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Posted by eduard on May 5, 2019
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A Rookies Guide to Home Buying

If you have reached the point of steady income, managed to grow your savings account, and tired of spending money on a house that won’t ever be your home, then it’s time to consider buying your own home.

While the idea of home ownership is commonly intimidating, we have curated this rookie guide so you can take your first-step into home ownership in the smoothest way possible.

1. The Decision 
While a large percentage of the population in the UK are eager to own a home, several factors needs to be considered. The daunting question under the spotlight should be “Can I afford it?”

Signs you can afford it:

  • The more saved, the better. A 20% typical down payment of a home should NOT come out of your emergency fund. The key is to have money still lying in your bank account for a rainy day.
  • Consider the added expenses to home ownership, which include maintenance fees and refurbishing.
  • “Will I get the mortgage I applied for?” is a question that should remain on your mind. A good credit score will not on only determine your mortgage approval but the interest rate.

2. The Budget 
Unforeseen expenses, interest rates, and monthly payments are also subcategories of this section and determine your spend limit.

As a general rule of thumb, you should not spend more than 30% of your monthly income on housing.

3. The Mortgage  
The type of mortgage you decide on has to be right for you and the winner is crucial to your decision’s success. Types of mortgages include repayment mortgages, interest-only mortgage, fixed-rate mortgage, and a tracker mortgage.

4. The Location 
Property markets vary from city to city. Conducting proper research on the location you are going to live in must be thorough. Once you’ve chosen the area you want to be in, you must see as many properties as possible and make a checklist of things to ask. We also have one for you:

Are there any signs of damp?

  • Is there storage space?
  • Does the house face the north or the south?
  • What type of furniture is being left behind?
  • How old is the property? Has it been refurbished recently?
  • Are the pipes insulated? How old is the reservoir tank or boiler?
  • What are the highlights of the surrounding area? Is there nearby public transport? Is there a good school nearby? How is the neighbourhood?

5. The Offer 
Once all these points have been covered, this is your chance to make your offer to be accepted by the seller.

6. Completing the Mortgage 
Once the offer has been approved by the seller, you have to make a trip back to the bank to continue the paper work for the mortgage. Keep in mind there may be a stamp duty to pay. For all stamp duty details, click here: https://www.gov.uk/stamp-duty-land-tax/residential-property-rates

7. The Solicitor 
A solicitor is a legal practitioner who are able to give legal advice and represent their client in court. Since real estate agents cannot partake in any legal actions for their clients, the solicitor will explain all your obligations under the contract. He/she will also advise you on the expenses that may incur when closing, taxes, and legal fees.

8. The Deposit 
A 10% deposit must be paid before exchange of contracts.

9. The Last Mile 
At this point any final negotiations should be closing, the house should be inspected, arrangements for all utilities should be complete, and the solicitor will inform the land registry that the process of ownership transfer is in the process.

10. The Finale 
This is the final stretch, the home-run, and the grand finale. Completion of the payment has been processed and the house is finally your home. On the day of completion, deeds of the property are now under your name. Keep in mind that the seller must leave the property by the time of completion and you can now move in.

 

Congratulations, you are now a home owner!

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