Moving home can be a very stressful time. Whether you are moving to a larger property, downsizing or simply moving to a new area it is important to get the right mortgage advice. Our mortgage advisers will search our comprehensive panel to find you the best mortgage deal for your circumstances. We will also process your mortgage from start to finish liaising with solicitors, estate agents and other third parties allowing you more time to concentrate on the more practical matters associated with moving home.
Below is a list of things to remember when buying a new home:
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 are important to you and then prioritise them accordingly. 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 or 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 own stamp on.
Whilst it would seem pretty obvious 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 are likely to be before proceeding with any purchase.
• Distance to work
• Accessibility of local transport
• Quality of schooling
• Location of local shops and restaurants
• Other important amenities (e.g. local parks or leisure options)
• Type of property (flat, house, detached, semi, terraced, bungalow)
• Are you looking for something old or new?
• How many bedrooms do you need?
• Do you want a garden?
• Does it have a garage?
• Can you afford the purchase price?
• Other Costs to consider such as Estate Agent fees, Valuation fees, Solicitors costs, Removal fees, Stamp Duty etc
• How much are the Utility Bills?
• Council Tax band
• Any maintenance or refurbishment costs
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.
Once you have found a property your mortgage adviser will recommend a suitable mortgage. The lender is likely to want some documentation in support of your mortgage application which we will collect from you during the process. This can include some or all of the following:
• Evidence of your income – such as recent payslips or accounts
• Evidence of your commitments – such as your latest mortgage statement or bank statements
• Information about your credit profile
• Proof of identity – such as a passport or driving licence
Remember if you are moving home you will need to instruct a solicitor or conveyancer to act on your behalf not only for the purchase of the new property but also the sale of your existing one. It is always a good idea to use the same solicitor for both transactions especially if the sale and purchase is to take place simultaneously. Our advisers can discuss this with you and if required recommend a firm to use.
The job of a solicitor or conveyancer comprises of the following tasks:
• Obtaining the deeds which proves the property legally belongs to the person you are buying from
• Establishing where the legal boundaries to the property are, and passing this information to you
• Preparing a list of fixtures, fittings and contents which makes it clear whether or not things like carpets or kitchen appliances are included in the purchase price. This enquiry form will also ask the vendor whether they are aware of any material, structural or other defects to the property that you should know about
• Advising you on a draft contract for sale, prepared by the seller`s solicitor, setting out the terms of your purchase
• Carrying out a search of local planning information to uncover details of any upcoming developments, such as a new road or new building site, which could affect the future value of the property
• Agreeing a date for completing which suits both you and the property seller
Conveyancing may sometimes take longer than you imagined, but don`t be tempted to rush matters. Your new home will be one of the most expensive purchases you will ever make, so it is important that nothing is overlooked.
Most 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 in a way that best suits your needs I.e. Over the internet, by telephone or post, or in person, whichever is easiest for you.
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 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 a figure above the asking price!
If you know that many people will be 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 secured by law only when contracts have been signed and exchanged.
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.
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 strongly recommend 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 surveyor`s report beyond the basic valuation:
1. A House Buyers 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 your offer is accepted on.
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 your 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 one of advisers 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).
• Your solicitor has completed all the local searches
• The valuation report is complete and accepted by all concerned
• You have a formal mortgage offer in writing, which you have read and understood
• You have the agreed deposit available
• You have agreed a completion date for the sale, and this date is noted in the contract
• There are no outstanding issues remaining to be settled between you and the seller
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 sorted out 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.
All that remains after exchanging contracts is for the solicitor 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 agents 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 0800 151 2407 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 arrangements for you to visit our offices to discuss your requirements in more detail.
The overall cost for comparison is 3.7% APRC. The actual rate available will depend upon your circumstances. Please ask for a personalised illustration.
Representative example: A capital and interest mortgage of £131,500 payable over 25 years initially on a fixed rate of 2.99% for 5 years and then a variable tracker rate at 3.49% above the Bank Base Rate (currently 0.25%) for the remaining term would require 60 monthly payments of £625.10 and 240 monthly payments of £668.70. The total amount payable would be £198,109 made up of the loan amount (£131,500), interest (£64,900), product fee (£999), broker fee (£595), final repayment charge (£80) & completion fee (£35). The overall cost for comparison is 3.7% APRC representative.
THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT. CONSOLIDATING DEBTS MAY INCREASE THE TERM AND TOTAL AMOUNT PAYABLE.
Caboodle Financial Services Ltd
Mere Green House
46-48 Mere Green Road
West Midlands B75 5BT
Telephone: 0121 308 9114