Buying a Property Buying a Property So you have just decided to take get your foot on the first rung of the property ladder and to buy your own home, then it dawns on you how do you go about it? How do I get started? What is the first thing you need to do? Is it to find a property or is it to see the bank manager, or may be it's to choose the colour of the curtains? No. The most important item you should consider in the first instance is can I afford to pay the (borrowed) money back each month? How do you do this? Firstly you need to calculate your annual earnings. If, for example, your earn £20,000 per annum and your partner earns £10,000 then most Lending institutions (Banks, Building Societies etc) will let you borrow up to a multiple of three times your income (or the higher if it's your partner's salary) plus once your partner's income in order to purchase a house or flat: -top £20,000 x 3 + £10,000 = £70,000 property value The cost of borrowing this sum of money will be approximately £400 per month (based upon a mortgage interest rate of 6.5%) over the next 25 years i.e. the period to repay this loan. Frightening isn't it. However, everybody has to stretch themselves a little in order to afford their first home. The secret is not to over do it!!! Do I need any more money? Unfortunately yes. Most Lenders require you to have within your own funds a deposit for the purchase, usually of up to 10% of the value of the property. However, this provision is always changing in a very competitive marketplace and you may find you can get the full 100% of the value from the right institution.top The other financial factors you need to consider are; solicitor, surveyor and estate agent's fees; stamp duty; and removal costs, to mention just a few. Do not despair though not all of these may apply or do not carry any cost implications. Read on below to find out more. What do I need to do next? Ok now you have decided that you can afford it how do you proceed? Next on the agenda should be finding a suitable location to buy your house that not only fits in with your lifestyle but also the size of your wage packet. Firstly identify a number of possible areas in which you would like to buy and then check out the property values from the local papers or estate agent's windows. Also speak to your friends and colleagues to find out all you can about the areas, including warts and all. Then go and visit the areas and get a feel to see if the area suits your requirements.top Once you have narrowed your choice down to a couple of potential areas make sure there is enough suitable property you can afford in your price range. Next register you interest with a number of estate agents (minimum of 3 but no more than 5 or you will have too much reading to do!) or even visit the Internet for suitable sites. (See Estate Agency explained ) If you are only buying a property you will not usually be liable for any Estate Agency fees. However, if you are also selling a house or flat then it may cost you between 1.5 to 3% of the selling price (plus VAT) payable upon completion of the sale. If your decide to sell your home through a web site there is usually a one off charge to register whether you sell the property or not, so check the conditions for selling carefully. You also have the option of trying to sell your property through other outlets, such as the local newspaper, without involving these institutions but although it minimises your expense it does not always achieve the desired results of a sold property.top What about paying for all this? Before you proceed any further and make endless visits to properties (or indeed make an offer on the first house you visit) you should first approach a Lender to agree in principal their borrowing requirements and on what terms are they prepared to lend. (see mortgages explained) Make sure to shop around to get the best deal for you either by dealing directly with a Lending institution or through an independent mortgage advisor. Found our dream home. When can we move in? You have now found your dream house or flat, the seller has accepted your offer, (which is in your price range), and now you think your home and dry? Unfortunately before you get your hopes up too much there are still several a number of other hurdles to cross and decisions to make.top If you are serious in buying a property, and hopefully you are if you have proceeded this far, then the next step is to approach a solicitor and also obtain a formal mortgage offer. However, just before you proceed further take a moment to review your situation and recheck your calculations because up until now you should not have spent any money only your valuable time. From now on in, though there is a cost associated with each of the steps taken.   Copyright 2000 everythingexplained.com

