Shopping around, doing your homework and taking good advice from property experts is the key to hassle-free homebuying. Here’s some of what you need to look for:
Calculate your budget
Consider what deposit you can raise (from savings or family) and how much you can afford to pay for a monthly mortgage after essential and lifestyle spending. Do not allocate all of your money for the deposit. Hold back around 6% of the purchase price for moving costs.
Consider what you can afford to pay each month. How much do you currently spend on rent, for example? Are there monthly payments that you are obliged to make each month? A lender will do an affordability check before offering a loan, and your monthly income and outgoings will come under scrutiny, so it helps to have an idea of what they are.
Shop around for a mortgage
Visit comparison and information websites sbefore you visit a mortgage broker (who may charge a fee) to discuss options. This way you will have an idea of what loans are available, and if there are some that are available direct but not via a broker.
Also have a look at your own bank’s mortgage offers. Some target good rates at existing customers, or charge them lower fees.
Secure a mortgage offer in principle
If the initial conversations go well and it sounds as though you might be able to raise a mortgage, you might want to apply for an agreement in principle. Going on to choose a lender and secure a mortgage offer in principle eliminates one of the biggest risks when buying that you spend months finding your dream home only to be refused a mortgage. It can involve a credit check, which will be recorded on your file, so it is unwise to apply for multiple offers.
Start your property search
Chances are you have already been looking at what’s on the market in the area where you want to live, but if you haven’t your search will probably start online. Do not just rely on the websites though.
Register in person with estate agents. It’s old-style house-hunting, but still necessary. Select agents selling “your” type of home in your price range, then visit or telephone daily. Ask about homes they are about to market which have yet to come on sale. Explain you have a mortgage offer in place. Rival buyers may not, so you have an edge.
Instruct a solicitor
Having a solicitor or licensed conveyancer in place shows you are a serious buyer, giving a possible advantage if you are pitched against another buyer for the same home. Many lenders insist on using only conveyancers on an “approved” panel, so you may save time and money by selecting from the panel at the outset.
View possible homes
Phone the estate agent and arrange to view any property that you like the look of. Be open-minded - if a property sounds like it fits the bill, don’t be put off by photographs which might not do it justice.
When you visit, act like a suspicious surveyor, looking particularly at the structure (for hairline cracks), the walls (for damp), all windows and doorframes (for water penetration) and check for significant unfinished DIY.
Consider key personal issues: how far is it to work, the school, a pub or to the park? Is parking easy? Visit the street at night as well as day and think carefully about the surrounding area - is it improving?
Making an offer
If you like a place enough to buy it, you need to make an offer to the seller’s estate agent.
Before you do, compare the price with nearby similar homes, including on a price-per-square-foot basis (property details should include floor plans with measurements). Housing consultancy Hometrack says a typical home sells for 93.2 per centof the asking price in the UK. In a slow market like today’s it is rare for a 100 per cent offer. However, it comes down to what you think it’s worth and how much you can afford.
Instruct a surveyor
Once your offer is accepted you need to notify your solicitor so they can start work on the contract and property searches. These will show up any issues that might have an impact on your chosen property.
You also need to tell your lender. They will arrange a valuation covering price only. For peace of mind you should commission a separate homebuyer report (a basic survey covering roof, walls, drainage, windows, build quality and surrounding environment) or a full survey, particularly if you’re looking to buy an older home.
This looks in more detail at timber quality, damp, electrics and plumbing. You may want to amend your offer downwards if the survey reveals substantial problems, or you may ask the seller to remedy significant issues.
