Finance is the first thing to consider when you are buying a property – and most people will need a mortgage, as well as a deposit.
If you already have a property to sell, get a valuation and the advice of an estate agent on how to make your current property more saleable – for example, cleaning carpets, getting rid of clutter and sprucing up the paintwork can make an enormous difference. Also repair anything which is broken, such as dripping taps, damaged skirting boards and broken tiles.
The normal deposit if you do not already own a property is10% of the asking price – eg if you are looking at properties worth £250k, you will need £25k. Sometimes you can buy with a 5% deposit, which means your mortgage will be larger – but the days of the 100% mortgage when you did not need a deposit have been put on hold, although some lenders are cautiously looking at 100% mortgages again.
Shop around for your mortgage and compare interest rates – as well as mortgages which offset your mortgage balance against savings, as these may help you pay off the mortgage faster.
You also need to decide between a freehold or leasehold property – leases can be difficult if the freeholder who own the lease fails to effect repairs to the building or your flat under the terms of the lease and you have to take them to court, which can be expensive. Freeholders can sell on properties during the term of your lease.
You will also as a leaseholder have set obligations under the lease – and will have to pay a service charge every year, which may be excessive. There are laws surrounding service charges, but again these can be flouted by unscrupulous freeholders.
Leases also contain clauses called entitlements and easements, which may grant others access or right of way across a garden or land attached to the property – or can prevent you from carrying out certain works to your home or developing it, so make sure you know what these involve.
Your lease need to be read very carefully by your conveyancing solicitor, so choose a reputable conveyancing firm if you are buying a leasehold property.
Also if you have pets, make sure your lease permits them to be kept on the property.
With freehold properties you own the property outright – and if you are looking for a flat, look for those which offer a share of the freehold with the other owners, as you will decide between you maintenance issues and how much is spent on these.
Can you afford to buy?
If you are thinking of buying a house, here are the costs involved:
- Deposit (10% of purchase price)
- Purchase price (funded via a mortgage usually)
- Surveyor’s fees
- Conveyancing solicitors’ fees (online conveyancing solicitors are often faster and cheaper, but choose a reputable firm)
- Disbursement (search fees, Stamp Duty, postage, phone calls, photocopying, faxes, etc)
- Cost of moving; and
After you have moved in:
- Monthly mortgage payments
- Buildings and content insurance
- Council Tax
- Service charge (leasehold properties)
- Utilities bills (gas, electricity, water rates, phone bills, broadband)
- Parking permit
- Refurbishments, repairs, cost of furnishings
- Household running costs – eg cleaning products
- Cost of commuting to work – how much it costs and how long it takes you to get to work can be a deal breaker when you are buying a house, so make sure you factor this in before you make an offer.
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