House buying

Mbuti

Mbuti

Suspended / Banned
Messages
247
Edit My Images
No
Hi all,

Looking at buying my first house, rented for a while and now in a position with a deposit to buy somewhere. Been to see a few houses and got a few more to see this coming week. I have been to a couple of mortgage appoints to check what I can potentially borrow and to make sure the repayments are affordable (In fact I will be paying nearly 25% less than what it costs me to rent my smaller house than what I am looking at)

Has anyone read a great online article on the processes you go through to buy a house with tips to help?

My family are no help what so ever, and everytime I ask them they just sort of shrug their shoulders at me. :thinking: Surely it is not complicated?
 
When we bought our first house we purchased a couple of the monthly magazines (What Mortgage etc) and it was clearly detailed in those, haven't had to read up for a while so haven't purchased any paper mags and I guess the procedure changes anyway over time, go into Smiths and have a look in those to see if they detail the procedure, if they do then buy one, if not put it back on the shelf :)
Surprised the BS/Bank didn't have some stuff for you.
Matt
 
Mbuti said:
Hi all, Looking at buying my first house, rented for a while and now in a position with a deposit to buy somewhere. Been to see a few houses and got a few more to see this coming week. I have been to a couple of mortgage appoints to check what I can potentially borrow and to make sure the repayments are affordable (In fact I will be paying nearly 25% less than what it costs me to rent my smaller house than what I am looking at) Has anyone read a great online article on the processes you go through to buy a house with tips to help? My family are no help what so ever, and everytime I ask them they just sort of shrug their shoulders at me. :thinking: Surely it is not complicated?
Click to expand...
It's not a difficult process, but it can be a fraught one. Basically you put in an offer, assuming it's accepted, you solicitor and theirs will draw up contracts. Once your mortgage is in place and surveys are complete, the contracts will be exchanged. Only at this point are you both legally obligated to complete the sale. On completion day sold exchange money and you get the keys. That makes it sound very easy, but there's a lot of people on both sides to **** things up. And a lot can go wrong. Best advice is keep talking to the guys who's house you're buying. Can make things go a lot more easily and avoid a lot of pain
 
MatBin said:
When we bought our first house we purchased a couple of the monthly magazines (What Mortgage etc) and it was clearly detailed in those, haven't had to read up for a while so haven't purchased any paper mags and I guess the procedure changes anyway over time, go into Smiths and have a look in those to see if they detail the procedure, if they do then buy one, if not put it back on the shelf :)
Surprised the BS/Bank didn't have some stuff for you.
Matt
Click to expand...

Thanks, will have a look next time I am at the shops.

The bank didn't do step by step just what I needed to do for the bank.
 
boyfalldown said:
It's not a difficult process, but it can be a fraught one. Basically you put in an offer, assuming it's accepted, you solicitor and theirs will draw up contracts. Once your mortgage is in place and surveys are complete, the contracts will be exchanged. Only at this point are you both legally obligated to complete the sale. On completion day sold exchange money and you get the keys. That makes it sound very easy, but there's a lot of people on both sides to **** things up. And a lot can go wrong. Best advice is keep talking to the guys who's house you're buying. Can make things go a lot more easily and avoid a lot of pain
Click to expand...

Thanks, a few people I know have had issues (not well enough to discuss it all).
 
We're in the middle of the process ourselves and it was actually the Solicitor who gave use the most helpful piece of paper with a step by step account of who is responsible for what at each stage. We also used an advisor for our mortgage which cost us £500 - but it is membership for life so we can use it again for any future mortgage negotiations. Worth it for us. She also talked us through the whole process.

To be honest, it's not that complicated and I'm sure there are plenty of helpful online guides / magazines - but when you're talking about the most money you've ever spent, it's nice to have someone who knows what they're talking about assisting you!!

We signed contracts on Friday and hope to exchange / complete in the next few weeks. Does seem a bit sudden after weeks of searches etc and not hearing much but I'm reliably informed that's how it tends to go.

