Buying a home is probably the biggest financial decision you will ever make, so it is essential to take time to consider all the implications.
Can you afford it?
Apart from the monthly mortgage repayments, you should also consider taking out mortgage protection insurance (in the event that you fall ill or lose your job), life assurance, contents insurance, council tax, utility bills, and ground rent and service charges if you are a leaseholder.
As part of the process, you will also need to pay for a solicitor or licensed conveyancer, surveys, mortgage fees, stamp duty (1% for homes costing £125,001 - £250,000, 3% for those at £250,001 - £500,000 and 4% over that price) and the land registry fee.
HIPs
Research carried out by Which? Magazine recently revealed that approximately £350 million is spent on house sales transactions that fall through because a survey reveals flaws which render buyers unable to secure a mortgage.
The government has recently brought in Home Information Packs for properties with three or more bedrooms, intended to make the buying process simpler. This will later be applied to smaller properties as well.
The packs, given free of charge to the purchaser, include essential information about a property including energy efficiency, whether it is freehold or leasehold and standard searches. They will help you make your choice when it comes to finding your new home.
Making an offer
Make sure that your offer is "subject to contract" as that means you can pull out of the deal if there are any problems. In England and Wales (unlike in Scotland), a buyer's offer is not legally binding, even if accepted by the seller, until contracts are exchanged.
Once your offer has been accepted, ask for the property to be taken straight off the market to guard against gazumping.
Surveys
A valuation survey will be carried out by your mortgage company to ensure that the property value will cover the amount of money lent. You will not receive detailed information of the findings.
Although expensive, it is worthwhile paying for an independent survey. There are two main types; homebuyer, that will give you a general overview; full structural, recommended for older properties and those in need of work.
Properties less than 10 years old may be covered by the National House Building Council (NHBC) Buildmark Scheme or some other warranty. The warranty will transfer to the new owner and will cover some defects that may appear after the house has been sold.
Exchange and completion
At this point, you pay your deposit and will lose it if you subsequently pull out for whatever reason. All the solicitors in the chain will exchange the contracts they have drawn up for each property and then a date will be fixed for the completion of the sale, when you can move in.
