Our 5 Step Guide to Buying a Property

Buying a Property Guide

 

1. Work Out Your Budget for Buying a Property

Before you start house hunting, find out how much you can afford to spend on buying a property.

You’ll need to know exactly how much you can put down as a deposit and how much you can afford in mortgage repayments each month. The deposit will usually be a minimum of around 5-10% of the cost of the property. Mortgage lenders will generally offer to loan you up to a maximum of four times your (and your partner’s) annual salary to cover the rest of the cost.

If you’re unsure of your budget, it’s always wise to speak to financial advisor. An advisor can guide you through the mortgage options that offer the best rate and those you’re most likely to be accepted for. The advisor can then help you to secure a mortgage ‘in principle’, meaning that the mortgage lender provides you with a statement documenting how much they would be prepared to lend you and the interest rate on it. This statement shows that you’re in a position to buy and provides reassurance to sellers.

However, prior to visiting a financial adviser it’s worth making sure your credit score is in check. A good credit score will support your mortgage application. Check out our blog on ‘How to Improve Your Credit Score’.

 

2. Put the Right Offer In

Before making an offer it pays to research how much comparable properties are on the market for. Consider any downsides to the property that may encourage the owner to accept an offer below the asking price.

Make sure you don’t over spend. You’ll need to take into account the other costs associated with moving such as solicitor’s fees and stamp duty.

Once you’re ready, approach the property owner’s estate agent with an offer.

 

3. Arrange a Solicitor, Valuation Survey & Property Survey

Once your offer has been accepted you will need to arrange for a solicitor to carry out all of the necessary legal work or ‘conveyancing’ involved in transferring the property into your name. The solicitor will carry out Land Registry and local authority checks to see if there are any access, planning or local issues that may affect the value of the property.

The mortgage lender will conduct their own valuation survey to ensure that the property is worth what you intend to pay for it.

We strongly recommend commissioning a more comprehensive property survey, as it could flag up costly problems such as damp issues. If you then obtain quotes for the repair of any such issues, it can put you in a position to renegotiate. You could either reduce your offer to reflect these costs or ask the vendor to do the repairs before contracts are signed.

The three main types of survey are;

  • RICS Condition Report – very basic survey. Suitable for new builds. Costs around £250.
  • RICS Homebuyer Report – more detailed survey. Suitable for properties in a reasonable condition. Costs around £400.
  • Structural Survey – very comprehensive survey. Suitable for older properties. Costs around £600+.

 

4. Exchange Contracts

Once your solicitor has completed all the checks, your offer has been finalised and the lender has confirmed the mortgage offer, you can now exchange contracts.

Before you do, go through the contract with your solicitor. Make sure you fully understand it and have any queries resolved.

Once contracts are exchanged both you and the vendor are committed to the sale. You will then arrange a completion date, which is when you can move into the property.

As a condition of the lender, you are obligated to arrange buildings insurance from the day contracts are exchanged. The mortgage valuation report will include the rebuild value, should anything happen to the property, which you will need when purchasing insurance.

 

5. Completion & Moving

The remaining funds owed to the seller are now transferred from your lender via your solicitor. Your solicitor will register the sale of the property with the Land Registry and get the new title deeds. You then have 30 days from the completion date to pay any Stamp Duty owed.

It is recommended that you book a removal company well in advance. They are typically cheaper to hire on a weekday. Consider whether you will have any issues moving your existing furniture into the property and whether you need to order any new furniture.

Now all that’s left to do is move in and make it your home!

 

 

Your home may be repossessed if you do not keep up repayments on your mortgage.

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