What you need to know
Over the years we’ve helped thousands of clients to purchase their dream homes, some of them taking their first steps onto the property ladder.
Our experience means we know just how exciting, but also nerve wracking and overwhelming the whole process can be – after all you don’t buy a house or commit to spending that sum of money very often!
We are here to guide and support you throughout the ups and downs of your home buying journey, aiming to ensure you have the right guidance and support every step of the way.
Money talk: mortgages, deposits, and the rest.
What is a mortgage?
A mortgage is a large loan, usually from a bank or building society. They assess your viability on a variety of factors based on your financial situation. Then, you pay it back to the lender monthly over a long term, like 25 years. You will also have to pay interest back on the loan. It’s a significant debt to have but is the primary way most people can buy property.
How much deposit do you need?
Some lenders offer a 95% mortgage, so you would need to put down a 5% deposit.
As an example, if you were buying a property for £200,000, you would need a £10,000 deposit, if you could put down a 10% deposit it would be £20,000 or 15% it would be £30,000. The bigger your deposit, often the better your interest rate and lower your monthly repayments. Also, a bigger deposit can mean you’re more likely to be accepted for a mortgage.
Other costs to consider: –
- Survey costs.
- Legal fees (which would include searches and disbursements).
- Stamp Duty (Land and Buildings Transaction Tax for Scotland and Land Transaction Tax for Wales).
- Insurance – building and contents.
- Life insurance – the lender is likely to require this, so if anything happens to you, the mortgage debt is settled.
- Moving costs.
- Property renovation costs (if applicable).
- Property maintenance costs from servicing the boiler, mowing the lawn to replacing roof tiles and cleaning gutters.
- Furniture, appliances, and other homeware to put in your new home.
- Council tax, gas, electricity, water and sewerage.
Stamp Duty Calculator
Financial Advisors
Financial advisers come in many guises.
Some mortgage brokers are only able to offer you products from a panel of certain lenders they are tied to – for example, your own bank will only offer its own mortgage products, this limits your options on getting the best intertest rates and ultimately what you pay monthly on your mortgage loan.
Sometimes mortgage brokers work within estate agent offices. Big corporate estate agent chains commonly target their staff to drive you to their in-house mortgage people.
Independent mortgage advisers often have access to all the deals in the market at any one time. They are often incredibly supportive, and their speciality is mortgages. This means they’re very in tune with the marketplace.
Independent financial advisers may charge a fee for their services, and they have excellent relationships within the whole of the financial marketplace. This means they can negotiate the best mortgage for your personal circumstances, often being able to assist in circumstances where a bank has turned a mortgage application down directly, they can do this as they have built up relationships with more flexible lenders.
They can also help you to get insurance with the best deals and help you with things like your pension. So, these people can become your money ‘go to’ for many years.
Before you go out viewing properties it is best to know your limits and what you can afford – speak to an independent mortgage advisor who will be able assess this with you and often apply for a mortgage agreement in principle with mortgage lenders, this will give you confidence that when you locate the property you want to buy you are in a strong position to go ahead, it also shows the estate agent you are a serious buyer.
Remember that you can often secure a better deal when you have a significant deposit. Saving for your deposit can feel like a big mountain to climb. However, there are some small changes you can make to keep yourself on track.
- Create a vision board with your favourite property and interior styles – somewhere you’ll see it regularly. This can help you stay focused on your goals.
- Set up an automatic transfer so that each month an amount of money goes straight into a savings account. It will build up without you even having to think about it.
- Tell your friends and family about your goal. They can encourage you to make good decisions. It’s much more fun to be thrifty with other people, too. You could do things like cook at home together, instead of spending on a takeaway, for example, skip the takeaway coffees, make a packed lunch instead of buying lunch, skip that take away coffee a few times a week. Little things like this can help you save money so you can add to your savings even faster.
How to find your ideal home
When you first start thinking about looking for your new home, you may have a dream in mind, and you may have certain things that you cannot compromise on – like the number of bedrooms.
Perhaps you need off-road parking, a large garden for the kids or a room you can use as a home office.
As you research the available properties, you may discover that your dream home is not realistic within your budget. This is perfectly normal.
Remember this happens regardless of how much money you have to spend, whether this is your first property or your fifth, so it is best to be open minded and flexible.
Where to look
You will have likely heard of websites like Rightmove, OntheMarket or Zoopla. These are great to browse for homes. You can get the gist of what kinds of properties are available in what price brackets.
Don’t fall into the trap of thinking every available property is on those sites.
Register with local estate agents. Give them a call to explain your budget, preferred area(s) and requirements.
When an estate agent goes to see a property that will soon be available, they follow a process before it can go online. Things like completing paperwork, writing adverts, taking photos or videos have to be done.
Most independent estate agents will contact the people they have registered on their database, so if you are registered with the agent you could potentially get to view the property and if you like it make an offer ahead of other prospective buyers.
Visit the area
If you know roughly where the property is, go for a walk nearby. Don’t worry too much about the property itself. You’ll get to check that out on the viewing. Get a feel for the neighbourhood, and if it’s the sort of place, you could see yourself being happy. See where things are nearby that could be useful for you or desired, like a local shop, public transport, local parks and schools.
