Buying a home in Harlow
Mortgage Advice
If you have a regular income and can raise a mortgage, buying a
home may be a good way to resolve your housing need.
The Pros & Cons of home
ownership:
Pros
- Assuming the value of property continues to rise, you end up
with a valuable asset
- Subject to planning/building regulations, you can make
alterations and additions to your home as you choose
Cons
- You lose housing mobility – it generally takes longer to sell
and re-purchase than to give up rented accommodation
- You are responsible for repairs and maintenance costs
Whether you have a mortgage, or rent,
failure to make regular payments can result in you losing your
home.
Things to think
about
If you are thinking of buying, these
are a few of the things you will need to consider:
- Do you have savings to pay the solicitor’s fees/a deposit
etc?
- What things are important to you when choosing where to live –
being near to friends and family, good transport links, close to
amenities or open spaces?
- Do you prefer old or new properties, purpose-built or
conversions, flats or houses? ( Gardens are nice, but they take
time and effort and you’ll need to buy things like lawnmowers
)
- Do you need to be on the ground floor or do you prefer to be
upstairs?
- How many bedrooms do you need?
- Are you planning to buy somewhere that suits you just in the
short-term, or do you want somewhere which will be suitable for
years to come?
Most people have to trade off some of
their preferences when deciding what to buy, so you will have to
decide which things are most important to you.
Before you go ahead with your
purchase, make sure you’ve considered all the costs involved and
are happy that you will still be able to afford to do the other
things which are important to you, such as trips to the cinema,
take-away meals and days out. In addition to your mortgage you will
have to meet other demands on your income:
- Council tax
- Gas & Electricity bills
- Water rates
- Will you need to buy furnishings?
- Will your transport costs increase in your new location?
- Buildings & contents insurance
- Service charges ( on flats )
- Servicing of central heating boilers
- Cost of removals
Don’t forget that, if interest rates
go up, your monthly mortgage payments will increase, so don’t
stretch your resources too far.
Financing your
purchase
Mortgage providers include banks,
building societies and supermarkets – all competing for your
business and offering a wide range of products.
Your starting point may be with the
bank or building society with whom you already have an account; but
they may not be the ones who can offer you the best deal, so make
sure you shop around.
You can get quotes from providers in
person, over the telephone, or on-line. If you have access to a
computer ( don’t forget you can book sessions at local libraries if
you don’t have one at home ) there are a number of sites, such as
http://www.mortgagesorter.co.uk/
providing advice and information to potential borrowers.
If you can’t afford to fund the full
purchase price of a home, you might be able to get on the property
ladder through a part rent/part buy scheme – go to http://www.homebuy.co.uk/ or ‘phone
07002 662846 for more information.
A mortgage broker or independent
financial adviser can help you find the best mortgage, but you will
have to meet his/her charges: if you do use a broker or adviser,
check how independent they are – you need them to recommend what is
best for you, not just the provider they are tied in to.
Your estate agent may also recommend a
mortgage lender, but again, they may be tied in to one or two
providers, so check how independent they are before following any
advice.
Mortgages range from Interest only
through Repayment, Endowment, Fixed Rate, Capped Rate, and
specialist mortgages such as ‘Green’ mortgages, which incorporate
environmental ethics, mortgages for part rent/part buy schemes, and
Islamic mortgages for people whose faith prohibits them from paying
or receiving interest on loans.
The Legal Side
You will also need to instruct a
solicitor or licensed conveyancer to deal with the legal process
involved in the purchase of a property.
Costs do vary, so again, it may pay to
shop around, although you should check what is included in each
quote. You should probably budget for something in the region of
£500-600.
Once you have found the home you want
to purchase, and a price has been agreed ( subject to contract ),
you will need to confirm your mortgage offer and instruct your
solicitor, so it helps to have already sorted these out.
From 1st June 2007 all
sellers will need to provide a Home Information Pack , this will
include an energy performance certificate, an index of contents, a
sale statement, evidence of title, searches* and, where
appropriate, leasehold or commonhold documents*. Items marked * may
not be available when the property is first marketed, but should be
added as soon as acquired.
The pack may also include a Home
Condition Report and other guarantees and warranties, a legal
summary and answers to standard enquiries.
The pack should be provided free (
other than a reasonable charge to cover copying and postage ) and
you, or your solicitor, should check it carefully.
If a Home Condition Report isn’t
included in the pack you should arrange for your own survey. Your
mortgage lender will send a surveyor to carry out a valuation
report before agreeing your mortgage but, in addition to this, you
should consider paying for a homebuyer’s or full structural survey.
The latter is the more expensive option, but will usually be
recommended for older properties as it should ensure you are aware
of any potential problems before making a major financial
commitment.
More information about Home
Information Packs, and the whole process of buying and selling, can
be found at www.direct.gov.uk
Homes & Communities section.
Your solicitor and your seller’s
solicitor will both draw up contracts for the sale and purchase of
the property, and, when these contracts are exchanged, you will
usually have to pay 10% of the purchase price ( either direct, or
via your mortgage lender ) which is non-refundable if you then
decide to pull out.
You should arrange for buildings
insurance cover to start from the date of exchange.
A date for ‘completion’ will be agreed
and this will be the date on which you will be able to move in. The
balance of the sale price will be payable on completion day, via
your mortgage lender.
Moving in
Don’t forget to make arrangements to
move your furniture and belongings. Removal companies can box
everything up for you as well as transporting it, but this will be
an expensive option. Alternatively, companies will provide
transportation only, with you boxing everything up yourself. When
getting quotes, check whether they will provide packing cases, or
whether you will need to supply your own boxes, and check what
level of insurance cover they provide in the event of any
damage.
The cheapest option is to do your own
removals by hiring a van and getting friends and family to help –
but you won’t be covered if anything gets damaged in transit.
Whichever method you choose, start
packing early – it always takes longer than you expect!
For more information about any aspect
of home purchase go to www.direct.gov.uk
For more information about part
rent/part buy schemes go to www.homebuy.co.uk
or call 07002 662846