Eager to make that step onto the property ladder? Perhaps you are already a homeowner but now want to expand into a bigger property or purchase one in another area.
Investing in a property is probably the single-most expensive purchase you are ever going to make and in most cases will be your biggest asset.
For that reason, it’s vital to get it right. Our step-by-step guide aims to guide you in your quest for property ownership.
Step 1 – Get your Budget and Finances in place
Probably the most important question you need to ask yourself is ‘what exactly can I afford?’ This all-encompassing question should take into account everything from the initial deposit and mortgage considerations to one-off payments and ongoing ‘hidden’ costs associated with buying and owning your own home.
Deposit. How much deposit can you get together for the mortgage? Your savings are likely to be your first port of call, but what about the potential ‘Bank of Mum and Dad’ or ‘National Bank of Grandparents’?
We don’t mean to force them to give you money, but they may well have put money aside for this momentous step, so you might want to subtly make them aware that you are thinking about buying a house.
Mortgage. You can’t get a mortgage before you buy, but you can have a meeting a get a mortgage in principle, which makes your position and financial situation much clearer. The amount you can borrow relies on a number of elements, such as current income, size of your deposit, credit score, how long you’ve been in your current job and how much debt you have. There are also many different types of mortgages for you to get your head around.
One-Offs and Hidden Costs. You will want to budget for the costs of making amendments to the home once you have purchased it and making it ‘your own’. Redecorating, a new kitchen, new carpets and the like add up and can put a further 10-15% on the property price. Also account for costs such as Stamp Duty and surveys, which should be included in your quote when you consult a solicitor, as well as insurance.
Step 2 – Determine your Needs
Once you have your head around the finances, have to think about what exactly you want, or, more realistically, need. Making a list is a great way to start your property search. Things to consider include size, layout, structure and appearance, access and parking. If you’re thinking about starting a family soon you might want to make sure it has an extra bedroom. Terrace, semi-detached, apartment? The choice is yours – as long as your budget is happy with it.
Step 3 – Location!
Location is perhaps one of the biggest ‘needs’ you need to determine. If you are staying local this is much easier to handle but if you are moving to a new city or area of the country, it is much more time-consuming.
The best thing to do is do as much research as possible and visit the location on more than one occasion. What are the transport links like? Is it close/commutable to work? Within distance of that nice school?
Step 4 – Evaluate the Property
With the current market as busy and competitive as it is, you will need to make a fairly quick and decisive decision, but it’s absolutely necessary to evaluate the property – does it fit with your needs criteria? Is it within your budget and financial capabilities? Arrange another visit to make sure there are no hidden, and potentially nasty, surprises.
Step 5 – Make an offer – get it accepted!
If you’re happy with everything – what are you waiting for?! Decide how much you want to pay and put in an offer with the estate agent. Only once the offer is accepted will the property be taken off the market.
Step 6 – Contact the experts – Mortgage Lender & Solicitor
If you consulted a mortgage company about your finances before you started looking, get back in touch with them to agree on the offer and complete the process. If you didn’t get in touch regarding a mortgage at the start of your house hunt, you will now have to get motoring to find one to avoid any delays.
A solicitor will carry out the legal necessities in registering ownership of the property to you. A conveyancing solicitor will also complete the relevant searches with the council and environment agency to make sure everything is good to go. Make sure this includes the stamp duty cost (which is a government tax) too; if not you’ll be in for a startling discovery a bit further down the line. Don’t be lured in by cheap online conveyancing deals; they often have hidden costs and can become expensive if you do not agree to a fixed fee beforehand.
Try to use a solicitor’s practice rather than a conveyancing company as it will give you peace of mind that a property professional will be handling your case.
Step 7 – Exchange contracts, final arrangements, completion
Once you ‘exchange contracts’ you are legally committing to buying the property. The exchange will only be done after the mortgage has been approved, arrangements for the deposit have been made and the searches have come back. When the solicitors of both parties are satisfied the exchange of contracts can commence!
Final arrangements include negotiating any items between you and the seller, e.g. sofas, white goods etc., and then the supply of utilities – electric, gas, water and telephone. Completion day will occur after the exchange; this is when you pay your solicitor fees and any stamp duty to take full ownership of your new home!
Step 8 – Enjoy your new home
You’ve done it; now is the time to unpack, relax and enjoy your new home!