So, you’ve decided that now is the time to take the plunge and set your feet firmly on the property market by buying your first home.
Though buying property can be an exciting time for many, it can also be a daunting experience and will be one of the largest financial commitments you will make in life.
So what kind of issues should you be considering when house-hunting?
1. Know your budget
It is important before you get going to seek the advice of an independent financial adviser to find out how much of a mortgage you could be given by a lender and how much of a balance you will have to pay towards the property from your own savings.
A deposit of around 10% of the house price is normally required but the more you can put down to begin with, the better the mortgage deal you will be able to get.
Be realistic about your lifestyle after you move into the property and don’t overstretch yourself in your monthly mortgage commitments. Remember you will also have other outlays before you get your keys such as legal fees, additional surveys, mortgage product fees and stamp duty so be sure to figure them into your budget along with any costs for redecorating and furniture.
2. Research! Research! Research!
It’s a little odd that we make a commitment to spend a very large sum of money based on a quick walk round a property, possibly with other potential buyers present. When you are viewing a property you like, ask as many questions as you can; When was that sunroom built? Does it have planning permission? Is there a warranty? Who are your neighbours? Who owns that massive tree overhanging the garden and who is responsible for trimming it?
Get a second viewing of the property and consider commissioning your own survey – remember, a survey carried out for mortgage purposes is for the bank’s protection, not yours.
If you don’t already live in the area, then visit the location at several different times of the day and night, weekday and weekend. The character of a neighbourhood can really change depending on the time of day. Check the amount of rates payable for that area. Check out local schools, transport routes and sports facilities. Ask yourself; “Is this somewhere I really want to live?”
3. Be aware of ‘common areas’
Many new developments and apartment blocks will have common areas containing stairs, lifts and common recreational space.
All apartments should have the benefit of a management company who look after the maintenance and insurance of common areas – this is also common in many new developments.
The weeding of all those flowerbeds isn’t cheap and so to maintain and insure the common areas of a development or apartment block, each resident is required to pay an annual service charge to the company managing the development or apartments. This charge may be over £100.00 per month and in some developments substantially more. The estate agent showing you around the property should be able to give you an idea of the service charge before you place your offer. Ask yourself can you afford this as well as your other outgoings.
4. Make yourself an attractive purchaser
Demand for property is now strong and you want to have the competitive edge if you are bidding on a new home. The key to this is being prepared:-
- Have a mortgage agreement in principle in place – this is a document from your chosen lender saying they are happy to lend to you.
- Have proof that you have the deposit monies in your bank account.
- Return calls to the estate agent promptly.
Showing that you are keen and engaged can go a long way to securing your property. Speak to a solicitor in advance and know who you are going to appoint to represent you in the purchase of the property