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Buying a home for the first time can be a daunting
prospect, so here are 10 tips for first time buyers. |
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| 1. Set your agenda | ||
| There are many people, not just
sellers but lenders and other professionals in the housing market who are
falling over themselves to get your business and your money.
It's up to you to set your own agenda, otherwise you'll find they set it for you. Start by making a checklist of what you want in your ideal home. Then add a series of searching questions which you can put to the estate agents and would-be sellers to see how far their properties measure up to your expectations. |
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| 2. Go around with your eyes open | ||
| When inspecting potential homes,
don't be blinded by the decor, after all, it's only paper thin, but use
your eyes to spot the less obvious features. Is the roof in a good state
of repair? Are there any cracks in the walls or ceilings? Is the closed
door under the kitchen sink hiding a damp patch?
If you think you really like a property, go back at different time of day or week, preferably when it's raining. You'll not only see if the traffic is any heavier but you'll find out if the gutters need repair too! Also, ask the neighbours what the area is like to live in. If the nearest shop's a mile away and you don't have a car it could lose its attraction. |
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| 3. Take advice | ||
| You must take professional advice,
preferably from a professional surveyor, if you are really serious about a
property.
Don't rely simply on a valuation report prepared for your lender. This report is very basic and it's prepared to safeguard your lenders interests, not yours. Ask for a house or flat buyer's report, which will tell you a great deal more. If the property was built before 1900, a full structural survey would be worthwhile. It's more expensive, but it will buy peace of mind. |
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| 4. Read between the lines | ||
| You have to ask how long that
special discounted rate will last. What's the Annual Percentage Rate
(APR), which shows what you pay for borrowing all the money in the deal,
including the cost of "hidden" extras such as valuation,
arrangement and legal fees.
Also ask yourself if you have to buy something else - a particular form of insurance policy perhaps - to get that "special" rate |
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| 5. Consider getting a fixed rate | ||
| When choosing a mortgage, think
about a fixed rate loan as well as the traditional variable rate option.
Fixed rate mortgages bring you budgetary certainty over a set period.
Look out for catches. Do you pay a fee to have your fixed rate loan application processed, even if it falls through? If you move before it finishes, can you take it with you or will you have to pay a redemption penalty? When the period ends, will your lender guarantee you a new fixed rate loan? |
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| 6. Are you insured correctly? | ||
| As a first time buyer, you should
beware of being over-insured. Watch out if your lender offers you a
"standard" household content policy. Some have a minimum sum
insured of £45,000, which is far too much for many people.
Take care over Mortgage Guarantee Insurance (MGI) which many first-time buyers have to pay to protect the lender in case you fall badly into arrears. If this applies to you, ask how much it will cost and see if it can be added to your mortgage. |
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| 7. Check what's on offer | ||
| One of the most important, yet
most neglected documents in the home buying process is the formal letter
from your lender offering the loan. This document sometimes called an
offer letter, sets out in great detail not just the amounts of the loan
but also the terms and conditions.
Check your offer letter carefully. You might find some surprises such as hefty redemption charges or a high APR within it. Don't just put it away, virtually unread, in the belief that because you've been offered the money you were seeking, there's nothing else to bother about. |
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| 8. Look after the legals | ||
| Most people need a solicitor or a
licensed conveyancer to do the legal work. Don't be afraid to shop around,
getting a quotation (preferably in writing) for their work. Fees can vary
tremendously so it pays to make a few enquiries.
Ask for estimates of other legal expenses you may have to pay, such as local authority search fees and Land Registry charges. If your property costs more than £60,000 there will be Stamp Duty to pay too. Tell your solicitor if you are arranging to buy the seller's carpets and curtains. Misunderstandings here can cause delay later. |
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| 9. Move forward securely | ||
| Depending on how much you have to
move a removal firm may be necessary rather than a luxury. If you are
moving yourself, visit your supermarket for cardboard boxes. The ones they
use for packing tins are usually the strongest. Put valuables into
bubble-wrap, paper, tissue paper or even straw!
If you use a removal firm, check that your goods are insured during transit. |
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| 10. Check final arrangements | ||
| The first-time buyer's worst
nightmare is turning up with the removal van only to find that there's
been a snag and the other people aren't prepared to move out. Check with
everybody - the sellers, your lender and your solicitor - about a week
before you are due to move that everything is going to plan.
Do the same the day before. Is the lender ready to pay the money at the
appointed time? Have there been any last minute legal difficulties? Call
the removal firm too. If they fail to turn up on the day, then all your
work will have been frustrated. |
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