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MORTGAGE INFORMATION
Buying a Home Moving Home Different Mortgage Types How a Mortgage Works Glossary of Mortgage Terms Glossary of Legal Terms More Legal Lingo Glossary of Terms How to keep your home safe Leasehold Types Leasehold property guide Buying a House in Scotland
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MORTGAGE FINDER ~ BUYING A HOME
1. Work out your budget
This is the largest sum you are ever likely to spend on anything - until the next time you move. So, work out exactly how much you can afford to spend. Remember to leave cash for: stamp duty, the solicitor, the structural surveyor, land registry fees, local authority searches, the lender's legal fee, the lender's survey, the removal company and any immediate works that your surveyor advises (or mortgage company insists) should be done. Buying a property always turns out to be more expensive than it appears at first. It is best to overestimate the cost of everything by at least 10% -20%. Be prepared for costly surprises - for instance, the vendor might take away essential light fittings that will have to be replaced before you can move in.
2. Arrange a mortgage
A conditional offer will give you a head start and find out how much you can afford. When you have decided upon one, ensure that they make you an offer in writing: proof that you have finance in place will make you more attractive as a buyer to vendors. You can usually borrow up to 2.5 or three times and in some cases more, your current salary - but remember that you will still need something left at the end of each month to go out, buy clothes and take the odd holiday. Compare Mortgages and ask for a mortgage quote.
3. Search for a home
Detailed research will pay off. Research property prices in the area you want to buy, with the help of the area guide. If you have the time, total immersion is the way forward - spend as much time in your chosen area looking at as many properties as possible. The first four weeks of your search will serve as a learning curve. In this period you will get to know in detail the type of property you will and won't get for your budget. You will then be in a better position to recognise a good deal when you see it and jump in.
4. Appoint a solicitor and surveyor
Get them in place in advance. You will need to find a solicitor who specialises in conveyancing and if possible is based within the area where you have decided to buy. Ask how much the charges will be. You will also need a surveyor who will act on your behalf once you have found the property. Make sure you get an accurate quote for the type of survey you want to have carried out.
5. Make your offer
Don't hesitate. Having found your property, make your bid. Alternatively ring and then write to the vendor making the terms of your offer very clear. If your offer is accepted, notify your solicitor and surveyor, giving them the name and address of the vendor and agent; you should also give your solicitor the name of the vendor's solicitor if you know it.
6. Monitor your purchase
Know exactly where you stand. Ensure that your finances are still all in place, and that you will have enough money in "cash" for the exchange (usually 5%-10% of the purchase price). Get building insurance in place. Keep tabs on the sale, how local searches are going etc and what response your solicitor is getting. When you get the surveyor's report, look at it carefully and go through it with someone you trust who understands the jargon - surveyors sometimes feel obliged to comment on every splinter in the woodwork. Major, costly things to guard against are subsidence - you may find it very difficult to get the building insured if it has a record of subsidence - major roof repairs and dry rot. You can use the survey to negotiate the price down a little and/or get other things included in it such as carpets and curtains.
7. Differences between English Law & Scottish Law explained
In England having exchanged contracts to back out now and you will lose money. If the sale is still going forward, then you will by now have reached an agreement on the date of exchange and the date of completion of the purchase. The exchange is what it says: it involves two identical contracts based on the seller's original draft and amended (if necessary) by both parties. You sign one and so does the seller and at this point hand over the deposit. If for any reason you now decide not to go ahead with the purchase you may forfeit this money. Your property must be insured by you from the date of exchange, not the date of completion, which can be as soon or as long after exchange as you agree with the vendor. Between exchange and completion a lot of legal work has to be done. Transfer documents have to be signed, the mortgage finalised, land registry fees and stamp duty paid - or at least the finance put with the solicitor so that it can be paid. Sort out things with your lender so that your solicitor has the money to pay over on your behalf. Don't go on holiday. Check that the seller has completed their side of the deal. For instance, they might have offered to fix something - a broken radiator, a crack in the cistern, a broken door. Ensure that the work has been done. In Scotland a similar process is employed and is called the exchange of Missives. Similar degrees of satisfaction are required by both parties in order to complete the transaction which the respective solicitors acting for seller and purchaser are responsible to completion. Once an agreement to purchase is made it is binding and enforceable. (See the web site section under ~ Buying a House in Scotland)
8. Arrange the removal
Vans, utilities and change of address cards Four weeks before completion, make arrangements for the move. Book a furniture remover or arrange van hire, have change of address cards printed, organise workmen to carry out any work you want done before you move into the new property. If necessary, arrange to have things like your washing machine, dishwasher and cooker disconnected. Inform the electricity board, gas board and British Telecom that you are moving and when. Organise the connection of a telephone at your new address and for the electricity and gas to be put in your name. Arrange contents insurance at the new house. Get packing boxes and stick-on labels.
9. Planning for your arrival
Clear out junk (and children). One to two weeks before completion: Make a diagram of your flat or house and decide where you want everything to go. Label furniture accordingly. Start packing up and get rid of as much junk as possible. Label boxes saying what's in them and which room you want each to end up in. If you have children or pets try to arrange for them to stay with family or friends during the move. Tell your neighbours you are moving and if you know who is moving in. Contact the Post Office to arrange the forwarding of mail. Confirm just when completion is taking place and where you should pick up the key to your new home. Make arrangements with the seller about whether the electricity, water and heating is to be left on or off. The day before completion: Organise meals for the next day. Take children/pets to relatives or friends. Defrost fridge. Pack an essentials bag for yourself - the sort of things you would take on a weekend trip - but also pack: soap, towels, lavatory paper, a torch, light bulbs and bin liners. A small sewing kit and basic tool kit could also prove invaluable. Pack a starter kit for the kitchen - kettle, cups, plates, tea coffee, biscuits milk, plates, paper towels and a small amount of cutlery. Make sure you have plenty of cash (removal men require tipping). Charge up your mobile.
10. Completion
The place is yours! On the day, keep in touch with your solicitor who will tell you when completion has taken place and so you can collect the key and move in. If you can, get to your new property an hour or two before the removal van with your rubbish bags so that you can clear out any rubbish that may have been left and ensure that lights etc are working.
11. The formalities
After completion, your solicitor will have the conveyance stamped by the Inland Revenue. If he or she has not demanded his fee before completion - which is quite common - they will ask to be paid now. The transaction now has to be registered with the Land Registry. This can take months. After this legal formality the deeds will be handed to you or to your mortgage lender.
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