P1   Other Aspects   Stop The Mortgage Offer Once you have had your offer accepted for your dream house you must contact the Lender as soon as possible, either directly or through your mortgage broker, giving them the Estate Agent's property details. If you are successful they make you a formal mortgage offer on the property. Check all the details very carefully before proceeding any further. If you are unsure of anything you always discuss your concerns with either the Lender or your solicitor, once they are appointed. Next the Lender will usually require you to pay for a mortgage survey of the property. The cost of this ranges from £75 to £300 dependant upon property values but you may be lucky and get this included in your mortgage deal. Note this mortgage survey is NOT the same as a house purchase survey detailed below. This survey is only to give the Lender an overview of the property and to protect their interests not yours. So beware.top Finding a solicitor Firstly, just consider what a solicitor will be doing for you in the purchase of your home. They should be representing your interests, getting you the best deal they can (excluding of course the purchase price, which you have already agreed with the seller) and highlighting any deficiencies and risks to you in the legal formalities. You can always, of course, undertake your own legal affairs thereby minimising costs but be very carefully especially if leasehold property is involved. (see conveyancing explained) There are several ways to find a solicitor but always the best is personal recommendation from a satisfied customer! Failing this look in your local newspaper, contact the Law Society or indeed visit the Internet. Look for the solicitor's experience in conveyancing (a legal term for house purchase) and also their qualifications. (Make sure they are approved from bodies such as the Law Society). Once you have contacted them ask for an estimate of cost (in writing) for their legal fees, including what is to be charged as disbursements and taxes (extras to you or me).top An average price range for this service is £300 to £600 or more depending on the value of your home. Always try to get alternative quotes but do not always except the lowest because they may not represent the best value for money. Again trust a friend who has been a satisfied customer. Do not forget once you have instructed a solicitor to proceed with the purchase the money clock has started to tick. Do I need a survey? I am sure you know a friend who will tell you that they did not have a surveyor to inspect their flat and it has not fallen down yet! Well may be so, but there could be all sorts of hidden defects that they are unaware of which might not be apparent to you or I but to the trained expert would be visible. Consequently any substantial reinstatement costs that might be incurred would be avoided.top Hopefully, you would not buy a car without checking it's pedigree or getting a mechanic to take a critical look. Just remember buying a property is the largest single purchase you will even make therefore it makes common sense to protect your investment. Ok you think a once over by a surveyor might be worth it but how much will it cost? (see property surveys explained) Again dependant upon the value of the house approximately £150 to £400. Finding a surveyor Use the same broad guide lines given to find a solicitor i.e. check with friends/colleagues etc, ensuring that the surveyor has the requisite experience with house purchase surveys and is of course with a recognised institute such as a Chartered Surveyor/Engineer or RIBA Architect. Again get a quotation from the surveyor before you instruct them.top Am I now ready to move in? Well not just yet. Up until now although you have paid a few hundred pounds in fees you are not financial committed to buying this home. The seller can also pull out, as they are also not legally tied into any contract. The Government is currently reviewing this procedure because this is potentially unfair on one or more of the parties in the property chain. For example, if a single person decides to pull out from the purchase at this point in time it would have wasted a lot of time (which could be many months) and money for the remaining parties. Exchange of Contractstop At last you have the call from the solicitor to come in and sign a Contract. At this stage you will be asked for a non-returnable deposit and be required to present a cheque for usually 10% of the purchase price. The solicitor will therefore act as a stakeholder and keep the deposit, on behalf of the seller, until completion of contracts. Make sure that you have made all the necessary arrangement to get these funds ready for this day otherwise you might be disappointed. The solicitor should at this point, forewarn you that once you have committed yourself to the exchange and all the parties in the property chain have also exchanged contracts, then you would be legally bound to go through with the purchase. If you do subsequently withdraw after exchange of contracts then you will probably loose, as a minimum, your full deposit. Therefore, this course of action may prove very expensive.top The final lap Once you have exchanged contracts a completion date (the date for moving in) is set which is usually one month after exchange. This should allow you time to begin to pack away you belongs and make the final arrangements. If you are also selling a property as well as buying a new one, you will probably need a Removal Company to help you. You must contact them as quickly as you can after exchange to ensure that they can move you on the completion date. Again phone around for quotes before you instruct the Removal Company to proceed. Do not forget that this date for moving in is cast in stone! I am in! You are finally in your new home and the removal men have just gone. Is it all over? Well may be but make sure that you have contacted all the utility companies, postal service etc (see moving checklist explained) Good luck with the new home. Perhaps the next thing for you to consider is home improvements! (see our new site when it has been put up)top

