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4 minutes
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Friday 1 May 2015
Friday 1 May 2015
Friday 1 May 2015
Friday 1 May 2015
If you’ve never taken out a mortgage before, navigating the process can feel overwhelming. This guide offers a balanced and informed overview of the mortgage market today, highlighting key factors to consider as a first-time buyer.
1. Finances
Since April 2014, mortgage lending rules have tightened. Lenders are now required to conduct detailed audits of your finances to ensure you can afford repayments. To improve your chances, you’ll need to:
Demonstrate monthly savings.
Reduce your outgoings.
Minimise or eliminate debt.
Show evidence of a regular income.
Maintain a clean credit rating.
Key Financial Tips:
Calculate the total deposit you’ll need and plan your savings accordingly.
Beware of high service charges if you’re buying a flat, as they can significantly increase monthly costs.
Consider buying at auction or negotiating directly with the seller to cut out estate agent fees.
2. Government Schemes
The Government has introduced initiatives to help first-time buyers, such as the Help to Buy Scheme.
Help to Buy:
Allows you to purchase a home with just a 5% deposit.
Provides a loan of up to 20% of the property’s value, making home ownership more achievable.
If saving a large deposit feels daunting, exploring government-backed schemes like this could help you secure a mortgage sooner.
3. Location Matters
The location of your new home is crucial, not just for convenience but also for its long-term value.
Questions to Ask About the Area:
Is it up-and-coming, with potential for property value growth?
Are there good schools nearby?
Is the area well connected with transport links?
What amenities, shops, and leisure facilities are available?
Is the price of the property reasonable for the postcode, or does it exceed the area’s “ceiling price”?
4. The Legal Stuff
When buying a property, you’ll encounter various compulsory costs, including:
Legal fees (sometimes included in the mortgage but more expensive over time).
Stamp duty (depending on the property value).
Surveys on the property (essential for identifying potential issues).
Cost-Saving Tips:
Shop around for a cheaper solicitor than the one recommended by your lender.
Understand all fees charged by estate agents and conveyancing solicitors.
Ensure everyone involved is covered by a professional body and insured.
5. Ask the Right Questions
When viewing a property, it’s easy to fall in love at first sight. However, asking searching questions now can prevent heartache later:
How long has it been on the market?
How many offers has it had?
What are the neighbours like? Have there been disputes?
Is there up-to-date paperwork for the gas, electricity, and boiler?
What is the availability of parking spaces?
What is the cost of council tax?
Are there any signs of subsidence or dry rot?
Are there plans to build anything undesirable nearby?
If you’re buying a flat, check the reputation of the management service.
6. Dealing with Sellers
Having a good relationship with the sellers can help your purchase go smoothly.
Important Tip:
If you see a property you really want, ask the seller to take it off the market as a condition of your offer. This prevents being “gazumped” by another buyer.
7. Setting Up Home
Buying a property is only part of the cost – you’ll also need to budget for setting up home.
Key Costs to Factor In:
Removals: Get several quotes, as prices can vary widely.
New furnishings, kitchens, or bathrooms.
Improving the exterior and the garden.
If renovations are required, obtain quotes before buying to avoid paying inflated prices later.
Final Note
Buying a home is an exciting yet complex process. By taking the time to organise your finances, ask the right questions, and plan for additional costs, you’ll be better prepared to navigate the journey successfully.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.
If you’ve never taken out a mortgage before, navigating the process can feel overwhelming. This guide offers a balanced and informed overview of the mortgage market today, highlighting key factors to consider as a first-time buyer.
1. Finances
Since April 2014, mortgage lending rules have tightened. Lenders are now required to conduct detailed audits of your finances to ensure you can afford repayments. To improve your chances, you’ll need to:
Demonstrate monthly savings.
Reduce your outgoings.
Minimise or eliminate debt.
Show evidence of a regular income.
Maintain a clean credit rating.
Key Financial Tips:
Calculate the total deposit you’ll need and plan your savings accordingly.
Beware of high service charges if you’re buying a flat, as they can significantly increase monthly costs.
Consider buying at auction or negotiating directly with the seller to cut out estate agent fees.
2. Government Schemes
The Government has introduced initiatives to help first-time buyers, such as the Help to Buy Scheme.
Help to Buy:
Allows you to purchase a home with just a 5% deposit.
Provides a loan of up to 20% of the property’s value, making home ownership more achievable.
If saving a large deposit feels daunting, exploring government-backed schemes like this could help you secure a mortgage sooner.
3. Location Matters
The location of your new home is crucial, not just for convenience but also for its long-term value.
Questions to Ask About the Area:
Is it up-and-coming, with potential for property value growth?
Are there good schools nearby?
Is the area well connected with transport links?
What amenities, shops, and leisure facilities are available?
Is the price of the property reasonable for the postcode, or does it exceed the area’s “ceiling price”?
4. The Legal Stuff
When buying a property, you’ll encounter various compulsory costs, including:
Legal fees (sometimes included in the mortgage but more expensive over time).
Stamp duty (depending on the property value).
Surveys on the property (essential for identifying potential issues).
Cost-Saving Tips:
Shop around for a cheaper solicitor than the one recommended by your lender.
Understand all fees charged by estate agents and conveyancing solicitors.
Ensure everyone involved is covered by a professional body and insured.
5. Ask the Right Questions
When viewing a property, it’s easy to fall in love at first sight. However, asking searching questions now can prevent heartache later:
How long has it been on the market?
How many offers has it had?
What are the neighbours like? Have there been disputes?
Is there up-to-date paperwork for the gas, electricity, and boiler?
What is the availability of parking spaces?
What is the cost of council tax?
Are there any signs of subsidence or dry rot?
Are there plans to build anything undesirable nearby?
If you’re buying a flat, check the reputation of the management service.
6. Dealing with Sellers
Having a good relationship with the sellers can help your purchase go smoothly.
Important Tip:
If you see a property you really want, ask the seller to take it off the market as a condition of your offer. This prevents being “gazumped” by another buyer.
7. Setting Up Home
Buying a property is only part of the cost – you’ll also need to budget for setting up home.
Key Costs to Factor In:
Removals: Get several quotes, as prices can vary widely.
New furnishings, kitchens, or bathrooms.
Improving the exterior and the garden.
If renovations are required, obtain quotes before buying to avoid paying inflated prices later.
Final Note
Buying a home is an exciting yet complex process. By taking the time to organise your finances, ask the right questions, and plan for additional costs, you’ll be better prepared to navigate the journey successfully.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.
