Buying a property
We are often informed by the media that buying property, be it a home or investment property to let out, is one of the biggest financial commitments you will undertake throughout your life. On top of this the property buying process can be complicated and sometimes daunting, especially for first time buyers.
Usually, you will be looking to part finance the purchase by borrowing money. We all know this as the mortgage.
The reality is that it is simply a loan secured on a house and should be treated that way. At any one time there are over 7,000 mortgage loans available, all offering something slightly different to each other.
You will also need to decide how to structure your repayments to the lender, be it on a Capital Repayment or Interest Only basis. The latter would require a savings vehicle to repay the lender and this would usually be an endowment, pension or Individual Savings Account. You will also need to decide the type of interest rate to use. This may be variable, fixed, capped, collared or discount, to name a few.
- Over how many years should I set up my mortgage?
- Are there any other costs, such as arrangement fees?
- Am I tied in with my lender for a period of time?
- Should I opt for a traditional loan, where I pay a set amount each month and the interest is calculated annually or should I consider a daily interest mortgage?
- How much will my solicitor cost to handle the conveyancing work?
- Should I choose a basic valuation report for the property or a full structural report?
- Check with your adviser the maximum you will be able to borrow and the costs involved. Assuming you have no problems with your credit history we should be able to find a suitable loan for you.
At Essential Money we have a fully qualified and experienced Mortgage Associate - who researches all mortgages for our clients. We use mortgage-sourcing software to help our clients find the loan that is most suitable for their circumstances. The system is updated daily, therefore we are always up to date with new products and information. This is crucial, as competition in the mortgage market has brought with it increased product innovation and lenders are keen to attract your business. By finding the right loan for you we aim to save you money and take the hassle away from you.
- Start house hunting
- Make an offer
- Apply for mortgage and any necessary life assurance/critical illness cover. At this stage you are likely to need Payslips, P60s, Bank statements, ID proof, & cheque for the valuation.
- Find a solicitor
- The lender arranges the survey
- Once the lender is satisfied with the valuation, references and credit searches, they will issue a mortgage offer. At this point you are guaranteed the mortgage and you are well on the way to purchasing the property.
- Pay initial fees to your solicitor to cover search costs (takes up to 4 weeks)
- Exchange contracts, once both solicitors (vendor's & buyer's) have agreed on all the details. At this point you are legally bound to purchase the property.
- Completion. This is when you're handed the keys to the property and can move in. It's typically up to 2 weeks after exchange date - but can be on the same day.
Click here to download useful guide to the buying property process.
Your home is at risk if you do not keep up repayments on a mortgage or other loan secured on it. Written details on request.