Buying a house is one of the most important decisions you will ever make. It can be a very daunting experience but the advisers here at Caboodle will guide you through the process and find you the best mortgage deal for your circumstances.
In the current economic climate, you will probably need a deposit of at least 10% to put towards your house purchase before a lender will consider you for a mortgage. But don`t despair if you don`t have the 10% deposit to put down, there are alternative mortgage options for you to consider.
Our expert advisers can explain the different types of mortgages on offer, they will complete a fact find and budget planner with you and will recommend the right mortgage for your circumstances. We use some of the industry leading technology and will search our comprehensive panel on your behalf to find you the best mortgage deal so you don’t need to shop around.
Below is a list of things to remember when buying a new home:
Choosing a property
The first thing you need to decide when buying a property is what sort of area you want to live in. Make a list of the things that matter to you most. These might include having a good school, shops and restaurants nearby or convenient local transport links.
You also need to decide the type of property you would like to buy, how many bedrooms you want and whether you need a garden and garage. Are you looking for a property that is fully refurbished and ready to move in or do you prefer to take on a bigger project and buy a property that you can renovate and put your stamp on.
Whilst it is pretty common sense that bigger properties cost more to buy, remember that they may also cost more to run and maintain too. It is always worth checking how much the utility bills and council tax will be before proceeding with any purchase.
Checklist to consider…
Finding a property
Once you have decided what sort of property you are looking for and the area where you want to live, contact the local estate agents and ask them to send you details of suitable properties on a regular basis. If it is a competitive area where lots of people are looking, then try to get to know one or two of the agents to make sure they think of you first when new properties come on the market. It’s also worth calling the relevant estate agents once a week so they know you are a serious buyer.
You will probably see a lot of different properties in a fairly short space of time so keep a record of each one you have visited, together with a few notes reminding you of its good and bad points.
What happens next?
Once you have found your chosen property we will advise you on the correct mortgage and process it on your behalf. We will collect any supporting documentation from you and forward it to the lender. This can include some or all of the following:
There are a number of costs you may need to consider when buying a property. These can include Stamp Duty, Valuation Fees, Solicitors Fees, Estate Agent Fees, Removal Costs and more. For specific information on the various types of fees and whether they apply to you please see “Our guide on other costs to consider”
Finding a solicitor
When buying a property you will need to instruct a solicitor or conveyancer to act on your behalf. If you do not have one your adviser will be happy to recommend one for you.
The job of a solicitor or conveyancer comprises the following tasks:
Conveyancing may sometimes take longer than you imagined, but don`t be tempted to rush matters. Your new home is probably the most expensive purchase you will ever make, so it is important that nothing is overlooked.
Most mortgage lenders will be prepared to accept your choice of solicitor, as most experienced solicitors will have acted for the lender before. However it is always best to check whether the solicitor is registered and recognised by either ‘The Law Society’ or the ‘Licencesed Conveyancers Association’ before you get too heavily involved.
Alternatively, you can ask one of our advisers to put you in touch with a firm of solicitors we use on a regular basis. They are able to work with you in a variety of ways: over the internet, by phone or post, or even by personal visit if you are local, whichever is easiest for you.
Making an offer
Once you have found a property you would like to buy, the next step is to make an offer, normally through the estate agent. Most sellers build some leeway into their price, so it is usual to offer less than they are asking, but this all depends on how competitive the market is and if other people are interested.
In deciding what you are prepared to pay, bear in mind things like the state of repair and how much you would have to spend on building work or refurbishment. You do not want to be left short of funds to carry out any essential repairs.
Your first offer will probably be below the asking price. It is then up to the seller to either accept that price, or try to negotiate a higher one. If there are several potential buyers interested in the property, the vendor may have enough bargaining power to insist that the full asking price is met. Indeed, in a strong market, the property may sell for an amount higher than the asking price!
If you know that a number of people are interested in the property (perhaps because good properties of that type are scarce in the market), and you are very keen on it, you might consider offering the asking price up front to avoid a `bidding war`.
Once your offer has been accepted, the estate agent will confirm this in writing. You can then go ahead with arranging a survey and finalising your mortgage arrangements. The acceptance of your offer is not legally binding until you and the seller exchange contracts.
If house prices are rising or there is great demand and little supply, this can create the temptation for the seller to abandon your offer if a higher one comes along. This process is known as gazumping.
Being gazumped could leave you out of pocket on expenses like the legal costs and survey fee, but that is unfortunately a risk you have to take. The sale is only secured by law when contracts have been signed and exchanged.
Scotland and Gazumping
Under the Scottish system, sellers generally set a certain date by which all bids for the property must be in and make their decision from those bids. The seller then confirms his acceptance in writing (perhaps in a qualified form).
If the seller then gets a better offer and wants to change his mind, his solicitor will refuse to act for him on the new transaction, as doing so would leave him open to charges of professional misconduct. Rival solicitors are free to take the business if they wish, but this seldom happens in practice.
