Our Guide to buying a house!
A Guide to buying a house, particularly for the first time, can be daunting. Yet, the decisions you make along the way could save – or cost you – many thousands of pounds.
At Matthew James Property Services, we have put together a step-by-step process of everything you need to consider before buying a home, from mortgage deals to local estate agents to exchanging contracts. We hope you find our Guide to buying informative.
Decide if buying a home is right for you?
First, you need to decide if buying a home is right for you?
Buying a property can be one of the best investments you’ll ever make. Yet, it’s not suited to everyone, and there are many things to consider.
You will need to decide if the process of buying a home is worth it for you?
Ask yourself whether I can afford to buy a property.
You may have to rent instead of buying a home because you’re priced out of the market. Applying for a mortgage may not be an option for you. Even if you can afford the mortgage repayments and deposit now, it might be more thoughtful in the long run not to buy.
Is the market right?
Many aspiring homeowners cannot make their dream come true due to either being too expensive or for other rational reasons such as debt problems.
Many people have a common misconception that they need an incredibly high income to buy a property, but this is not the case!
It’s up to you whether you stay renting or lease a house or flat. Don’t rush to buy if the timing of the market isn’t right. You can permanently save until something better comes along.
Advantages of buying a home
When you buy a house, you can finally say “it’s your home”. In addition, it can serve as some comfort for those who struggle in their lives and might lack control over certain aspects of it.
You can spoil your home, make it as beautiful and comfortable as you want. The fixtures and fittings are yours, and you can decorate how you want. Choose the colours and styles that best suit your personality. Use your creative flair; after all, you own it.
Renovate and increase your property’s value. The best way is to hire a professional, and you will feel content that you’re in the right hands.
Don’t do it yourself; get an expert. You have the potential to add tens of thousands to your property. For example, you could add an extension or put in a new kitchen.
You have to live somewhere, and you won’t be forced to move.
Owning your property brings with it many psychological benefits. For example, recent surveys show that homeowners feel more optimistic.
Buying property is an investment. Property prices will always fluctuate, but they should only increase in price if timed right.
You will save so much money compared to renting!
Keep in mind that rental properties and landlords are responsible for any necessary repairs and maintenance.
Renting is dead money compared with owning your property.
For many people, buying a home may seem like too much of a risk. This is because they are unsure if they can afford the mortgage. However, with interest rates being so low at present, homeownership is cheaper than renting and will give you security.
Some landlords have a reputation for often disregarding their tenants’ needs. Unfortunately, this can leave you at the mercy of cheapskate landlords. With a fixed-rate mortgage, on the other hand, your budget is dictated by yourself. As a result, you won’t have to deal with any unfair treatment.
It can make you so much money compared with renting.
Increasing property prices is one of the benefits of a rising market. You can make a lot of money by increasing the value of your home. For sure, this is a lucrative goal that can offer a bump up in the property’s price by 30% or more.
As an investor, you are investing it in something that will return a monthly payment.
Homeownership is one of the most common ways to accumulate wealth. Your property can form part of your retirement plan.
Negatives to buying a property?
A monthly mortgage payment is an unwelcome responsibility that can be hard to escape.
Besides the home’s sale price, other costs are associated with homeownership, including ongoing maintenance costs and insurances.
If you don’t pay your mortgage, the bank could repossess your property.
The property market could decline, and you could lose money if you decide to sell.
Every home owner’s dream is to sell their property higher than what they paid for it. Unfortunately, that doesn’t always happen in the real world. Negative equity could force you to pay higher mortgage payments.
You won’t have to deal with the buying process.
It is harder to up and move.
Many people don’t want the commitment. You are tied in when you buy a property. Owning your own home comes with a more significant financial responsibility.
You shouldn’t consider buying if you are not sure where you want to be in a year. For example, your employment situation is uncertain.
As you can see, there are pros and cons on both sides. You will need to do your homework and think long and hard about whether buying a property is right for you. But if the answer is yes, then congratulations, you have decided that Buying a Property is right for you! Now you need to determine your affordability and work out how much you can afford.
