Ten Minute Tip - Buying Property
Buying a house can be an overwhelming and daunting experience. Whether you're buying your dream home or acquiring a property as an investment, there are plenty of factors to consider. Jane Slade, Property Editor of The Sunday Express, joined James to run through some of the most important things to rememberbefore you make one of the biggest financial plays of your life.
Budget For Everything
If the credit crunch has taught us one thing, it's to borrow within our means. Budget carefully to make sure mortgage repayments are manageable, and take into considerations the effect a hike in the interest rate could have on your monthly payments.
Don't forget to make sure you've also budgeted for the extra expenditure that comes with buying a house. Legal fees, the cost of a survey, the cost of running a home and stamp duty should all be budgeted before you make your move.
Plus, the more you've saved, the lower the interest rate a mortgage lender will offer you. Aim for at least 10% of the price of the house, but in today's climate, lenders may well expect more.
Pick Your Property And Its Location Carefully
Finding the right property isn't without its pitfalls. 'Location, location, location', is the famous saying and it's as true today as it's always been. How are the transport links? Is the house on a flood plain? What are the schools like in the catchment area? Does a nearby road get ridiculously busy during certain times of the day?
Build up a good idea of the property and its surrounding area by visiting it at different times of the day. Consider also how the age of the house is likely to affect the running costs. Older houses, more often than not, will require more heating than newer properties.
Arrange A Mortgage And Buy Your House
Once again, price comparison sites are a great first stop when you're shopping for a mortgage. Mortgage brokers will also have a good idea of the products available and should be able to source you a suitable policy.
Having applied for a mortgage, the lender will run a credit check and be able to tell you fairly quickly (sometimes within 24 hours) whether your application has been accepted in principle.
If your offer on the property has been accepted, appoint a solicitor to make it legally binding. The Law Society can help you locate a lawyer qualified in conveyancing.
Next, the mortgage lender will conduct a survey to ensure what you’re paying for the property is fair (and thus protecting their loan to you). If the lender agrees with the price, you will receive a formal offer of a mortagage. Providing the solicitor hasn’t found any problems with the contract that you’re to exchange with the seller, you’ll become the owner of your house in a matter of weeks.
Consider The Value Of Improvements Carefully
Turning your property from a wreck into a palace is many people’s dream. Before doing so, it’s worth considering carefully how much improvements are likely to cost and how much it’s likely to add to the value of your house. It’s also vital that any work on your property has been carefully budgeted.
Many add loft conversions, add an extension or enlarge a kitchen, all of which can add value. Be wary, however, that some people’s dream enhancements are other people’s nightmares. After all, it's worth remembering that it’s likely you’ll be selling on and moving up the property ladder at some time in the future!
Further Reading