Instructing a survey
Once your offer has been accepted, a survey is required to assess the condition and value of the property. Your mortgage lender will require at least a basic valuation before allowing your mortgage to go ahead.
In almost every case, we recommend strongly that you get a more detailed report on the condition of the property to protect your interest. Make sure that the surveyor you use is a member of the Royal Institution of Chartered Surveyors or the Incorporated Society of Valuers and Auctioneers. If you prefer, we can recommend a surveyor and help arrange for this to be carried out.
There are two kinds of report beyond the basic valuation:
1. A House Buyer`s Report comments on the condition of only those parts of the property which are easily accessible or visible. The surveyor will recommend any further investigations he thinks are necessary, for example if he thinks the wiring needs checking or there is the possibility of some structural problems.
2. A Full Structural Survey involves a more extensive investigation. A full survey is more expensive than a house buyers report, but should tell you much more about any work that may need doing on the property if you buy it. Full surveys are recommended in many cases, particularly if you are buying a property that is more than 100 years old or the building is more than three stories high.
When you view the property yourself, look out for any signs of problems like cracks or damp patches so you can point these out to the surveyor later for him to inspect properly.
You should always budget for the cost of more than one survey. You might find the surveyors report on your first property uncovers serious faults (such as subsidence or rot), which means you want to withdraw your offer. Even if there are no problems with the property itself, another bidder could step in with a better offer at the last minute.
Either way, you will have to start the whole process again, and that includes organising a survey for the next property where your offer is accepted.
Where the survey does reveal serious problems, you are free to withdraw your offer. If the problems can be fixed, you may be able to use the survey results to negotiate a reduction in the sale price to compensate you for this extra expense.
Provided you are happy with the contents of the survey you can move to the stage of getting a formal mortgage offer from the chosen lender. This will detail all the conditions of the loan so it is important to read it carefully and ask either your solicitor or your adviser to explain anything you do not understand.
By this time, your solicitor should have a draft contract ready for you and the seller to sign. Once you have signed this contract, there is no going back, so be sure you are happy with all the sale arrangements before you commit yourself.
Typically at exchange (unless exchange and completion are on the same day), you will have to put down a deposit of 5 or 10% of the purchase price. You also need to make sure that the building is insured, as you are now legally obliged to buy it (your solicitor or adviser will help make sure that this happens).
The last point is very important. For example, there might be some doubt as to whether things such as the existing carpets are to be included in the sale price. You need to get this agreed in writing before you sign the contract.
When you have signed the contract, your solicitor will deliver it to the sellers solicitor in exchange for the contract the seller has signed. From this point onward, both you and the seller are legally committed to the deal.
Completing and Moving In
All that remains after exchanging contracts is to pay over the money needed to buy the property, less any deposit already paid at exchange. Your solicitor will get the mortgage funds direct from the lender and the remainder (if any) from you. This will then be transferred to the sellers solicitor on the date of completion. Once payment has been confirmed, you can then collect the keys to your new home from the estate agent.
As soon as you know your completion date, book a removal firm if you need one and make sure they are prepared to provide the level of service you need, e.g. pack your belongings as well as transport them.
Allow yourself plenty of time to sort out all your things before the removal men arrive. Decide what is going where and label each container with its contents and the room where you want it to go. It is sometimes a good idea to have a ‘removal pack’ easily to hand which includes important items such as the kettle, toiletries and food so you will be able to find them quickly and easily.
In the last week or two before the move, contact the companies that supply your gas, electricity, water and telephone services to let them know you are moving out. Ask them to arrange for the meters in your old home to be read so that you do not end up paying for services the next occupant uses. You may also want to ask the Post Office to redirect your mail for a while. You also need to let the Council know you are moving so that you are not liable for Council Tax payments at your old address.
Co-ordinate with the estate agent and the vendor to make sure that the meters are also read at your new home.
Once you move in, ensure that you carefully file away all the important information you have gathered throughout the process in case you need to refer to them at a later date. (i.e. addresses and contact details for the utilities, the Council, the original estate agent`s particulars for the property and your mortgage details and contact details for the people moving out)
For more information speak to one of our advisers today on 0845 219 0427 or 0121 308 9114. Alternatively complete the short online enquiry form to request a call back.
We can often arrange face-to-face appointments in Mere Green, Four Oaks, Sutton Coldfield, Lichfield, Tamworth, Burton, Birmingham, Walsall, West Bromwich and many other surrounding areas of Staffordshire and the West Midlands. Alternatively we can make arrangemtns for you to visit our offices to discuss your requirements in more detail.
The overall cost for comparison is 4.5% APR. The actual rate available will depend upon your circumstances. Please ask for a personalised illustration.
Caboodle Financial Services Ltd
240B Lichfield Road
Sutton Coldfield B74 2UD
Telephone: 0121 308 9114