At Redbrik we understand the prospect of buying a property can be daunting.
With this Buyers Guide we hope to break down the process of getting on the property ladder in a series of simple steps.
Here are six stages to help prepare you for each rung of the ladder – one step at a time…
- THE BUDGET
As with any long-term financial commitment, buying a property is a major investment and all about the numbers.
There are many free resources available online such as budget calculators that can assist with the number-crunching to find out what sort of budget you are working with based on your household expenditure – and to get an idea of the sort of monthly mortgage repayments you can afford.
Top considerations are the money you have coming in – and, of course, going out – and you will also need to think about any assets like savings.
The upfront costs of a mortgage include valuations and surveys as well as arrangement fees.
But remember your budget is not restricted to just the mortgage itself. There are many other costs associated with buying a property you will need to factor in including a deposit – given that 100% mortgages are very rare in the current market, you will very likely need to contribute towards the purchase price.
The good news is that a deposit of 10% or more of the property’s value will put you in a strong position to secure a better mortgage deal.
Other fees associated with buying a property include Transfer of Money Fee – a charge by the lender when paying the seller of the property – and the costs of the solicitor or conveyancer working for you.
And don’t forget to add on Stamp Duty – the tax paid to the government – as well as the Land Registry Fee to register the property in your name and monthly Buildings Insurance payments.
- THE MORTGAGE
It can be tempting to start flicking through property guides or having a sneaky peek online at what’s available – but it’s important you ensure you can get a mortgage before starting the search.
Without securing a mortgage that dream property will remain just that.
Check with your bank or building society to see what mortgage deals they have on offer – plus your local estate agent will have a good idea what’s out there, too! At Redbrik we also know a lot of intermediaries who can help like mortgage brokers and financial advisers.
Get several solicitors or conveyancers’ quotes before you start looking for property – this will demonstrate that you are a credible buyer who has started the process.
Mortgage lenders will take into account your credit history as well as your incomings so it will be worth checking your credit rating to see if anything needs challenging or if you need to improve it.
If you are buying as a couple the lender will look at both incomes and if you’re self-employed you’ll probably have to provide proof of income from your business for at least two years.
Once you’ve found a deal, get a Mortgage in Principle agreement from the lender which indicates what they are prepared to lend you subject to approval of the property. This is a big step as it marks you out as a serious potential buyer, plus you will also be in a much stronger negotiating position if you have been approved.
- THE PROPERTY
Found that dream property? Here are some areas to consider though to ensure you can live there in reality.
Are there enough rooms? Does it have a garden? Is it an area close to work/schools/local amenities? What sort of reputation and crime levels does the neighbourhood have? Is there sufficient parking? Are there good public transport links? Will it need much refurbishment or modernisation work?
All these are vital considerations if you are going to live there. They will also be important factors when it comes to your property being re-valued if you choose a fixed-term mortgage deal and will have an impact when you come to sell, too.
- THE VIEWINGS
Get as much of an idea about the property before you view it to avoid wasting time – yours, the seller’s and the agent’s.
At Redrik we have lots of ways you can take a look around a property without leaving home.
Our 3D Walkthrough online experience lets you take a virtual tour and explore a property from every angle, and is the most realistic and immersive way to experience a property online.
We share a lot of images of properties via our social media channels, on our website and of course there are brochures to flick through, too.
You can glean a lot of information this way about things like room size, floorplans, building layout and décor – and rule out any properties that don’t fit the bill.
When you do set up a visit take your mobile phone with you so you can get some photos taken – with the owner’s permission – and use any notepad or writing apps to make notes (or simply take a pad and pen!)
- THE NEGOTIATION
Here we retrace two of our previous steps. First off, budget. Decide/agree a maximum limit from the start and stick to it. If you are tempted to go over, you will have to revisit your budget all over again and ensure you can afford the additional costs putting in a bigger bid will entail and can afford to keep up the higher repayments.
Secondly that Mortgage in Principle agreement should give you an advantage so make sure you use it.
First-time buyers and buyers with no chain are also in a strong negotiating position – make sure the agent and buyer is aware if you tick these boxes, too, as they are good indicators of a quicker sale over your competition.
Offer accepted? Great news – but there’s more paperwork and procedures to sort and quickly.
The lender’s valuation survey needs to be arranged, lender’s application form completed and accompanying documents supplied plus any other legal work.
- THE CONVEYANCING
Here’s where the solicitors organise the transfer of ownership of the property from the seller to you.
The solicitor will oversee all the legal issues including boundary ownership, details of planning permissions and building regulation certificates as well check local authority searches and plans for the local area.
It can take anywhere between six and 12 weeks from the day your offer is accepted to getting all the paperwork completed and queries answered, even where there is no chain and no delays are caused by issues like probate – when the solicitor must secure a copy of the will when the owner has died.
You can help speed things up by completing forms as soon as possible and responding to your solicitor’s queries promptly.
You’ll need to pay your deposit and have buildings insurance cover in place before contracts can be exchanged between your conveyancer and the seller’s. Exchange of Contracts is the last stage of the legal process after which you cannot pull out without losing your deposit and risking legal costs.
After contracts are exchanged a date for completion is set, on average at least two weeks, and then you can look forward – finally! – to Moving Day!