Where to start?
When you decide you’re ready to purchase a new home it suddenly becomes overwhelming very quickly. This is due to all the decisions that need to be made, and the amount of options available to you.
Before you begin your search of your new home, it’s important to decide on the area you wish to live in. Will that area be close to your workplace? Do you need to think about nearby schools? Do you want to live in a quiet village or a busy city? These questions will enable you to narrow down your search and be able to research your preferred area, before you begin your purchasing journey.
Once you’ve selected your ideal area to live in, you are able to start thinking about the type of property you want to buy. Depending on whether it’s your first home or your forever home, your requirements will differ slightly. Aesthetics play a key role in picking your perfect home too. Are you looking for a home that’s perfect as soon as you get the keys? Or, are you looking to put your own stamp on it and renovate it to make it your own?
These are key considerations to make before you begin the journey of purchasing your new home.
Deciding on your budget
As with many things in life, the cost is often a key part in our decision making. Deciding on how much you want to spend is a vital part of purchasing your new home. It may be that your funds are coming from the equity in your current property, savings or a gifted lump sum.
Whilst the deposit for your new home will be the majority of the cost to pay, do not forget there are additional costs attached to purchasing a home. These include mortgage advisor and solicitor fees, removal company costs and stamp duty.
If you are selling a property, you also need to consider the estate agents fees, early repayment charges and solicitor costs.
As of 8th July 2020, there is a reduction in Stamp Duty rates. Rates are only applied when purchasing a property of a higher value than £500,000. The reduction of Stamp Duty rates will apply until 31st March 2021. Read more about this on the GOV.UK website.
The initial costs of purchasing a home are normally just the start because there are also running costs and maintenance costs to pay for too. We can help determine if you can afford the property you’ve set your heart on.
Making an offer
After you’ve narrowed down your search, you’ll hopefully come across a home you love. Putting an offer in on a home can be exciting yet very testing at the same time. Be sure you’re in a strong position as a buyer. If you’re buying and selling, have you received an offer on your current home? Is it sold subject to contract? Do you have the funds readily available if the sale were to go through quickly? If you require a mortgage, have you obtained an agreement in principle? The answers to these questions can determine your position as a buyer.
As you go around the property, it’s important to take note of things that may affect the offer you make. Take note of fixtures and fittings plus any minor damages or repairs which need to be made to the property, as sometimes these are things which can work in your favour when making your offer.
When you find a home you love, it can be difficult to imagine that once you put an offer in it might not be yours. However, it is possible to be gazumped. Gazumping is something which can happen right up until you’ve exchanged contracts. The majority of the time, it’s because someone has put in a higher offer than yours or if the seller is conscious of time (e.g. your home hasn’t sold yet, the process is taking too long for them and they fear the sale falling through).
It can be so easy to get wrapped up in the way a home looks while you are viewing it. Remember to make sure you take some time out to ask the estate agent or seller some key questions before you make any decisions. Below are some questions to consider asking while viewing your chosen property.
Questions to ask before making an offer:
- How old is the property?
- What’s the area like?
- Are there any issues with the building?
- Have any offers been made?
Which mortgage is right for me?
Just like houses, there are a lot of options when it comes to finding out what mortgages are available. We understand that every circumstance is different, and therefore not all mortgages will be suitable for you.
Although you can’t get a mortgage before you buy your home, you can get a decision in principle beforehand. If you’ve bought a house before, you’ll know many estate agents require this before taking you to see properties. It also shows you are in a position to buy.
The two main types of mortgages are fixed and variable rates. However, with many different mortgage types out there we understand that it can be a struggle to see which one is the best fit for you. If you are struggling, get in touch with one of our experts who are on hand to assist you. With access to the whole mortgage market, we have an unbiased view when helping you find the right mortgage.
Here at ChoiceMortgages, we can help find your perfect mortgage. No matter your situation, our advisers can help you. So, do not be put off if you feel your situation is different from other success stories. We promise to provide a personal and efficient service, tailoring our advice to your individual needs.
Appointing a solicitor
After your offer has been accepted, you will need to get a solicitor or conveyancer to handle the legal transfer of the ownership of the property from the seller to yourself.
Your estate agent or mortgage lender may recommend a solicitor for you; however, you have no obligation to go with who is recommended. Just like when finding your home, do you research on solicitors too. Your solicitor will take a leading role in your home purchase, as they will do the majority of the communication between yourself and the seller.
As well as dealing with the legalities and paperwork, your solicitor will normally pay the stamp duty for you as well as ensuring the change of ownership is registered with the land registry. Usually, your solicitor will give you an account to transfer their fee into. If you are selling a property as well as buying, your solicitors fee can come out of the profit of the sale before transferring over the funds for the purchasing property.
Finally, the day all house buyers wait for - the exchanging of contracts. Once this has been completed, both the seller and buyer are legally committed to one another. If you or the seller decide to pull out after the exchange, you will both lose money and a lot of time. Also, as a buyer you even run the risk of losing your deposit as a forfeit if there is no genuine reason for doing so.
Before you exchange, a completion date is likely to have been agreed on (sometimes exchange and completion can fall on the same day). It is crucial you ensure that you have buildings insurance ready for the date of exchange, as from that date you are responsible for that property. All mortgage lenders will have a condition that building insurance is a requirement of the mortgage. It is unusual for them to insist on their product, normally you can arrange your insurance with any provider.
If you’re a first-time buyer, we offer a more in-depth look into buying your first home here.
What does that word mean again?...
Throughout this guide, some words may have been used which you are unsure of. This is why we have put together a glossary to explain what all the home-buying jargon really means.
Decision in Principle: A written estimate from a mortgage lender, alongside a certificate, providing an indication of how much you are able to borrow.
Fixed Rate: An unchanging rate on your mortgage. This will apply for a set period of time, usually between two To own a freehold property is to own the building and land it stands on outright. Meaning, your name is on the land registry as 'freeholder'.
Gazumped: When someone makes a higher offer on a home than the one you have put in and they succeed in acquiring the property.
Leasehold: You are leasing the land from the freeholder (usually leases are long periods of time), however maintenance fees and annual service charges are likely to be applied throughout the term.
Stamp Duty: A Land Tax which applies to anyone buying a property or land costing a set amount.
Variable Rate: An interest rate which can rise or fall in line with the UK economy.