Buying Property For Dummies
Conveyancing is the legal process that takes place after your offer is accepted. In England and Wales, this includes:. You can either use a conveyancer, who might not be a qualified solicitor but will definitely specialise in property, or a regular solicitor, who you should check has recent experience in property law.
Look for a firm offering a fixed-fee service - if you agree to an hourly rate, costs could quickly spiral. Property surveys help to assess the condition of the building and detect structural problems. A survey could also enable you to either negotiate the purchase price down, or ask the seller to fix any problems. The cost will depend on the location, size and type of property. But if you have a lot to move, removal companies can help make the process easier - Which? Trusted Traders can help you find a reliable firm near you. Removal company costs will depend on the amount of items you need to move and the distance to your new property, among other things.
Your conveyancer will lodge an interest in the property, enabling you to pay the seller, and apply to the Land Registry to transfer the deeds to your name. Completion often takes place around two weeks after exchange, although this is flexible and you can agree a convenient date with the seller. On completion day, the money will be transferred to the seller and you can then collect the keys from the estate agent and move into your new home. Next comes the much more enjoyable task of starting to furnish and decorate the property to your taste - and maybe even taking a moment to simply relax.
In this short video, property TV presenter Jonnie Irwin runs through the steps you'll need to take when buying your first home. Money Compare is a trading names of Which? Money Compare content is hosted by Which? Limited on behalf of Which? Financial Services Limited. Mortgage calculators. Compare Mortgages. In this article.
10 Steps to Buying a Home
Buying your first home: a step-by-step guide 1. Save for a mortgage deposit 2. Find out how much mortgage you can borrow 3. Research your chosen area 4.
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Apply for a mortgage agreement in principle 5. Register with estate agents 6. View properties in person 7. Make an offer on a house or flat. Apply for a mortgage 9.
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Find a conveyancer or property solicitor Get a property survey Research removal companies Arrange home insurance Exchange contracts Complete and move in! Video: the steps to buying a house. Home-buying: step-by-step guide. Download our step-by-step guide to the process of buying a house.
Calculate mortgage costs. The first step towards home ownership involves a little introspection. You need to take a long, hard look at yourself and your finances and determine what you are planning in the years ahead and how much you can afford to repay. How much can you afford? There's a handy Income and Expenditure Calculator on this site that can tell you the answer, but the calculations are pretty simple. Know your expenses and income Begin with your total monthly income. Add the after-tax income of you and your spouse if applicable , regular income from assets which you will own after you buy a home, and any other income.
This is your total monthly income. The next step is to determine your monthly expenditure. Don't include your current rent if you are purchasing a home to live in. Subtract your total monthly expenses from your total monthly income and the number that you have is roughly what you can afford to repay each month on a loan. You also need to consider where your career is headed and whether any salary increases are likely.
There are also family considerations. Are you or your spouse likely to need time off work to raise a child, which could eat deeply into your income? Now that you know the total amount you can devote to mortgage repayments, you should determine how much you can borrow. This amount will vary from lender to lender, and many now offer online calculators that allow you to determine your borrowing limit.
Your Mortgage offers different easy-to-use interactive calculators and tools that will help you model any complex mortgage and investment related scenario.
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You can also ask mortgage brokers, who will have a good idea of how much the lenders on their panel will lend to you based on your income, debts, assets, number of dependants and whether you are buying the property alone or with somebody else. The costs you will face The affordability calculator on this site calculates a very conservative estimate of the amount you will be able to borrow and the costs you will face depending on which state you live in.
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The resulting calculations are based on the financed amount requested, the length of the loan term and the interest rate. Remember to set enough money aside for the deposit, which is usually a minimum 10 per cent of the value of the property. You also need to pay for stamp duty on the property, which will cost several thousands of dollars, depending on which state you live in.
Borrowers in the market for a competitive home loan need to educate themselves about the different available home loans.
Additionally, borrowers need to familiarise themselves with the interest rates on these loans as well as the product features. Which loan features do you fancy? Borrowers need to decide which loan features they need. If you'd like the security of knowing exactly the amount of your repayments, then a fixed loan could be for you. If you think interest rates could fall in the future, then a variable rate might be more suitable. Loans which offer redraw facilities are popular as they allow borrowers to repay more than the minimum regular mortgage repayments and withdraw surplus repayments. Some lenders offer free redraw facilities, others charge.
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If you have surplus disposable income, then an all-in-one loan or per cent offset account might be the ticket. Putting your savings and income into these accounts offsets the loan principal and reduces the interest you pay on your home loan. This can save thousands of dollars in interest costs over the term of a loan. Once you've determined the type of loan that best suits your needs, it's time to go mortgage shopping.
You'll need proof of income such as pay slips or recent tax returns, proof of your savings history and other documents that may be required by specific lenders or brokers. It's important for borrowers to know what deals are in the marketplace in order to get the best deal. This is one time when advertising can be your friend.
2. Learn some commercial real estate vocabulary (and accept the learning curve)
Ads on television and radio, newspapers and magazines such as Your Mortgage Magazine are great places to find out what deals lenders are currently offering. Be proactive and contact lenders directly about deals on offer. Whether it's a lower interest rate, zero establishment fees, frequent flyer points or other value-adds, the more you know about the current home-loan market, the better your negotiation skills when it comes to asking your lender for more product features or a lower interest rate.