Good luck - hope you find the right place soon :thumbs:
 
Can I be nosy and ask everyone how much deposit (in terms of %) they raised? I can easily afford monthly payments but complete PITA to raise a sufficient deposit for the kind of place I want.
 
omens said:
Can I be nosy and ask everyone how much deposit (in terms of %) they raised? I can easily afford monthly payments but complete PITA to raise a sufficient deposit for the kind of place I want.
Click to expand...

I have raised 10% but I had a huge wedge from redundancy 4 years ago. Which seems to be enough for my own bank.
 
omens said:
Can I be nosy and ask everyone how much deposit (in terms of %) they raised? I can easily afford monthly payments but complete PITA to raise a sufficient deposit for the kind of place I want.
Click to expand...
I understand there is a Govt backed scheme where you need "only" 5% but the bigger the deposit the more likely you are to get a mortgage as it reduces the lenders' risk/exposure to a bad debt.
 
One piece of advice. It's the most expensive thing you will ever buy, another house excepted.

You employ a solicitor to look after your interests, so really, really, do not employ them based on price. I know everyone likes to get a deal (look at all the people that choose an ISP because they can get it cheap with their phone or TV, rather than because they are good at internet service provision to see how price focused rather than quality focused the British public is), but this is something where you really want someone that is good, not an internet conveyancing shed that competes on price.

Get a local firm that has been recommended to you.
 
onomatopoeia said:
Get a local firm that has been recommended to you.
Click to expand...

:plusone:

I was lucky enough not to have a mortgage bu the estate agents kept trying to get me to use their recommended solicitor I refused and went for a local one, best thing I did, they gave a flat rate for the sale and told me up front how much searches etc would cost.
When we hit any problems I had a phone call immediately so things were sorted.
My house buyers used an internet solicitor included in their mortgage package deal and to be honest it was like dealing with one of those call centres that have a set of questions and no clue if you go out side of them:bang:
 
Mbuti said:
Hi all,

Looking at buying my first house, rented for a while and now in a position with a deposit to buy somewhere. Been to see a few houses and got a few more to see this coming week. I have been to a couple of mortgage appoints to check what I can potentially borrow and to make sure the repayments are affordable (In fact I will be paying nearly 25% less than what it costs me to rent my smaller house than what I am looking at)

Has anyone read a great online article on the processes you go through to buy a house with tips to help?

My family are no help what so ever, and everytime I ask them they just sort of shrug their shoulders at me. :thinking: Surely it is not complicated?
Click to expand...

not so much about the buying process, but check what happens to your repayments if interest rates rise. Are they still affordable if rates rise by 1, 2 or 3%?
 
omens said:
Can I be nosy and ask everyone how much deposit (in terms of %) they raised? I can easily afford monthly payments but complete PITA to raise a sufficient deposit for the kind of place I want.
Click to expand...

Is lender's mortgage insurance a thing back at home (in the UK)? Over here, if you have less than 20% you have to pay LMI as well.

We started looking around a bit, but it's a non-starter unless you can find 20% up front.

EDIT: There are discounts on stamp duty (Government taxes, etc) over here if buying your first home, and it's under a certain price. Some of the schemes aren't very well advertised either. Worth looking out if anything similar exists over there.
 
Last edited:
Jayst84 said:
Is lender's mortgage insurance a thing back at home (in the UK)? Over here, if you have less than 20% you have to pay LMI as well.
Click to expand...

No. It used to exist, but as far as I know it was either banned or the industry agreed to stop charging it (or more likely rolled it into the "application fees" and so forth they all charge nowadays).
 
onomatopoeia said:
No. It used to exist, but as far as I know it was either banned or the industry agreed to stop charging it (or more likely rolled it into the "application fees" and so forth they all charge nowadays).
Click to expand...

Fair enough.

It does strike me as a bit daft. Struggling to afford a home? Well, pay this surcharge and.. oh.

