Top Ten Tips When Buying A House

Top Ten Tips When Buying A House

27 Jun 2019

Whether you’re a first-time property noob, or a millionaire magnate, here’s 10 top tips for home-buying in 2019. These should help see you right - even in the uncertainty of Brexit Britain. So with that ...

1. Beware of Brexit:

Fed up with it? Yep, but unfortunately playing the property game amid Brexit’s uncertainty is a risky business. Earlier this year, Bank of England Governor Mark Carney warned that leaving the EU without a deal could send house prices in the UK tumbling by a third.

Even before prices fall - if indeed they will - experts are already saying that it’s a buyers-market out there. So if you plan to live in your new home for the foreseeable, now’s a good time to buy. If you’re buying to renovate and flip for profit, then maybe hold off until the Brexit dust settles.
Don’t ignore the Brexit effect when buying.

2. Research the area PROPERLY

Taking a tour of the neighbourhood is a good way to get a snapshot of what your new life could look like, but don’t let the area’s beauty (or otherwise) cloud your judgement. 

Check for essential amenities, transport links and schools before committing. Be sure also to get details on crime rates and flood risks - you can easily get all of the above online. 

It’s also worth checking the government's planning portal for new building works in the area. After all, there’s nothing worse than having your new view blocked by a power plant or stadium, right?
Has the area got everything you need? Is it safe?

3. When viewing come prepared

Charging in all-guns-blazing might help you get a gut feel for the property, but it takes a cooler, more methodical approach to really size the place up. 

Before setting off, make a list of all points you want to cover. Think about energy performance and remember to look for damp or signs of it. Is there double-glazing? Gas or electricity? What’s the parking like? Factors fees, council tax, party house at number 69? Think outside the box. 

In isolation, no one problem needs to be a dealbreaker. But issues cost money and you have to square said costs against your budget. Failing to think about future problems and expense could be the difference between snapping up a dream home or buying yourself a living nightmare.

When viewing, check the place thoroughly.

4. Get ready for a fight

Imagine all is in place: you’ve got the cash (or at least borrowed it), and you’re ready to pull the trigger. You’ve fallen in love with this place! Yes, but so have several other people. 

When it’s time to put in an offer, work out an accurate upper limit that you can honestly afford and DON’T GO OVER IT. Make a good solid offer, don’t try and be cute and cheap out. If you love the place, chances are someone else does too - and they’re prepared to pay at least market rate. 

If a home is listed as ‘offers over...’ (very common in the Scottish property market - more later) then be assured that you will pay over the asking price. Often significantly so.

Don’t bankrupt yourself, but don’t cheap out either.

5. Shop around for mortgages

For most people, new home = mortgage, and there is a confounding range of products out there to tempt you. Be aware, however, that some mortgages can end up far more costly than others, and it always pays to go and see a mortgage advisor, who’ll help you find a product that best suits your circumstances. 
Remember that a bigger deposit generally means better mortgage rates; and can end up saving you a lot of money in the long run, even if it costs more up front.

A wildcard bit of advice - in the tech-era there are several start-ups and disruptors offering non-traditional mortgage products. So definitely do your research and keep your ear close to the ground … without taking unnecessary risks.
See a mortgage advisor, do your research.

6. Get a big enough deposit together

It can take months or years, but pulling together a deposit is an absolutely crucial part of the process. Most mortgage lenders ask for at least a 5% deposit. 

But in most cases it really is, if possible, best to gather as much deposit cash as you can. The average is about 20%. It’s a whack to be paying up front but putting over a big deposit will reduce your monthly repayments and probably improve your mortgage rate. Always get advice, but rule of thumb - more deposit = better.
More now means less later.

7. Get Life Insurance

Not top of the list of considerations when buying a new home, but a vital one nonetheless. Strictly speaking, it’s not compulsory to get life insurance when taking out a mortgage, but most lenders, banks and mortgage brokers will encourage you take their proposed cover and may even suggest that it's compulsory with the application, but it isn't.

Whilst it's not mandatory, it's probably something you SHOULD have, in our opinion. But don’t feel pressured to take what they’re offering at the outset. As with any long-term commitment, shop around for life insurance and get the product that’s right for you. 

This is the bit where we suggest you come to LifeSearch - we’ll do the shopping around/ hard bit for you; match you to products that best fit your circumstances as a whole, not just your need to satisfy a mortgage criteria.
As with mortgages - shop around.

8. Beware of ‘Offers over’

This is more relevant in Scotland, but if a house is listed at ‘offers over £100,000’ for example, and is eventually sold for £110,000, then the extra £10k isn’t mortgageable. It MUST be paid in full, up-front. 

Over the years, many people have been stung by this regional quirk and have had to shell out for a deposit and a lump sum; putting the initial cash outlay through the roof. 

To avoid nasty surprises, sit down and methodically work out a bid based on your available funds. Remember - if you bid £110k on a £100k property, and the second highest bid was £105k, then you have just sacrificed £5k needlessly, when an extra quid would have done it. 

Take advice, watch how the local market performs and add some logic to any guesstimates, balancing what you can pay with what you think a place will ultimately sell for. 
Anything above the quoted price must be paid up-front.

9. Get your legal costs under control

Shelling out for a house deposit is expensive enough, but one thing people often fail to factor in is the cost of the associated legal fees. 

Fees can vary depending on which solicitor you use, but typically come in at around £800 - £1500 per transaction - or more!. 

This mightn’t seem like a lot, but after you pump all your savings into a deposit, you might find yourself struggling to cover the mountain of add-ons that come after. 

As if you didn’t know - lawyers don’t work for free. So make provisions and factor extra fees it into your finances.
Fees will creep north - factor them into your budget.

10. Home Insurance?

Again, not compulsory, but highly, highly beneficial, and most mortgage lenders will insist you get it. 
Home insurance generally covers building and contents insurance. So if your new home gets damaged, inside or out, having insurance in place can be the difference between a quick claim and a monster repair bill. 

According to AXA, the average claim for a burst pipe is £25,000. Twenty five thousand pounds. 

With insurance this isn’t much of a sweat. Without … well, that doesn’t bare thinking about. So get cover sorted early doors. The comparatively minor monthly premiums will pay for themselves if and when you make your first major claim.
Don’t gamble, get home insurance.

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