How to prepare to purchase your property
Your Credit Profile:
Before you consider buying a home, you should find out about your Credit History and Score as Banks use this to influence their decision on whether to loan to you.
Set up an account with a site such as Experian or Credit Club and have a look at your profile- this will tell your Score, the average Score in your area, your Financial History as well as providing hints and tips on how to improve your Score.
Even though how your Credit is measured varies from Bank to Bank, you should be fully aware of your own profile, so you know if you are in the position to buy before you start any applications.
Don’t go in blind! When you start looking for your perfect property ask yourself the following questions:
- What do we need from a property?
- What do we want from a property?
Only when you know this can you start to narrow down your search and determine before you even inquire about a property, is this one going to be right for us?
It’s always worth checking out the area any property you are interested is in before you view it. Go by at two different times to see the difference, once in the day and once at night- you’d be surprised the difference a time makes! After all, the area can’t be changed!
|Average Prices in Birmingham:|
|3 bed semi-detached home||£250,000|
|Home Buyers Survey||£500|
|Estate Agent Fees||£1650|
|Stamp Duty||£100 per £5000|
|over house value of||£130,000|
|Storage||£50 per day|
|Post Redirection||£33.99 for 3 months|
|Emergency Costs||£1000 recommended|
|= £4,403.99||for FTB minus cost of property|
|= £8,553.99||for STB minus cost of property|
Make sure that when you find a property, you consider the average running costs of the property, council tax charges, changes to home and car insurance policies and the Energy Performance Certificate (EPC) – you are paying more than just the asking price! You need to be sure you can afford the property you want.
You need to consider if you have the available funding for the following before you look to buy:
- Cost of the property
- Banks/Brokers Fees
- Cost of the surveys
- Cost of the solicitors
- Cost of the estate agent fees
- Cost of Stamp Duty
- Cost of Storage
- Cost of Moving
- Cost of post redirection
- Emergency costs
Red applies to people also selling their property as First Time Buyers don’t pay towards a sellers Estate Agent Fees and don’t pay Stamp Duty for property prices up to £500,000.
Agreement in Principle
When you make an offer on a property the estate agent will require adequate proof of funding to make sure that you have the funding available in order to afford the offer you have made. This will be bank statement(s) if you are lucky enough to be able to fund your purchase with full cash or, if you are using the route of a mortgage you will need to provide bank statement(s) to show your full deposit amount as well as needing to ask the bank/broker to provide you with an agreement in principle certificate.
This certificate outlines that the bank has agreed in principle that looking at your finances and affordability, they can loan you up to a certain amount to cover the cost of purchasing a property. Example AIP
Things you need to know about an AIP:
- They only last 3 months so, only ask your bank/broker to provide this to you when you are seriously looking for homes and/or you have found the property you wish to make an offer on.
- Applying for an AIP affects your credit so, don’t blindly apply for any and all offers from various Banks- research all the offers first and go into branches directly so they can do ‘soft searches’ initially and find the right deal for your first without you affecting your credit.
- Speak to a broker! Speaking to a broker like Ben Wakeman allows you to be fully prepared for buying a home and gives you the upper edge. Ben has more than 60 contacts that he can speak with to find you the best deal- he does the hard work, researching what is on offer for you and he will only apply for the mortgage when he is CERTAIN he has found a deal that will work for you and will be successful. 24/7 communication and various levels of contact via telephone conversations, face to face meetings, emails, texts and letter correspondence-Ben will get you your Mortgage. Even our staff have used him for their own purchases!
Get a 2nd Viewing:
When you have found that dream property and you have had your offer accepted, we advise that you get a 2nd viewing. Request from the estate agent for a longer period to spend at the property and this time, look at the finer details. Have a think about any works you would want to do, prepare a list of questions you may not have asked the first time round and decide now if you want to have a Home Buyers Survey done on the property!
Types of Common Surveys:
When you purchase a property, various types of surveys can/should be done to make sure that the property is of a good standard and to highlight any works that you may need to consider doing. Some surveys have to be done, take a look at the list below to check out what you would need/should have done:
- Mortgage Survey - this is done by the bank you are having the mortgage loaned from and must be done if you are having a mortgage. Some banks charge for this, some don’t- your Broker can help you find the best and cheapest deal!
- Home Buyers Survey - this is not a necessity but, we do recommend that you get one of these done. They act as medical report for a house and identify for you the quality of each area of the property and outline a 1, 2, 3 recommendation on work needed. 1= no work required, 2= may need to be looked at in the future but is fine currently, 3= needs soon to immediate attention. Be aware that Gas and Electric are always flagged as 3 on a report. If the surveyor is not handed a safety certificate for these at the inspection, for safety reasons they always flag it as a 3 so you make sure the checks are done. A solicitor will usually satisfy these checks for you.
- Home Condition Report - This is very similar to a Home Buyers Survey in the respect that it acts as a medical report for home but, it doesn’t give you a figure on the value of the property at the end. We often recommend one of these surveys in the place of a Home Buyers as they can sometimes work out more cost affective and, as the Mortgage Survey will have given you a figure already.
- Timber and Damp Survey - This is a report that is usually conducted on a property at the request of a buyer when a recommendation has been made on one of the above reports. This is a more in depth look at potential damp in a property and provides resolution and costings to sort. Rudders and Paynes are a very good company we recommend for this!
- Structural Surveys - This does as it states, it checks the structure of a property and highlights any issues there may be with things such as subsidence.
Whether you are purchasing or selling a property, you will need to instruct solicitors as they do all the legal work required for the purchase/sale. Your estate agent will communicate with them through-out the sale and aid in the process towards exchange of contracts and completion of sale. So, what is it the solicitor is doing?
- When you have chosen a solicitor (don’t worry if you don’t know who to use, we can recommend some to you!) you need to inform them that you wish to use them and pay the initial starting fees- prices vary.
- The solicitor will send you a client care pack to complete
- The solicitor on receipt of this pack and the sellers care pack with instruct searches (basically asking questions about the property)
- Upon review of the care pack from the seller the solicitor will raise inquiries about this.
- They will gain a copy of the mortgage offer following survey
- They will then ask you the buyer to look over the replies received from inquiries and raise any additional inquiries if needed.
- They will ask you to go into office and sign the contracts and decide upon a completion date.
- Contracts and funds will then be exchanged- usually a week before completion.
- Completion date arrives- the solicitor will notify the agent the sale has completed, and they can release property keys.
- The agent will call you to collect the keys- CONGRATULATIONS!!!