Residential mortgages
Purchasing a property can be a truly daunting task and whilst, as the largest single investment you will make in your lifetime, it is perhaps right that it should be a carefully considered one. We do not believe it should be quite so intimidating. Consequently we have developed this step by step guide to make the whole process a little more understandable.
The mortgage process
Step 1 – Your budget
It is an unattractive but nonetheless critical fact that the property you buy is more likely to be dictated by your budget rather than your aspirations. So before considering what and where to buy, focus on the cold hard facts. What can you afford – to borrow and repay?
Whilst it is possible to undertake a certain amount of research on your own, the increasingly complex mortgage market may leave you with more questions than answers. Consequently you are making the right initial move ~ obtaining professional, independent mortgage advice. We can advise on the best mortgage for your needs; then once you have your finance in place, you will be in a favourable position to proceed with your search.
Step 2 – Where to buy
Whether you’re a first time buyer or a seasoned veteran the old adage location, location, location still holds merit. It is however not simply a case of identifying where you’ll get the best property for your money. But where is the best place for you, your requirements and your budget?
Are you looking to stay locally or move away? Are the up-and-coming areas, actually up and coming? And if so how easy is it to get to work? If you have children, how do the schools in the area perform and are there safe places for them to play? What are the local amenities like and will you feel safe making your way home at night?
With so many questions, we advise you decide what is important to you. Write these criteria down, weighting them accordingly. Refer to these as you begin your search.
Step 3 – What kind of property
Again, decisions, decisions. House or flat? Detached, terrace, bungalow? Are you looking for a new property or are you willing to do work, if so how much? Would you even consider building your dream home from scratch? Quite logically, the type of property you choose is affected by your needs and wants. Understand what you want from the property firstly then balance this with your practical need. Remember that both your needs and wants will alter overtime as your lifestyle changes.
The same rules apply if you’re not planning on actually living in the property yourself but are looking at it as an investment. Think about your target market, what will they need and want? Also consider your exit strategy what will the re-sale value be?
Step 4 – The search
Now that you know what you’re looking for and where, the fun begins, finding that perfect property. Normally this means instructing a string of estate agents, working closely with them as they follow up leads and arrange viewings. These days the internet is an increasingly valuable tool to search the market, allowing you to view estate agents, private sales and auction sites.
When you think you’ve found the right place, approach the viewing in an equally methodical manner. Apply your criteria; does the property fit the bill? View it more than once and make sure you have all your questions answered, obtain answers in writing if necessary.
Step 5 – The offer
So you’ve found the property and you want to make an offer. The outcome rests on two pieces of information; how much you are willing to pay, and how much the seller is willing to accept? Consider the vendors circumstances, are you in a better bargaining position? Remember you are selling yourself to the vendor as much as they are selling their property.
The period between issuing your offer and having it accepted/rejected is easily the most nerve wracking. It helps to be dispassionate at this time, should you be unlucky with this property, the chances are that something else will turn up.
Step 6 – The legal obligations
Congratulations, your offer has been accepted. Now the legal wheels must turn to secure ownership of your new home. Note at this point the property is “Sold Subject to Contract or Under Offer”, which basically means that neither party is tied. This is a double-edged sword; you can pull out or renegotiate your offer following the survey but also the vendor may gazump your offer by accepting a higher bid. To avoid this you may insist that the property be removed from the market as a condition of your offer.
If accepted, before the lender agrees to the mortgage, a valuation report will produced by a surveyor to confirm that the property is adequate collateral for the mortgage loan. This is a basic survey, you may also wish to have a more extensive one conducted to ascertain the condition of the home and detect any problems.
By this time it is advisable to have found a solicitor who specialises in conveyancing. As soon as, and not before, your offer is accepted they will make a search on the property, conduct all the necessary legal checks and draft your contract. Once your mortgage is finalised, the solicitor will arrange for both buyer and seller to exchange the contracts, and completion of the deal can go ahead.
Step 7 – Moving
Sadly the stress does not necessarily stop here – packing up and moving is in itself quite an operation. Some people, particularly those moving with their job, avoid the hard work by employing a relocation company to take them from the old house to the new one.
But for most people it’s a case of either hiring a van and doing it yourself – an option common with the first time buyer – or choosing and employing a removal firm. If there’s any gap between moving out of one home and into the next, you may also need to find out about storage facilities
Step 8 – Settling in
Before you start making your new property your home, you need to make sure it’s properly protected. This is not just a matter of checking the locks on the doors and windows. You must also make certain your insurance provides you with appropriate cover.
Step 9 – Selling your property
For most people, no matter how happy they are with their home, there comes a point when a change is either desired or necessitated. When looking to sell, a good starting point is to put yourself in the position of your prospective buyer. What initially attracted you to the property and how have things improved since? Who are your target market, and why does your house appeal to them?
Speaking to estate agents will provide you with a range of potential prices and practical advice on what will help sell your house. Look at similar properties in the area and recognise how they compare to yours. Naturally you don’t want to price yourself out of the market but at the same time you don’t want to undersell your home. It may sound obvious but make sure that both the exterior and interior of your home is clean, tidy and clutter-free for all viewings, a scruffy home really will put any potential buyers off.
Step 10 – Co-ordinating the sale
Once an offer has been made on your home, your buyer will go through the same process you did when buying the property. You, however, are likely to be coping with simultaneously co-ordinating the legal and financial side of buying and selling too. Get as much help from your solicitor and estate agent as you can, but be aware that being involved in a chain of buyers and sellers does mean there are more potential problems.
For example, your buyer may pull out meaning that you may lose out on your new home if you can’t find another buyer rapidly enough. There is no guaranteed way to avoid your sale falling through, just keep in constant touch with your estate agent and be ready to move quickly.
For more information, please contact us