Get prepped
Make a list of things to check and questions to ask on the viewing. Of course, you might not have any, which is also fine. However, if you do have things you want to chat through, it can be helpful to have those prompts with you.
Don't worry
Estate agents are experienced at supporting buyers. Feel free to voice any concerns you may have. There’s no such thing as a silly question. The laws in the UK do a lot to protect you when you’re buying property. The chances of something awful being hidden is slim, but you can instruct a surveyor once you have your offer accepted to check things out properly. If you see cracks, for example, the chances are they’re from settlement and not structural, but if you use the experts, you will be well informed on the condition of the property.
Don't delay
If you like it, make an offer as soon as you can - don’t miss out on ‘The One’.
When the property market is busy, competition to secure a property can be tough, speak to the agent and let them know your interest, your offer and buying position so they can speak to the vendor without delay.
Please feel free to contact us, we are here to help! Register your details with us so we can keep you up to date of new properties coming to the market.
Making an offer
Once you have found the property of your dreams, the next step is to make an offer, this is an exciting and nerve wracking time.
You can submit your offer verbally, either in person, by phone or in writing. The agent must pass the information to the vendor (the current owner) for their consideration.
To put yourself in the best position possible it helps to tell the story of what makes you a good buyer, highlighting why they should choose you, and don’t always assume that just by paying the asking price will be enough. Vendors often like to know why you are moving and what it is that has made you love their property so do tell the estate agent this too.
Be ready – know how much you can afford and be prepared to supply the evidence to confirm it (your mortgage agreement in principle and proof of deposit monies). This will show that you are a reliable, organised, and serious buyer.
Chains – First time buyers and buyers with no chain, along with buyers who have pre-arranged mortgages are attractive to sellers of course, but if you are selling your current property in order to purchase your next one make sure you know the details of your buyers position to tell the estate agent – they will also need to contact your selling agent to confirm these details.
Speed – be sure to check if the current owners are in a hurry to sell or have been trying to sell for a long time. If so, they may be willing to accept a lower offer to make the sale and do ask if they are buying another property to move to or if the property is chain free.
Price – some vendors are not in a hurry to sell and simply want to maximise the price that they can achieve. Sellers who are not in a hurry to move are more likely to hold out for a higher price or asking price offer.
Be confident – even if your offer is not at the asking price, don’t apologise. The offer is what you are prepared to pay for the property.
If your initial offer is not successful, there could be a couple of rounds of offers and counteroffers before an agreement is made. An agent is required to be transparent with you and will let you know if there are other people interested in the same property, sometimes if a number of people are offering on the same property, you and the other parties will be asked to make your ‘best and final’ offer to make the process as fair as possible.
Knowing your budget ceiling is crucial so decide your maximum limit from the start and stand firm. If the seller refuses to budge, you need to think very carefully if the property really is worth the extra money and of course if you can afford it in the long term.
Do your homework and check what the property is worth. Sold house prices can help give you an idea of recent sales but it is also a good idea to compare what is currently on the market nearby. Also, if there are any repairs required, in tougher times when there are fewer buyers, sellers may be more willing to negotiate on price.
Once you make an offer make it clear that it is:
Subject to contract (STC) – the final sale takes place only when solicitors have exchanged legally binding documents.
Subject to survey – this allows for the cost of any faults or issues to be considered once your surveyor has checked the property out.
Once your offer has been accepted – ask for the property to be taken off the market and no longer advertised for viewings.
You should receive a letter from the estate agent confirming your offer has been accepted, and whilst this is not legally binding it sets out the intention of the vendor to sell to you. If you don’t receive this then make sure to ask for one.
Introduction to conveyancing
Quite simply, conveyancing is the process that happens between you having an offer accepted on a property and the completion, the point when you to become the new legal owner of the property. It is the transferring of a property’s legal title from the previous owner to the new owner.
Be aware that it can take on average between 8 and 16 weeks from the day your offer is accepted to legal completion, even where there is no chain.
What does a conveyancer do?
- Confirms your identity.
- Orders and checks local authority, water authority and Environmental Agency searches, along with mining searches (where applicable), and checks plans for the local area – e.g., proposed new roads, developments.
- Obtain the seller’s responses to questions, such as who owns the boundaries, whether they have had any disputes with neighbours and what fixtures and fittings are included in the sale.
- Checks copies of any guarantees on the property, details of planning permissions and building regulation certificates.
- Checks the seller really is the owner of the property and prepares a Report on Title for you, they will arrange for you to sign your contract.
- Receives your mortgage offer and arranges the mortgage monies to be drawn down in time for the completion of the sale.
- Exchange of contracts takes place when all parties are ready and happens between the solicitors, usually by telephone. Following exchange, the signed contacts are exchanged, it is at this stage all parties are legally committed to the transaction.
- Discharges your current mortgage (if applicable) and/or draw-down funds for your new mortgage.
- Pays the sellers solicitor the agreed purchase price on completion of the sale.
- Arranges registration of the property title in your name.
- Pays stamp duty tax on the property.
*Disclaimer: The information in this guide does not constitute legal or financial advice.
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