First Steps / Things to Do Before Starting your Search
You’ve probably already started looking at properties on the internet or the estate agents window. Before you get your excitement levels up and put some real work into finding a home, there are some elements to get in place. Taking the time to sort out a mortgage offer and find a conveyancing solicitor in advance can seem excessive, but it guarantees you can proceed when you find a home – and that’s the time when you’re nerves will be jangling and you’ll wish everything was in place beforehand.
1. Firstly, decide what you can afford – the previous page on Property Budget Calculation covers this.
2. Choose a Mortgage. If you are borrowing to finance your property purchase you need to decide which Mortgage is best for you. This means a mortgage that offers you the lowest cost while also being as flexible as you need (e.g. if you decide to move or repay early). Often this means a mortgage that fixes the repayment cost for a certain time, to allow you financial certainty in the first few years of owning your new home, which are usually the most expensive (because of new carpets, furniture, decoration and renovations).
We have created a whole page of information on mortgages for you: Click Here for Mortgage information
3. Get a Mortgage Agreement in Principle.
It is important you have an actual agreement from a Bank or Building society that they will lend you a mortgage. Having this before you start your property search helps in these ways:
A) Confirms your budget (what you can spend on finding your new home or investment property). Confirms that you can borrow as much as you would like to (especially for the self employed).
B) Gives Estate Agents and Sellers confidence in you. For desirable properties there can be much competition amongst buyers. How do you stand out above the crowd and get your offer accepted? Answer: appear to be the most credible buyer. ‘Cash buyers’ (those who are paying 100% of the price from their own savings) are deemed the best Buyers – as there is no mortgage company involved, the buyers decision is final – removing uncertainty for the seller. However you can appear as good as a cash buyer if you don’t have to sell a property first, before buying a new home, or if you have your mortgage arranged and agreed in principle.
C) Begins the paperwork and legals for the Mortgage provider – speeding up your mortgage approval once you do find a property and actually need to obtain the mortgage. Having an agreement in principle can reduce the time it takes to process your mortgage by weeks!
D) Lock-in the best deal. Mortgage deals can be like the January sales. Sometimes lenders offer good interest rates or a mortgage without an up-front fee for a limited time only. With interest rates currently very low, it could well be that in the time you are looking for a home the rate may move up during this time – increasing the cost of your mortgage and taking money out of your pocket! When you agree a mortgage offer and obtain a ‘mortgage in principle’ in advance the bank will often guarantee that deal for as much as 6 months. If there is a better deal when it actually comes to buying your property you can always switch to that one. Note of caution: we wouldn’t pay an administration fee to lock in a good deal as you can’t be certain you will buy a property in the time required. Don’t lose administration fees needlessly.
4. Find a Conveyancing Solicitor – you can do this when you find a property, generally it’s a good idea to get on this now and have someone ready when you find your home (if you’re in a competitive market, it’s Much safer to do it now!)… click below for our full page guide on conveyancing solicitors: