It is the biggest purchase of your life – let’s make sure that you get it right!
Here are the first 5 tips to buying a new home
1. Get financial advice – Day one. I was deliberating this one because I am a broker and I did not want to use this thread to “sell my services”. However what is the point in going shopping without any money?!?
A good Broker can tell you how much money you are going to need for a deposit and fees. He can also work with you to find out how much you can afford and how much you can borrow.
If you are not ready yet he can help draw up a plan to get you in a position to purchase, or if everything “fits” – he can get you an Agreement in Principle from the Lender.
2. List all of the costs
|Mortgage Arrangement fee –||Typically £500 – £1500|
|Valuation Fee||Typically £200 – £300|
|Legal Fees||Typically £800 – £1000|
|Stamp Duty||1% of the purchase price over £125,000, 3% over£250,000 as so on|
|Surveys||More detailed surveys cost more money typically £400 – £800|
|Removals||Depends on distances involved|
|House repairs and furnishings||You’ve bought the house, now it’s time to fill it up. Don’t leave yourself so broke you have to sit on the floor!|
3. Make a list of Needs and Wants
The Needs are what a property must have. For instance, if it has to have a minimum 3 bedrooms what’s the point in seeing one with 2?
The Wants are what you would like the property to have. You want to find a property with as many of these as possible, but if a property didn’t have some of these it wouldn’t necessarily be a deal breaker.
Just remember to be realistic, if you can’t find that 5 bed Town House in Kensington for £250,000 then perhaps you need to lower your sights.
When you are seeing loads of properties this will help you to keep track and short list those ones for a second viewing.
4. Don’t be shy – in the UK we don’t like to haggle but as the saying goes if you don’t ask you don’t get.
So, these are the golden rules….
- Set a maximum / “walk away” price.
- It is all too easy to get carried away whilst bidding but make sure you set a maximum price you are prepared to pay for the property.
- Start low.
Put in a “cheeky offer” say 10% – 15% below asking price, if you have someone who wants to move in a hurry they might say yes!
If they say no – ask them what they would accept. Then you can always put in another higher offer…. just remember to walk away when you hit your maximum price.
Usually you will meet somewhere in the middle.
- Maximise your position.
If you are a first time buyer with no property to sell, tell them that it means you can move quickly.
Tell them you have your finance arranged and have an Agreement in Principle with Solicitors all tee-d up and ready to go.
Tell them you have a highly motivated broker ( I’m sure I know one of those) who can get everything tied up quickly.
5. Arrange a Mortgage in Principle*
I know I touched on this earlier but the reasons for doing this are important:
1) It gives you a much more accurate reflection on how much you can borrow. A lenders calculator or a comparison site will only give a very rough indication.
2) It stops you falling in love with a property you can’t get the finance for.
3) It strengthens your buying position and show’s you are serious.
4) It can put an end to any Estate agent – “you have to sit down with our adviser……” tricks.
5) It allows you to move fast instead of losing out on a property.
6) We know in advance if there are any issues on the credit file and arrange a plan to sort them.**
*Be careful about obtaining an agreement in principle from multiple lenders as this could stop you getting any finance for a period of time.
**Did you know a single late payment on a credit card will mean some lenders will not lend to a First Time Buyer
5 More Home Buying Tips in the next blog………….
Your home may be repossessed if you do not keep up repayments on your mortgage.
Your initial mortgage consultation is obligation free. There may be a fee for our mortgage service of up to £395 though in some circumstances this may be waived. Being independent we also offer a “fee only” option which is typically 1% of the amount borrowed and any commission derived from the lender is returned to you. The precise amount will depend on your circumstances and mortgage loan amount, and will be discussed and agreed on before you make a mortgage application.