Banks over here do what they like though, you will be hard pressed to find an account that doesn't charge you a monthly fee for the privilege of letting them use your money. That account will offer you 0.01% interest as well. Little wonder they are the most profitable banks in the world.
 
You may also wish to look at specialist Conveyancing firms, because without going into to much detail, they are regulated by the Law Society (the same as solicitors), but specialise in residential conveyancing, they do not deal with other aspects of law.

http://www.lawsociety.org.uk/accreditation/specialist-schemes/conveyancing-quality-scheme/

I spent twenty years working in law firms, large and small, and when conveyancing firms arrived, they forced a lot of solicitors to drop their prices in order to compete.
 
onomatopoeia said:
One piece of advice. It's the most expensive thing you will ever buy, another house excepted.

You employ a solicitor to look after your interests, so really, really, do not employ them based on price. I know everyone likes to get a deal (look at all the people that choose an ISP because they can get it cheap with their phone or TV, rather than because they are good at internet service provision to see how price focused rather than quality focused the British public is), but this is something where you really want someone that is good, not an internet conveyancing shed that competes on price.

Get a local firm that has been recommended to you.
Click to expand...

+1!!!

The first property I bought I used a converyancer at the same firm as the couple I was buying from.... There was no chain but it still took 12 weeks.

The second property I bought I used a firm that was recommended to me by a financial advisor. The "fixed" quote jumped up by over £400 (I argued the toss and got most of that removed from the final bill) but ultimately the problem was the office was in the Midlands so we had to rely on Royal Mail for correspondence.

For the house we made an offer on this time last year and moved into in March, we used a local firm that had done the conveyancing for my Nan's recent move. They weren't the cheapest but they were still competative.

Fantastic company to deal with, our conveyancer was more than helpful and when she was off sick her assistant stepped up and kept things moving under very difficult circumstances (my buyer's solicitor was being a complete PITA and the people we were buying from had separated and it was REALLY messy!!

I'd definitely recommend using a local company and preferably one that's been recommended.
 
Thanks for all the tips. I have seen a property I like enough to go back and look over it one more time before putting in a offer. Needs a few things doing so want to go and have another look at them and tot up any costs so that it will be reflected in the offer.
 
Update on this, I had to get a agreement in principle to put an offer in. The offer was not accepted and well they have ideas that the house is worth more than it is.

But at least now I have that in place for offering on any other places I like. Just got to find the right house now.
 
Mbuti said:
Update on this, I had to get a agreement in principle to put an offer in. The offer was not accepted and well they have ideas that the house is worth more than it is.
Click to expand...

I find one of the most useful sites for looking at property to be http://www.mouseprice.com/ - you have to regsiter to get at the cool stuff but it's free and AFAIk they have never sent me spam.

You can look up the history of a property you are interested in. This can tell you useful things like how long it has been on the market and any previous prices (some vendors put the price UP now and again to get it to bump as new on the websites). You can also often see previous prices that the house sold at and comparables for the street/area - these come from the land registry so unlike estate agents' numbers they are accurate ;) Then when you make an offer you can explain how you got there and the benefits to the seller (and estate agent) of accepting it.

I've also found a previous edition of this book useful for covering the basics. It's about 8 quid - which barely covers the petrol and parking to go and see a mortgage advisor so IMO well worth it.
 
Mbuti said:
Update on this, I had to get a agreement in principle to put an offer in. The offer was not accepted and well they have ideas that the house is worth more than it is.

But at least now I have that in place for offering on any other places I like. Just got to find the right house now.
Click to expand...
Good to hear you havent been sucked into the "I must have that place" attitude. Keep that going! Decide on your maximum and dont go over it.
As said earlier, ask yourself if you can afford it if interest rates rise as well. They have been at their lowest for years now, there's only one way they can go and thats up.
 
Jayst84 said:
EDIT: There are discounts on stamp duty (Government taxes, etc) over here if buying your first home, and it's under a certain price. Some of the schemes aren't very well advertised either. Worth looking out if anything similar exists over there.
Click to expand...