Find an Estate Agent first.
Buying a home is complicated, and before you find a property, you must find an estate agent. There are a lot of moving pieces, and they can be confusing. Yet, you can safeguard your interests by enlisting professional help.
All local estate agencies are not equal. So, you will want to spend some time to find the right one for you.
Buying your first property is a challenging process. Professional Estate agents can ease this process and guide through all the pitfalls.
Check online reviews; Good Estate Agencies will usually have a ton of reviews online. Also, talk to your friends and family, as they might have had a good or bad experience with an estate agent in the past.
You must chat with some agents until you find someone you trust. Listen to your gut.
A professional estate agent will guide you throughout the process, from the start to exchanging contracts to applying for a mortgage.
How much can I borrow?
How much a mortgage broker will be willing to lend will be dependant on a few factors.
Your credit rating, your deposit size. Lenders’ will offer fixed or variable mortgages. How much money you make in a year, whether you have any debt, and your monthly outgoings.
These will all be factors determining mortgage eligibility and how much your repayments on your mortgage will be.
Usually, lenders will want three months’ worth of wage slips and monthly bank account statements.
One bank may lend you more than another. At the moment, in the UK, some U.K. mortgage lenders are offering 90% mortgages.
There are many different mortgage deals on the market at one time. However, it’s worth noting that most lenders offer you a choice between variable and fixed-rate loans.
Variable-rate mortgages are cheaper. These can then rise in line with the cost of borrowing from time to time. So your monthly mortgage payments may stay low for a while. But if interest rates go up, they could end up being more expensive.
Putting down a deposit for a mortgage
The deposit you need to pay will form part of the mortgage application and be based on your property costs.
A first-time buyer can get help from the government with their deposit. In addition, there are schemes like Help to Buy and Shared Ownership.
No matter what type of mortgage you secure, the loan will have a minimum amount you will need to put down as a deposit. At the moment, you will need at least 10% of the total property cost for your mortgage deposit. The deposit size will determine how much house you can afford.
In principle, getting a decision is a great way to give you an edge over other buyers when you put in an offer.
People get money for the deposit of their mortgage from a range of places.
Selling a property
“The Bank of Mum and Dad” Often, parents are in a more stable financial situation and can help fund deposits.
There are also government schemes for first-time buyers.
Consider your credit rating.
Your credit score affects not only your mortgage application but also your repayments. Thus, you’ll want to build your credit score before applying for a mortgage.
Apply for a mortgage
It is an essential authorized and regulated mortgage lender. In England and Wales, mortgage lenders are regulated by the Financial Ombudsman.
There are also other things to consider, such as a legal survey, structural survey. You will also need to instruct a solicitor. It’s a whole legal process. It’s always a good idea to have home insurance in place. Most of all, always seek professional advice before signing any legally binding documents.
Getting a decision in principle/mortgage in principle from a mortgage lender will put you in a good solid buying position.
It may give you an edge over other buyers. When you apply for a mortgage, some lenders will decide in principle.
This means that they would be happy to loan you the money with the information you have provided.
Where can you get a mortgage from?
You can apply and get a mortgage offer from banks and building societies.
You can also apply to a mortgage broker. Brokers usually have a panel of lenders to choose from. They will often know which lender will suit your requirements most.
If you are self-employed, you may have to provide extra paperwork.
Covering your monthly mortgage payments
Once you get a mortgage, you will need to ensure you keep up with your mortgage repayments. Your mortgage lender could take action against you if you don’t.
When you’re considering putting down a deposit for a mortgage, it’s essential to understand what your interest rate will be.
You can choose from a fixed rate or variable rate mortgage. In addition, you’ll have the option of selecting differing term lengths. Choosing between different terms will affect your monthly repayments.
There are many online mortgage calculators you can use to get a rough idea of what your payments will be like.
Remember, you can use your rent money to make mortgage repayments.
There are lots of things to consider other than how much your property is worth. For example, you don’t just have to pay for your house. Electricity and water bills also take up an affordable chunk of your budget.
