Buying your First Home

18 Jul Buying your First Home

Guidelines for First Time Buyers

 If this is the first time you’ve bought a new home, or if you just haven’t done it for a while, the points below give a few useful notes on the buying process. Our aim at Advoco is to make things as straightforward as possible, so if you have any questions about the process then please just call and ask.

Costs

As well as having your deposit for your new purchase, you’ll also need to allow for the following additional costs:

Stamp Duty

0% up to £125,000

2% £125,000 – £250,000

5% £250,000.01 –  £925,000

10% £925,000.01 –  £1,500,000

12% £1,500,000.01 plus

The duty is paid on that portion of the purchase price.

Legal Fees – Will vary enormously from company to company, however aim for round £750 plus VAT for the actual conveyance with about the same again to cover local search fees, land registry fees, environmental searches, bankruptcy searches etc.

We would suggest that you go with a personal recommendation when choosing a solicitor, if you need some help with this, please ask.

Survey/Valuation Fee – All lenders will ask that a valuation is carried out on your new purchase (their security!). There are 3 types of valuation:

Mortgage Valuation

Homebuyers Report

Building Survey

The mortgage valuation is the cheapest, but most basic. Your Advoco adviser will help you to pick the most suitable option. The valuation fee will vary depending on the purchase price and the lender you take the mortgage with.

Arrangement fees – Most lenders will charge an arrangement or booking fee when you take your new mortgage product. Your adviser will help you to choose the most cost effective option and in some cases there may not be one.  In most instances the lender will allow you to add the fee to the loan.

Sales Process

• Seek some advice from a mortgage adviser. They will help you choose a suitable mortgage product and ensure that you are getting a competitive interest rate as well as giving you a good idea of your budget.
• Get an Agreement In Principle. This is basically a credit score with the chosen bank. If you pass they will issue a certificate confirming that, in principle, they are happy to lend you the required funds.
• Start Shopping! This is the best bit, you can then start registering with Estate Agents and looking at property.
• Make an offer. Once you have found a suitable property, make an offer. It’s not usually necessary to go in at the asking price initially, but if you would like some help with negotiations just ask.
• Instruct a Solicitor. Once your offer has been accepted you will need to instruct a solicitor and provide the estate agent with their details together with your Advoco Advisers details.
• Mortgage Application. At this point you will need to tell your adviser that your offer has been accepted and they will help you to complete your application and submit it to the lender.
• Survey/Valuation. As soon as the lender has received your application, in most instances they will instruct the valuation. The valuer will contact the estate agent to get access to the property.
• Mortgage Offer. If the bank are happy with the valuation and all the other information provided, they will issue a mortgage offer and will send a copy to you, your Advoco Adviser and your Solicitor.
• Legal Process. At this point it’s all down to the solicitor and they will negotiate with the vendor and agree a suitable day to complete.This is the sales process in a ‘nutshell’. Your adviser will discuss the process with you in further detail if you require.Most solicitors will want to hold some money on account, so if you are asked for an amount of money once they have been instructed don’t be surprised. It’s often about £250 and is used to cover the local search fee. Together with your regular monthly mortgage payments, there are a few other regular outgoings that you need to take in to consideration when budget planning:

Additional Ongoing Costs

• Council Tax – Varies depending on property location and usually size. The estate agent or local council should be able to advise you on this.
• Service Charges/Ground Rent – If you are buying a flat, it’s imperative you find these out as this can potentially increase your monthly outgoings considerably.
• Life Cover – If you are buying a property with someone else or if you have any dependants it’s important that you have sufficient life cover in place. Your Advoco Adviser can help you with this as well as the mortgage.
• Buildings & Contents Insurance – All lenders will insist you have a buildings insurance policy in place in order to protect their security.       This will need to be in place for exchange of contracts otherwise your solicitor will not proceed.       Advoco can also advise you on this.
• Income Protection – If you are too ill to work or lose your job you need to consider how you will continue to make your mortgage payments, as the government will do nothing for the first 9 months! If you don’t pay the mortgage, then at some point the bank will look to repossess. If you have a policy to cover you for this eventuality then it is one thing less for you to worry about. Your Advoco Adviser will run through this with you at some point during the sales process.

Hopefully this has proved helpful, but if you have any questions at all, we’re only a phone call or email away:

01276 29011

Or

info@advocofinancial.com