Stages of a Property Purchase
Under normal circumstances a first property purchase should be considered as a relatively long-term project. Proper planning and research can make all the difference in being able to attain a successful outcome.
Before you start looking for a property, try to save a decent sized deposit. If you are able to put down a deposit of 5 percent (or more) of the purchase price, you will find that the range of mortgage options available to you is much greater (and interest rates lower) than if you need to borrow all of the money. Paying off credit card debts and reducing your regular outgoings is also good strategy, at this stage.
Calculating How Much You Can Afford
Estimate what your monthly outgoings will be after you have purchased your new property. The difference between your net income and your monthly outgoings is what you can afford as your monthly mortgage payment.
Remember, too, that you will have one-off expenses (for example, legal fees, stamp duty, cost of furnishings, etc.) to pay, before you can move into your new home.
Once you have worked out how much you can afford, decide what sort of property you are looking for and which features are essential or desirable:
house, bungalow, flat or studio;
new build or second hand;
number of bedrooms;
garage or parking space;
convenient for bus stop, station;
convenient for local shops, pubs, restaurants;
convenient for local schools, e.g. which catchment area
First Time Buyer Mortgage Options And Making An Offer
After you have calculated exactly what you can afford and are satisfied with your mortgage options, you are in a position to make an offer for your chosen property. Clarify the position regarding which fixtures and fittings are included in the sale and decide whether you need a full survey in addition to the mortgage lender's valuation survey.
After your offer has been accepted, your mortgage application has been approved and your solicitor has carried out all the necessary searches and other legal work, you are then in a position to exchange contracts with the vendor. On exchange of contracts, you pay a deposit (usually 10 percent of the purchase price) and agree a completion date for the purchase. At this stage, you are committed to purchase the property and will suffer financial penalties if you withdraw.
Before completion you need to arrange insurance cover, contact removal companies and make arrangements for moving furniture, etc.
At completion, your solicitor transfers the balance of the purchase price to the vendor and arranges stamp duty payments (if applicable) and ensures that all documentation regarding the transfer, for the Land Registry, has been completed.