From July 1st 2021, until September 30th 2021, no stamp duty will be paid on the first £250,000 of the property’s value. This is returning to £125,000 on October 1st 2021.
There is First-time buyer relief, and this applies to the first £300,000.
There is no stamp duty in Scotland until March 31st on a property up to £250,000.
In Wales, you will pay no stamp duty up to £180,000 if this is the only property you own.
To calculate exactly how much stamp duty you will need to pay. You can use an online stamp duty calculator to help.
When selling a property simultaneously, be sure to subtract any agency fees from the total sale price.
Consider all the different buying costs like valuations, surveys solicitor/conveyancing fees, Land Registry fees, and removal costs. Don’t forget to factor in any furniture or white goods you may need.
Things to consider when looking to buy a house or flat.
You may have been looking for a new property, but there are some things to consider before you start. You might be thinking that now is a good time since the market is doing so well, but we’re here to tell you otherwise. There are still plenty of buyers out there who will snatch up any house they can get and end up regretting it in the long run.
Should I buy a new build?
It’s a good idea to ask the estate agent for advice about this. They’ll know what you should pay for the purchase price. They may even be selling new builds as well.
There are some disadvantages to buying a brand-new built property. First, these types of properties are priced at the high end of the market.
New build properties are often priced at the higher end of the market.
Considering the Location
There are a few things to consider when it comes to location. The first is the commute and how much time it will take to reach friends and family.
Secondly, you want to make sure your home isn’t too far from where you work. If you have kids, they’ll need good schools nearby!
You will also want to work out how much fuel costs will add to your monthly outgoings. Again, a local authority estate agent will be able to help. They should have all the local knowledge to help answer your questions.
Things to consider
Amenities – what local shops are close by? Is there a post office?
Transportation links – Is there a local train station?
Schools – what Schools are in the area, and do they have good Ofsted ratings?
Hospitals – How far away are the Hospitals and doctors’ surgery?
Distance – How long will it take you to get to family and friends and workplaces?
Crime – Is there a high level of crime and corruption in the area?
Start your property search.
Be careful not to judge a property without seeing it in its entirety. Don’t take properties off your shortlist because of superficial issues. These can be fixed with paint or landscaping.
Some websites have offered search filters to make it easier for you to research homes and property in your area. For example, using filters on Estate Agents websites or property portals will allow you to narrow down your search.
Book a few viewings and see the properties. What my wife and I started looking for wasn’t anything we ended up buying. But, seeing properties, we realize you realize what it is you are after!
Register your details with all the agents you like. This way, you will hear about all new properties that will come to the market first. Often a property can sell before it is even listed on property portals.
Consider all homes on the property market. Look at new build property, detached as well as semi-detached. Work out the pros and cons; this will help when making a decision.
Consider comprising you will not always find exactly what you are looking for. However, if a property is ticking 4 out of 5 boxes, it may be worth considering it as a contender.
Ask the seller as many questions as you can, and always give your agent feedback on the properties you view. This will enable them with more information to better match you with a property.
Make an offer
Professional agents know how to examine the homes that have already been sold in an area. These properties can serve as a good indicator. In addition, they help estate agents determine correct pricing.
Not all properties will sell at the agreed asking price. Pricing is a tricky thing for any seller. While the guidelines are provided, there are no set standards. Sellers can decide on their own if they think that price is worth giving to someone else or not.
Be realistic when making an offer. Going in at a silly low price will only anger the vendor, and they will be less likely to do be business with you. But, in the same breath, there is no point in offering well over the asking price.
Consider other interested parties; if the property has had a lot of interest, your offer will need to reflect this. On the other hand, vendors have been on the market for a while.
Ask your agent for advice, and they can not tell you what the vendor will accept but should guide you somehow.
If your offer is accepted, you know you have done this correctly.
Order a survey
If your offer has been accepted, you will need to order a survey. A buyer has a certain number of days to conduct inspections and survey the property. A professional surveyor can help you avoid expensive mistakes down the line. In addition, a surveyor will provide you with peace of mind when buying your new home.
