The process of buying a house can feel like a minefield, especially for first-time buyers. From having to manage and understand all the legal documents whilst also understanding the finances, it can be overwhelming.
So, here are the important do’s and don’ts to help you find your way through the house-moving process.
1. Factor in both rate and fees when working out the cost of your mortgage deal
While it’s easy to get sucked in by lower headline interest rates, make sure that you work out the total cost of any mortgage deal that you are considering, this should include both the rate and fees.
Before signing on the dotted line, it’s also worth checking whether your lender has a good record when it comes to customer service. Always remember to compare rates, fees and customer service across thousands of different mortgages.
2. Request a full fee breakdown from your conveyancer
Once you’ve got in touch and instructed a solicitor, you have a right to see the full breakdown of costs including VAT. While it will only be an estimate, this will at least give you a good idea on what you are working with. This also prevents any unexpected surprises along the way ensuring a smooth house-moving journey.
Make sure you fully understand what your conveyancer will and won’t do on your behalf. Ask as many questions as you need to ensure things are crystal clear in your head.
3. Check your credit record
Anyone is eligible to check their credit report online before applying for a mortgage. Small irregularities, such as active bank accounts registered to an old address, can impact on your ability to borrow. So, make sure you get any errors like these corrected.
Finding out your credit score will allow you to take steps to improve your credit rating. Any bank or building society will want to see your ‘financial CV’ before agreeing to lend to you, so make sure it’s in its best condition.
4. Prepare your paperwork
Make sure that your documentation is in place as soon as possible when buying a property. You are going to need bank statements, payslips, utility bills and photo ID. Getting all of these documents photocopied or scanned onto a computer will save you lots of hassle when it’s time to send your paperwork through to your mortgage lender and solicitor.
DON’TS
1. Don’t necessarily use the conveyancer recommended by your estate agent
Conveyancing is key to keeping your property purchase on track, but if you’ve never instructed a solicitor before, you may be unsure where to even start. It is important that you do you own research and consider recommendations from family, friends or colleagues.
Your estate agent may also recommend a solicitor, but always tread carefully because this firm is likely to be a commission-based recommendation. So, there is no guarantee that they are necessarily best suited for you. However, there’s still no harm in benchmarking their price against quotes elsewhere.
2. Don’t skimp on legal services
Make sure you use a reputable and reliable firm that offers a transparent, guaranteed ‘fixed fee’ service so you won’t end up with any nasty surprises. Also, check the firm offers a ‘no sale, no fee’ service.
3. Don’t underestimate the cost of home-buying fees
Remember to always factor in all conveyancing fees when buying a home. The fees fall into two main categories, the fees you pay your solicitor and then the disbursement fees. Solicitor fees often include the fee for the property purchase, the leasehold fee, and the telegraphic transfer fee (bank transfer fee).
The types of fees under ‘disbursements’ include the costs your solicitor needs to pay to third parties on your behalf. These will include stamp duty and searches, such as bankruptcy, anti-money laundering, the search pack, and the Land Registry fee. Don’t mistake this in thinking these costs can be added to your mortgage. And don’t forget to budget for VAT.
4. Don’t assume a valuation is the same as a survey
When buying your first home, you might think an easy way to save money is by opting not to pay for a survey. But don’t make the mistake of thinking that a valuation is the same as a survey.
A valuation is just a cursory inspection to satisfy the lender that the property is worth at least the amount it’s lending. However, a survey provides an independent account of a property’s condition and highlights any repairs or structural problems that you will have to fix. It is commissioned by the buyer, for the buyer’s benefit.
5. Don’t be afraid of chasing your solicitor
Some conveyancers won’t work as quickly as you’d like, so make regular polite-but-firm phone calls and emails to get things moving. Always remember that you’re the one paying the money and they are essentially the ones working for you. Equally, always reply promptly to queries or requests for documentation, and try and reduce the risk of delays in the conveyancing process.
