Getting onto the Property Ladder and buying your first home is one of the biggest financial commitments any person makes in their lifetime so you need to know the best way of doing this and avoid any pitfalls with all the array of different mortgages and loans that are available today so here is some information and advice on making that all important first home purchase in Stratford upon Avon.
Know your Spending Limit.
First of all you need to know how much you can comfortably afford to spend when buying your first home this all depends on how much you can borrow. The rules on how much you can borrow is normally 3.5 times the main earner’s income this is before tax plus 1x any second earner’s income or 2.5 times their combined incomes if this is larger. But in light of the Property boom during 2006/2007 many lenders just threw out these rules in favour of what became known as "affordability" this took into account other costs such as debts or dependants taking into account such factors as say Childless couples or people in professional occupations who lenders consider to have more earning power in the future.
But as we know the Property boom has now receded and house prices in general have fallen or levelled out so the so called affordability factor has now been trimmed back by lenders as borrowing has now become much tighter as with size of deposit required and a more detailed look into the credit history of potential first time buyers. But nevertheless lenders still use the affordability factor and in general will go as high as 4x individual or even joint salary.
But never overstretch yourself by taking this a solid rule of thumb when it comes to borrowing what you need to remember is that INTEREST RATES can and will always go up so just because the base rate is at 0.5% don’t assume anything.
Working Out the Cost.
Buying your First Home will in the end cost you more than you think this respectively varies on where you live one of the costs that has risen is the cost of mortgage arrangement fees. In some instances lenders will add up to £1000 in fees alone inclusive of any deals you may also be offered to add this fee to your loan but be wary of doing this as you will end up paying much more than the upfront fee over the course of your mortgage. Other respective costs that have to be taken into consideration are Buildings Insurance you will need Life Insurance if the mortgage is in joint names or you have dependants plus the usual utility bills such as Gas and Electric and a major one Council Tax(dependant on which Tax Band your home falls into) Water rates and maybe even service charges.
Finding your Ideal Home.
Once you have found your ideal home always make a second viewing on this visit dont take too much notice about the decorative appearance of the home or the furnishings these are only cosmetic what you need to look at in more detail are such things as what sort of condition is the bathroom in and also the kitchen replacing a bathroom and getting a new kitchen can cost thousands of pounds plus does the property have central heating also be aware of a house with limited furniture this can be very deceptive by making the rooms look larger than they really are.
Don’t be afraid to ask the owner how much Council Tax they pay and if the property has any service charges on top of this all homes require a home information pack which contain details such as Local Authority searches, Title Deeds and any Leasehold details if this applies.
Make Your Offer.
As a guide always make your offer in a way of where you want to finish before you start (ie your maximum amount you can comfortably afford) so if the house you want to buy is selling at a price of £150,000 and you know you can afford £140,000 make an offer of £130,000.Then if your offer is not accepted add £1000 at a time, but if you think is house is of interest to several buyers or its a steal then you need to act fast.
In the event the seller accepts your offer then contact the seller and ask him or her to take the property off the market this stops gazumping by other buyers who may try to put in a higher offer. Another important factor when a deal has been done on the price is getting a Survey done on the property if the seller does not agree to this then walk away don’t let your emotions get in the way their are several horror stories of buyers ending up with a property with hidden structural defects which could have been detected if a Survey had been carried out.
Getting a Mortgage
Their are several types of Mortgages and loans out there today from the high street to online deals and so on but beware of estate agents who offer you Financial Services or mortgage deals they are very unlikely to get you a good deal. You can in some cases arrange your mortgage over the phone therefore getting that all important first step towards your first home, you can always supply details of your bank and employer at a later date. On average most lenders will charge about £500 for setting up a mortgage.
Final Steps to Buying your New Home.
As with all house purchases you will need to find a Solicitor for your home in Stratford upon Avon, your Solicitor will carry out the Conveyance for your prospective home this means checking all the legal aspects of the sale, making sure that there are no land disputes, and that the seller has the legal right to sell the property. Then their is the Survey as mentioned before starting at the cheapest which is a mortgage valuation type at £150 all this does is say that if you fail to keep up the payments on the property the lender has the right to sell the property and get its money back this survey wont spot any major faults with the house.
The Homebuyer Survey on the other hand can cost between £300 to £400 this should pick up any defects with the property if it has any, the last and most expensive one is the Full Building Survey this can cost anything from £400 to £1000 and if this picks up any major problems with the property you maybe able to renegotiate the price of the property. This type of survey is recommended for older properties but in the end it’s your decision to make on which type you decide to pick.
So now you have some pointers on Buying Your First Home.
Find and Sell your House In Stratford upon Avon.
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