What is a property survey?
We always advise on getting a property survey before you commit to buying a property. This is because it can help you identify any potential problems with the property. The survey will highlight any significant issues. For example, the survey would highlight structural defects before you buy. They may even offer advice on how best to deal with them should these come up as an issue later down the line. You will be able to adjust your asking price to reflect the costs involved. You can even ask the seller if they will fix the issue first.
Different types of surveys?
There are three different levels of property surveys to consider. which.co.uk has a related guide with some great information to look at if you want to know more.
Who carries out a survey?
Surveys are carried out by professional surveyors who are trained to assess practically. Most qualified surveyors are members of the Royal Institute of Chartered Surveyors.
A professional surveyor will carry professional indemnity insurance.
Local surveyors are essential for anyone interested in having a professional survey. They have the local market knowledge and will give you an honest assessment.
They may also offer advice on how best to deal with these potential problems. For example, tell you the type of guarantee cover that would suit your budget and requirements. Guide you on the agreement could include details about repairing defects. Finally, make sure issues were completed in a manner which both parties are happy with.
While there is no set level of survey costs, the average cost of a single property ranges between £500 and £2,000.
Who pays for the survey?
If you are unsure, you can always ask your estate agent. Usually, the buyer pays for a property survey, but it is interesting to do so.
You are almost there, now comes the most stressful and exciting part for buyers.
Find a conveyancer or property solicitor.
You’ll need to choose a solicitor or conveyancer as soon as you agree on an offer. It can be challenging to find a solicitor or conveyancer. So what are some things that we should keep in mind if hiring them?
Ask friends for recommendations.
Ask around; people will have experienced both conveyancing and buying a home. Consider using the Law Society directory to find specific solicitors in your area. You can also chat with your local agent, and they will know who is the best.
What is the difference between a solicitor and a conveyance?
Licensed conveyancers are specialists in property law.
A solicitor is a qualified lawyer with extensive training in many aspects of the law. They offer complete legal services such as divorce proceedings or taking someone to court.
Using a solicitor to handle all the transactions for your property may cost more.
Advice on working with a conveyancing solicitor
There is a lot of paperwork involved in the conveyancing process, and all items must be filled out. The faster a conveyancing process moves, the higher the chance that your sale will be completed. Anyone can help make this happen by being meticulous about sending off forms at the right time.
Some solicitors and conveyancers may not be easy to get ahold of. Your conveyancers may find it challenging to stay connected with your clients, especially while working on other tasks. Such as being in court or outside the office for work. Property law specialists are often office-based, which helps better client communication.
It’s essential to do your homework and research costs before signing any contract. Some estate agents will have in-house sales progressors. A sales progressor will help push conveyancers to make sure your property sale goes as smoothly as possible.
Completion date and the exchange of contracts
You exchange contracts when the buyer and seller’s legal representatives swap signed contracts. The buyer pays a deposit before they exchange contracts. You’ll need to have many things prepared in advance. A written mortgage offer is agreed upon with a completion date and building insurance. After you’ve signed a land contract, you can breathe easy: the agreement to buy your property is now legal by law. There’s a meagre chance anything could go wrong from this moment on. All you have to do is pay the seller and arrange with the Land Registry to transfer ownership of the property into your name.
Many new house purchases happen within a couple of weeks after exchange. This can be flexible, and you can agree on a convenient date with the seller. When the work is complete, your money will be transferred. Shortly after that, you’ll be able to pick the keys up for your new home from the estate agent. The next step is to start furnishing and decorating the property to your taste. You’ll feel like you’ve accomplished something once it’s all done.
You can breathe a temporary sigh of relief!
All you need to know when moving house
With the exchange of your home complete and move-in date set, you must be eager to move into your new property. However, there’s still work to do, so we have put together a guide to help you out.
Before you move
If you need to sublet your property or move out, make sure you’re aware of the proper processes outlined in your rental agreement. In addition, before signing a contract with your estate agents, make sure your notice period is manageable.
Start decluttering your life at this point. It is easier to get rid of home possessions you do not need before arriving at your new property.
Make a list of all businesses that you will need to contact. For example, you will have to change your addresses on your Driving License, internet, phone, gas, electricity, etc.
H.M.R.V and Customs holds details of your residential address, so you will need to contact them and change this if required.
You will want to have plenty of packing boxes on hand. Start by asking friends and family members for their empty containers. You can even look on websites such as Gumtree or Freecycle.
Contact a moving company and find out availability prices. If you are not using a moving company, it would be good to look at van rental.
Arrange a post redirection with the Royal Mail.
Make a list of your home’s inventory and take photos of everything that needs to be moved to make sure nothing is broken during the move.
Take a reorganized reorganize the outside areas, such as the garden and shed.
A few weeks before you move.
Pack anything that you will not need in the next two weeks. There will be lots to do, and you need to make sure you will have enough time.
Register with your new doctors.
You may want to book some holiday at work to ensure you have enough time for the moving day.
Think about changing the locks if you’re particularly concerned about security. Considering a locksmith may be the best option for securing your new property.
Make sure you label all your moving boxes; you can even list items as they go in. We like to star boxes with essential items, i.e., the kettle; at least you will be able to have a cup of tea without rooting through all your Kitchen boxes.
If you’re renting your property, set up a time for a final walk-through inspection with your landlord. This way, they can be sure everything is in order and that you are meeting the requirements. If you have any questions during the process, make sure to ask them.
You will need to remember your TV licenT.V. as it won’t automatically change.
Please label any spare keys and remove all old house keys from your keyring.
Let your utility companies know of your moving date and new address. This will need a few days’ notices. Planning a move can be difficult. It’s essential to make sure you’ve updated your utility companies with the new address. Give them your move-in date before anything happens, or they could disrupt service during the transition.
Keep your essential documents and valuables in a separate luggage bag. You don’t want to lose anything during the move.
Think about dismantling furniture – make sure you keep all the fixings and screws so you can reassemble easily.
Throw away any food past its end date, and pack all your other staples in sealed containers. We always have a takeaway on moving days as it’s a lot less hassle. You can look online and see who delivers in your new area.
Before you disconnect your electronic devices, take pictures of the wires for easy set-up.
Moving Day Things To Do
The day is finally here, and it’s time to move in! Here are some tips that should keep you feeling safe and secure while you have your new home.
The most important things to do both at your old home and your new one.
Packing a moving van can seem like an overwhelming task. Thankfully, your boxes are all labelled, so you’ll be able to fill them in the truck in sections. But, again, think logically; this will make emptying at the other end easier.
You will want to clean your property before you go. This will also give you a chance to check every room and outbuilding to make sure you haven’t left anything behind.
Secure all windows and doors and note the meter readings.
Consider all kinds of insurance before moving out, including setting up your home contents cover. In addition, you can take pictures of all rooms to prove you cleanly left the property.
Finally, it’s time to open a bottle of wine, order that takeaway and take a breath, relax and enjoy your new home.
In conclusion, buying a house can be an incredibly stressful adventure. This is because there are so many factors to consider, such as the location of your home, the size and style you’re looking for, whether or not it will work with your lifestyle…
Buying a house is one of the most intense decisions people make in their lives. So when I first decided what kind of place I wanted my future family to live in, there were just too many things that needed consideration!
With someone like me who likes being hands-on when they buy something new – this seemed overwhelming at times because there’s no way around all those points if you want to call yourself knowledgeable about real estate (or even remotely serious). But now? It feels great knowing we got our perfect little spot.
We hope this blog post has helped you feel a little more confident about the process of finding and buying your new home. We’re always here to offer advice, so we can do anything else for you if there’s anything else. Matthew James is your local estate agent with years worth of experience in all types of housing transactions – from first-time buyer homes to property investment deals. Contact us today!
See our previous blog post How to choose the best Estate Agent for You! here