January 2016
Buying
By Admin
Buying advice from Petermans; for first-time buyers looking to join the market.
What is your Budget?
- Discuss your ideas with an independent mortgage adviser to ensure that you receive an unbiased selection of more available mortgages.
- The result will usually be a loan offer of up to 3 or 4 times your income, i.e. £30,000 will gain you a loan of at least £90,000. A couple together will tend to be offered 2.75 to 3 times their joint income.
- You need to have a deposit. Depending on the size of this, lenders will offer a lower interest rate. Ideally, a deposit should be at about 25% of the overall value of the property.
- Ensure that you get at least 3 quotations on purchasing a property, as these can greatly vary. Most estate agents recommend solicitors they know and trust so it usually makes sense to compare a few options to be certain of the best value for money.
- Stamp duty is another fee to consider as the charges are related to the overall price of the property.
- Before you can proceed with buying a home, the bank/building society will have to carry out a survey of the property you wish to buy to ensure it is worth the money they plan to lend you. There is a choice between two surveys.
The Lenders (valuation) Survey:
This comprises of a mortgage valuation and a property inspection to establish the amount and terms of a loan. This information will then indicate how much the property is worth. However, this does not cover a structural inspection which could lead to problems in the future. The price for this survey tends to vary from between £400 – £600.
The Homebuyers Survey:
There is one main difference between The Homebuyers Survey and The Lenders Survey. While both cover the same idea of a mortgage valuation and property inspection, The Homebuyers Survey also provides checks for any defects such as damp, dry rot, etc. as well as advise you on whether or not it is financially viable to proceed with lending you the money you will need. With this in mind, The Homebuyers Survey is more expensive with a charge of £600 – £800.
Looking in the right places to find the right house for you
Check websites such as Rightmove and Onthemarket as they are constantly updating their database for the most recent properties and prices. Also be sure to check out estate agents’ home pages that will allow you a certain amount of information, and contact details for referrals in the future.
It’s also great to register with estate agents and give them specific details. This will allow for a quicker turnover with feedback from them to you on what properties are out there. Petermans are extremely helpful when it comes to buying in West Dulwich, Herne Hill, and Edgware.
Making an offer?
Before deciding on whether to make an offer on a property, make sure that you have viewed it more than once to be certain that it meets every requirement. You may see things you would like to change or enquire about on the second time viewing that you may not have noticed before.
Factors to consider before deciding on the value of your offer:
- Is the property leasehold, freehold or share of freehold?
- How long has the property been on the market for?
- What work would need to take place?
- What are the service charges?
- Ask if the property can be taken off the market to prevent “gazumping” (passing on a higher offer to the seller while processing the primary offer)
If all is well, make an offer!
Once your offer has been accepted…
Buying your property?
- Appoint a solicitor as you will need one to progress with the conveyancing.
- Inform your financial advisor so that the mortgage application can be processed.
- Pay for the survey you have chosen.
- Wait for the solicitor’s instructions.
Petermans can also assist in recommending a solicitor and financial advisor. In particular, we hold Glazer Delmar Solicitors and Devonshire Wealth Management in high regard.
Once the paperwork has been completed to the solicitor’s satisfaction, you will be ready to:
1) Exchange contracts:
This means that you are legally obliged to the purchase of the property. A deposit of at least 10% has to have been lodged with your solicitor as cleared funds so that the exchange can take place.
This is the first of two parts that will result in the purchase of your property. At this point, if you are buying a freehold property OR a leasehold property where you are responsible for your own building insurance, you must have obtained the building insurance from the date of the exchange.
2) Completion:
Once this has taken place, the property will officially belong to you. An average time between exchange and completion is usually a week, although this can be negotiated with your solicitor and the owner of the property you are buying. You should expect a phone call from your solicitor informing you when you can collect the keys from your agent.
You are now ready to move, congratulations!