Saturday, 14 October 2017

HOW TO: YOUR FIRST PROPERTY PURCHASE

Now. I consider myself an intelligent woman, I've done well for myself career wise and live an independent #girlboss lifestyle. However, I don't think I ever *quite* anticipated just how confusing buying your own property is. I am writing this blog post in the absence of good impartial advice, forgive me if I just didn't stumble across your blog post on the topic, the only things that came up on my google search gave me broad detail but with some form of sales pitch attached! There are no such sales pitches here, I just want to share my findings in the hope that it helps and you don't find yourself googling 'an idiot's guide to buying a house' desperately searching for information.

I also have to say that I couldn't have done this without the generosity of my parents helping me with my deposit. As a single person trying to get on the property ladder, it is difficult!

I will split this post into different sections so you can skip over if anything is obvious!

Getting Your Finances in Order

I knew I needed to do this and yet I think there was definitely way more I could have done. One of the best tips I could give you is to explore your credit rating as this is ultimately what will determine how attractive you will be as a potential customer to a lender. The main credit agencies are Experian and Equifax. There are options to really drill down into what is making up your score and I would urge you to look into these if you number is in the average or below territory.

One thing I will say though is do not worry if you don't have the best credit rating, there are lenders out there who will still consider you but it will be a more indepth process.

Make sure you are paying your bills on time, ensure that the agencies have an accurate picture of you so check you are on the electoral roll at your current address and that they have as much information as possible. You also have the opportunity to correct certain information too.

Also bear in mind that your mortgage provider may need to go over 3 months worth of bank statements so perhaps think about keeping the ASOS orders and just-eat deliveries to a minimum...

Once you are in a position to start thinking about buying a property and have an idea of how much deposit you have at your disposal, it is sometimes worth getting an agreement in principle with your bank or engaging the services of an Independent Mortgage Consultant who will be able to find the best deal for you. This means that you don't inadvertently go and view the house of your dreams to have the dream crushed as actually you wouldn't be able to afford it.

The Mortgage

This is where I felt the most clueless in the process. How on earth do they work, what do the options actually mean and what is the best option for me? I used a Mortgage Consultant to help me with all of these questions and he was an absolute god-send. I didn't have particularly good credit as I don't have alot of it so my options were slightly more restricted. This is where my Consultant was worth his weight in gold as he made me feel much less worried about everything and assured me that I would still be able to find a mortgage but that I might need to provide a little more information.

The interest rate was slightly higher than what I would have got from the high street lenders but we have fixed the cost for 2 years and will re-mortgage after that so that I can reduce costs. My mortgage payment is less than what I was paying in rent.

I was very fortunate that my parents helped with my deposit but bear in mind that this in itself can be a cost depending on how long you have the money before you buy as solicitor's will charge you to verify that the money has come from a legitimate source.

The Legal Side of Things

I'll be honest, I don't feel like I got the same level of service from my Legal Adviser as I did from my Mortgage Consultant. I was expecting alot more of an education throughout the process and explanation of what things meant rather than documents just being sent and a signature requested.

I was able to ask questions of my parents and other friends but I would urge you to ask that things are explained and set that expectation up front so that you are fully informed. It can be quite overwhelming when a big pile of documents arrive on your doorstep! Also, try not to exchange or complete on a Friday as you can be caught out by people leaving the office earlier than usual which can have a negative effect on your plans!

There are also alot of other costs that can be added on so be sure to fully understand what charges might apply to you so that your budget can absorb these costs.

The Step by Step Process

  1. Have an idea of budget for your property purchase and try and get a mortgage agreement in principle. This is not mandatory but can help when dealing with estate agents as they know you are serious and ready to go!
  2. Do your research, if you love a property and want to make an offer then know what the last purchase price was and what the market is like in the area.
  3. If the property is the ONE then go ahead and make an offer! This is made via the estate agent and when accepted they will give you a memorandum of sale. Note that the purchase is not legally binding at this stage and there are a fair few hoops to jump through after this point.
  4. Get your mortgage offer - this will be dependent on the mortgage company conducting their own valuation. This is so they can verify that should you fall into arrears and fail to pay that they could make their money back.
  5. Arrange a survey. If you are buying a house then you will need a full one, if you are buying a flat then you can generally get away with a basic one. Make sure you read through everything as it isn't always obvious where there are concerns. My survey didn't show that there was a problem on one aspect of the property, this came through much later on and was almost a deal breaker!
  6. Once you have signed away all the documents, have the mortgage offer and an acceptable survey then it's time to decide on when to exchange contracts and it is at this point (when the contracts have been exchanged) that the sale becomes legally binding. You will need to arrange for the release of your deposit at this stage.
  7. At completion, your mortgage provider will release the funds and you will get the call to come and collect the keys! Be aware that sometimes the current owners take longer than anticipated to vacate the property. I'd just ensure that everything is in writing and you make it crystal clear of what your intended movements are on completion date.

Other Things to Bear in Mind 

The fixtures and fittings inventory is something you must look at - if I hadn't have had my parents on my back saying 'what are they leaving' then I wouldn't have chased this as my Legal Adviser didn't catch on that I hadn't received it! The seller could say they are taking anything so it's just so you know exactly what is being left.

Fees mount up and I think this is where I was slightly unprepared! I knew I would have alot to cover before I even got into my property but you will need separate budget for this.

The first mortgage payment will be higher than what your normal monthly amount is. It's something to do with the interest but mine was approx £300 more than what my monthly amount will be and it's rubbish as that first month is probably the worst time it can be so be warned!!!

Don't be scared to negotiate - if something comes up then ask for money off. You need to prepare yourself for real highs and lows during the buying process but it's all so worth it once you get those keys!

HAPPY HOUSEHUNTING!!
Share:
© SWEETIESAL | All rights reserved.
Blog Layout Created by pipdig