, first-time buyers are attractive to sellers because of the smooth process so you have that to your advantage.
6. Remember the extra fees
You've been busy saving for your deposit, but what about the additional extras? Set aside £1,000-£2,000 for your solicitor's fees, and also think about moving costs like hiring a van.
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7. Look ahead to future renovations
Thomas Goodman, property expert at MyJobQuote.co.uk recommends: "When viewing a house, think about what renovations are needed straight away and ask about any structural work needed. Renovations and structural work are what costs the most when renovating a house, and if you have a strict budget you need to know exactly what renovations are needed and how much they’ll cost."
8. Insurance matters
Not only is it a sensible thing to have insurance, but it's also a necessity when it comes to buying a house. Most mortgage lenders will request that you have buildings insurance in order to proceed with your contract.
9. Be prepared to play the waiting game for your first home
Some processes when it comes to buying a house are painfully slow - so don't be surprised if there are a few months of quiet while things are being checked off in the background.
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10. Don't dismiss a project for your first home
Thomas Goodman of MyJobQuote.co.uk says: "You can really make a project purchase your own and it can be exciting to see it all come together. First, you must have a budget in mind and stick to it. When viewing the home take a notepad and pen and write everything down that will need renovating and decorating. Create a list of costs and add them up to see if you can do it all within budget."
11. It's okay to ask questions (you're a first-time buyer!)
Buying a house is a scary and complicated process for anyone, especially if it's your first time. Don't feel overwhelmed by the jargon and paperwork, if you don’t know, just ask. Mortgage brokers, solicitors and estate agents know a lot!
Buying a house comes with lots of paperwork
12. There are different types of surveys
First up, your lender (mortgage provider) will carry out a valuation survey to check your home is worth the value. In addition to this, you can also pay for your own survey which is more in-depth. Here you have options too, you can go with a HomeBuyers report which is pretty common and standard or a Full Structural Survey which is recommended on old or unusual buildings.
13. Get your documents prepared
As well as the usual ID and proof of address, any mortgage application will require much more information including things like bank statements, payslips and pension plans. Ensure a swift process by getting these altogether electronically before you even commence your application.
14. Always read the small print
You will be given a mountain of paperwork throughout the house buying process and it is really important that you give the terms and conditions a good read.
15. Consider saving up a deposit with an ISA
Pete Mugleston, MD and Mortgage Expert for onlinemortgageadvisor.co.uk explains why an ISA could be a good ideas.
“Help-to-Buy ISA’s are currently no longer open to new applications, but those who already have one open have the ability to save for a mortgage deposit with tax-free interest. This type of ISA allows you to save up to £200 each month towards a house deposit, and the government will add 25% (maximum £3,000) at the end.
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"This type of ISA can be used for any residential property across the UK up to £250,000 (up to £450,000 in London). Unlike other government schemes, you’re not restricted on the type of property you buy, as long as it's in the UK and you intend to live in the property, you can put your ISA funds towards it.
“A Lifetime ISA is another fantastic way to save for a mortgage deposit. A Lifetime ISA does the same as the Help-to-Buy ISA whereby it gives you a 25% top-up on your savings, and it’s designed to help you buy your first home and to also save for retirement. The main difference is that you can save £4,000 a year in a Lifetime ISA compared to £2,400 in a Help-to-Buy ISA, which means a much bigger bonus. However, with a Lifetime ISA, you do need to wait a year before using it to buy a home, and there is a penalty for withdrawing anything early.”
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