Copyright 2000 everythingexplained.com While every care has been taken to ensure accuracy of the content of this site, no responsibility can be taken for any errors or omissions. Viewers are strongly advised to check information published with individual institutions, and to take legal advice, where appropriate, before entering into transactions. All interest rates are correct at the time of going to press. The information here is only for your general information and use and is not intended to address your particular requirements. Specifically, the information does not constitute any form of advice or recommendation by us and is not intended to be relied upon by you in making (or refraining to make) any specific investment or other decisions. Appropriate independent advice should be obtained before making any such decision. Neither we nor any of our site-writers make any warranties expressed or implied, as to the accuracy, adequacy, quality or fitness for any particular purpose of this information for a particular purpose or use and all such warranties are expressly excluded to the fullest extent that such warranties may be excluded by law. You bear all risks from any uses or results of using any of this information. You are responsible for validating the integrity of any information received over the internet.

P2   Explanations   Buying a House Jargon Explained   Here is where we will give you a simple guide to the meanings of some of the terms used when buying a house. Just click on a term you want to understand - in the Index section choose one of the words underlined in blue - and you will be taken to the right part of this page for that term. The site is not yet ready for use.   Index   Copyright 2000 everythingexplained.com While every care has been taken to ensure accuracy of the content of this site, no responsibility can be taken for any errors or omissions. Viewers are strongly advised to check information published with individual institutions, and to take legal advice, where appropriate, before entering into transactions. All interest rates are correct at the time of going to press. The information here is only for your general information and use and is not intended to address your particular requirements. Specifically, the information does not constitute any form of advice or recommendation by us and is not intended to be relied upon by you in making (or refraining to make) any specific investment or other decisions. Appropriate independent advice should be obtained before making any such decision. Neither we nor any of our site-writers make any warranties expressed or implied, as to the accuracy, adequacy, quality or fitness for any particular purpose of this information for a particular purpose or use and all such warranties are expressly excluded to the fullest extent that such warranties may be excluded by law. You bear all risks from any uses or results of using any of this information. You are responsible for validating the integrity of any information received over the internet.

P3   Questions   On this page we invite you to send us questions. We cannot guarantee to have answers for you, but we will try to help. Some of the questions asked will be listed here, if we think that the questions and answers are of sufficient general interest. However, we cannot give you individual replies or advice, since we are not authorised to do so in this way. Our answers will be aimed at people that have a problem of a specific type, but without naming either individuals or organisations. Our answers will be those that apply to the best of our knowledge, but questioners should take specific advice before relying on our answers. What we will try to do is to enable you to ask the right questions of advisers and to understand the answers and the implications of those answers. Please fill in this form if you have a question you would like answered, or e-mail us at  [email protected] . To Ask Questions: First Name Surname E-mail Address Questions for this Website   Previous Questions Asked: 1. 2. 3.   Copyright 2000 everythingexplained.com

P4   Try These Sites     Whilst browsing the Internet we occasionally come across excellent sites. We will list these for your future reference.           Copyright 2000 everythingexplained.com

P5   Mission Statement   Explain everything simply.   We have found that if you can't explain something simply, either you don't understand it or you are trying to hide something. We at everythingexplained.com will try to guide you through the pitfalls in life, which we ourselves may have stumbled into from time to time, so that you do not have to repeat our mistakes. We have many years of consuming, investing and generally experiencing life between us. Our contributors, who we have invited to write certain sites, have specialist knowledge of those areas and also have many years of experience. By using our sites, we hope you will be able to find answers to questions that you wouldn't dream of asking, because you would be afraid of looking stupid or might lay yourself open to being taken advantage of. We also think that the subjects we cover and the questions we are trying to answer beforehand for you are those that it seems to be assumed you will 'pick up' as you go along. These things are not generally taught in schools or colleges and represent a steep learning curve when you finally find that you are caught up in them. If you find something that you think we have not covered, or have not covered well enough - let us know. Send us an e-mail. Our e-mail address is  [email protected]. Copyright 2000 everythingexplained.com

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Copyright 2000 everythingexplained.com   Please fill in this form if you have a question you would like answered, or e-mail us at  [email protected] . To Ask Questions: First Name Surname E-mail Address Questions for this Website