Buying a Property

BEFORE YOU EVEN LOOK FOR A PROPERTY

  • Decide what type of mortgage you want: Repayment, Endowment, Interest only, Fixed Rate or Capped *
  • Find out the maximum amount of mortgage available to you
  • Ensure that the monthly repayments are achievable (allow for living expenses, utility bills, council tax etc)
  • Make a list of essential and desirable property features (bedrooms, garage, close to schools or park)
  • Are you prepared to buy a property in need of improvement, new build or in immaculate condition?

FINDING YOUR PROPERTY

  • Decide on the area you want and visit to familiarise yourself, talk to local people
  • Get property details from Estate Agents and the Internet
  • View as many properties as you can, ask the seller how long they have lived there and why they are selling
  • When you find a property you really like go back and look again in the evening or weekend (Is the street noisy/unwelcoming?)
  • One useful source of information about an area is Up My Street (www.upmystreet.co.uk) providing details such as council tax, crime statistics and property prices

MAKING AN OFFER

  • If you want to make an offer don't start too high, leave negotiation room. Take any improvements into account
  • Ask to view again, people notice more on a second visit
  • If your first offer is refused talk to the Estate Agent who will know what similar properties have sold for and is a valuble source of advice
  • Once your offer is accepted engage a Solicitor, give the Seller and the Estate Agent the Solicitors details

BEFORE EXCHANGE OF CONTRACTS

  • Arrange a survey on the property you are hoping to buy
  • Arrange building insurance which needs to be in force from exchange of contracts
  • Arrange life cover for the amount you are borrowing (if applicable)
  • Raise any planning concerns regarding neighbouring properties with the Local Authority
  • Lodge the deposit with your Solicitor (normally on a purchase only transaction)
  • Ensure that all necessary papers are signed and returned to your mortgage lender
  • Ensure that all relevant documentation is signed and returned to your Solicitor
  • Make provisional removal arrangements

ON EXCHANGE OF CONTRACTS

  • Confirm buildings insurance and life cover on mortgage
  • Transfer your mortgage funds to your Solicitor
  • Confirm completion date with your Solicitor, this is when you move into your new home

AFTER EXCHANGE OF CONTRACTS

  • Confirm your removal arrangements
  • Arrange for meter readings to be taken
  • Make arrangements for the hand over of the keys with the estate agent
  • Notify your change of address to banks, building societies, credit card companies, insurance companies, DVLA, doctors, dentists, Council Tax department etc
  • Arrange mail re-direction with the Post Office

*A repayment mortgage allows you to pay off a bit of interest and a bit of capital for each payment, usually monthly. At the end of the term, which is usually 25 years or less you own the property.

An Endowment mortgage is similar to an interest only mortgage, however it is a combination of savings, investment and life assurance all wrapped up in an insurance policy. The life assurance bit merely ensures that the mortgage is automatically paid off if you die.

An Interest only mortgage means that each payment, which again is normally monthly, just pays off the interest of the loan. Therefore although your monthly payment will be less than if you went for the repayment option, at the end of the term which is also usually 25 years you are required to pay off the capital. This is normally achieved by buying a policy at the start of the mortgage which should provide sufficient return at the end of the period to pay off the capital amount.

Fixed rate mortgages are exactly that. The interest rate is fixed for a certain length of time, which can be anything from 1 year plus. This means that your monthly payment will be the same every month for the length of the term. In addition, there is normally a reservation fee and some have extended tie in's, so that after the fixed term policy you may have to remain with them for a set number of years on one of their other policies.

Capped Rates set a ceiling value to the rate of interest that you will have to pay. If the interest rate rises above this ceiling value you will only pay the ceiling value rate. If the interest rate falls below your ceiling value then so will your rate and therefore your payments. Again these types of policies are for a certain length of time from 1 year plus. Congratulations you have successfully completed the process and can enjoy your new home!

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