Guide to Property Buying
Guide to Property Buying
Whether or not this is your first property purchase, it is a good idea to get to terms with the property buying process. There are a few steps to consider beforehand, so we have put together an easy-to-understand guide to help you on your property buying journey.
FINANCES – WHAT PROPERTY CAN YOU AFFORD?
Almost all property purchases in the UK are made using a mortgage. To find out how much you can borrow and repay, you will need to book an appointment with a mortgage advisor. In 2014 a new set of lending rules were introduced. Since then, the mortgage application process has become more detailed and borrowers are required to declare all of their financial commitments during the application process. They will also need to reveal all of their monthly outgoings and illustrate how they would repay their mortgage should interest rates rise.
REGISTER WITH DAVID ASTBURYS
There are several advantages to being registered directly with a local estate agent like David Astburys working in the location in which you wish to live. Many properties for sale in Crouch End and its surrounding areas never make it online as we show the property details to our waiting list of buyers before the online listing is created.
If you would like first refusal on houses and flats for sale in and around Crouch End, fill out our online enquiry form (here) detailing your budget and what type of property you are looking for and we’ll give you first refusal on homes that match your requirements.
CHOOSING A MORTGAGE
Once your bank, building society or mortgage advisor has confirmed your eligibility for a mortgage and you know your budget, it’s time to think about the type of mortgage you would like.
There are numerous mortgage options and how you decide which to go for should be based on your attitude to risk and budgeting – whether you like knowing how much your repayment will be over a set number of years, or whether your finances could cope with fluctuations. There are also Government’s Help to Buy schemes – these are designed to help buyers with smaller deposits.
Property Buying with a mortgage requires a deposit. For those purchasing their first home, this will need to be an amount of cash held in a bank account, of which your mortgage lender will need evidence.
The larger your deposit, the lower the rate of interest on your mortgage. For existing homeowners, a deposit is usually substantiated by equity in the current property, although additional funds can be used to increase the deposit or should the property be in negative equity.
Studies show that 98% of property purchases have become cheaper thanks to the stamp duty reform of December 2014. The revised rates are:
Property or lease premium or transfer value SDLT rate
Up to £125,000 Zero
The next £125,000 (the portion from £125,001 to £250,000) 2%
The next £675,000 (the portion from £250,001 to £925,000) 5%
The next £575,000 (the portion from £925,001 to £1.5 million) 10%
The remaining amount (the portion above £1.5 million) 12%
There are a lot of emotions involved in property buying and sometimes these emotions blur judgment during a property viewing. The best way to prepare for a viewing is to create a checklist and a set of questions before you visit.
CONDUCTING SUCCESSFUL VIEWINGS
It is important not to forget to ask about things such as: commuting times and rail ticket prices; how much the annual utility and council tax bills are; potential parking problems or restrictions; check the age of any appliances being left behind and ask if the boiler has been regularly serviced.
It’s is questions like these that will prepare you for the financial commitments attached to owning the home you are viewing over and above the direct costs involved with purchasing. It’s also wise to visit the property and the area more than once and at different times of the day.
MAKING AN OFFER
It is best to inform your estate agent of any offers you would like to make. They will then pass these on to the seller both verbally and in writing. Any negotiating over the sum and the contents of the property will also be handled by your estate agent.
THE LEGAL BIT
You will need to instruct a solicitor to handle the legal paperwork involved (known as conveyancing). We recommend that you use a specialist conveyancing solicitor that knows the area that you are buying in. The solicitor will take care of the legal side of the purchase through the exchange and completion phase and will make sure that all documents, finances and any relevant searches take place before you become the new owner of the property. Their work will include verifying that the current owner has the right to sell the property; that any structural work to extend/alter the property had planning consent and that there are no detrimental environmental factors affecting the land or the local vicinity.
Your mortgage lender will send a surveyor to the property you are buying to establish two main things: that the property is actually worth the money the lender is loaning, and to qualify the condition of the property in respect of structural faults. There are three different surveys you can request, depending on how thorough you want the building inspection to be. The results of the survey may influence whether you go ahead with the purchase or reduce your offer. If you have checked the survey results and are happy to proceed, both parties’ solicitors will issue contracts to be signed and returned. This is the last point at which you can pull out of a purchase without financial loss.
EXCHANGE OF CONTRACTS
When the contracts have been signed, they are exchanged between the buyers’ solicitor and the sellers’ solicitor. The deposit (usually a 10% minimum of the purchase price, but this can vary from sale to sale) is transferred to the vendors’ solicitor. Once they receive the deposit the contracts can be exchanged. It’s at this point that the sale is legally binding.
A completion date is mutually agreed between all parties in the chain and set by the solicitors. Should you wish to pull out after this point, you would lose your deposit and potentially pay legal costs.
COMPLETION AND MOVING IN
Completion normally occurs around two weeks after the exchange of contracts have been signed and usually coincides with the actual moving day. On the day itself your solicitor will organise for the mortgage funds to be transferred to the sellers’ solicitor. When the funds have cleared, your estate agent will receive a call giving permission to release the keys to you, the new owner.