If you look hard, you'll find lots of schemes that suggest ways around stamp duty in the UK. AFAIK the only legal one is to buy a house that doesn't attract SDLT (under £125K atm). All the rest are at best courageous and at worst could see the government providing your accommodation for you. See HRMC's cheerful note on the matter - http://www.hmrc.gov.uk/avoidance/spotlights14.htm
 
I've just had a offer excepted myself on my first ever house. Just waiting on the lenders decision so fingers crossed. No chain both sides so i'm hoping to be in for crimbo.
 
OP

Good luck and well done deciding to buy your first house. I paid almost as much for my last camera as I did for our first house, but wouldn't have had it any other way. Eleven houses later and I still prefer buying rather than renting. This will probably be our last........or will it?:D
 
rjbell said:
I've just had a offer excepted myself on my first ever house. Just waiting on the lenders decision so fingers crossed. No chain both sides so i'm hoping to be in for crimbo.
Click to expand...

You'd be amazed just how much house buying can be dragged out by solicitors and mortgage companies even when there is no chain! I'd assume mid January at the earliest.
 
srichards said:
You'd be amazed just how much house buying can be dragged out by solicitors and mortgage companies even when there is no chain! I'd assume mid January at the earliest.
Click to expand...


Agree Suz!

Exactly my experience!
 
JonathanRyan said:
If you look hard, you'll find lots of schemes that suggest ways around stamp duty in the UK. AFAIK the only legal one is to buy a house that doesn't attract SDLT (under £125K atm). All the rest are at best courageous and at worst could see the government providing your accommodation for you. See HRMC's cheerful note on the matter - http://www.hmrc.gov.uk/avoidance/spotlights14.htm
Click to expand...

Yes, to clarify, I wasn't suggesting looking up these dodgy things. The 'scheme' (perhaps a poor choice of word) I was referring to over here is a government initiative. Up until last year we had "First Homeowners' Grants", which was simply tax free cash you could claim on buying your first home. Now the cash is gone, but you can claim a 40% discount on your first home's stamp duty; provided you live in the home for at least 12 months and the total purchase price is $600k or below (which will just about get you a small two bed flat).
 
mortimerhill said:
not so much about the buying process, but check what happens to your repayments if interest rates rise. Are they still affordable if rates rise by 1, 2 or 3%?
Click to expand...

This is the key thing, with rates currently at an all time long, you need to factor affordability for increases in the base rate. They will probably stay low for the short term, but we'll see rises from Q3 2014 I am sure of it. I hope I am wrong, but just cannot see this low rates lasting into the medium term, given the BoE noise of late.
 
sna said:
This is the key thing, with rates currently at an all time long, you need to factor affordability for increases in the base rate. They will probably stay low for the short term, but we'll see rises from Q3 2014 I am sure of it. I hope I am wrong, but just cannot see this low rates lasting into the medium term, given the BoE noise of late.
Click to expand...

Last thing I read was that there will be no rate increase until 2017.... EU rates have just been dropped to 0.25% too.

House prices need to recover to get people out of negative equity and wages need to increase to cover the cost of living increases that have happened. Many people are surviving on half their previous incomes due to losing decent jobs and getting stuck with rubbish ones or part time ones. Until that situation reverses it would be stupid to increase interest rates far as you'd trigger a massive number of repossessions.
 
srichards said:
Last thing I read was that there will be no rate increase until 2017.... EU rates have just been dropped to 0.25% too.

House prices need to recover to get people out of negative equity and wages need to increase to cover the cost of living increases that have happened. Many people are surviving on half their previous incomes due to losing decent jobs and getting stuck with rubbish ones or part time ones. Until that situation reverses it would be stupid to increase interest rates far as you'd trigger a massive number of repossessions.
Click to expand...


I hope your sources are right. Although with unemployment falling faster than had originally been predicted coupled with stronger growth than forecast I think we will see rates increase before 2017. I think I probably have jumped the gun with my profilic growth forecast however :)

Although the point still stands that affordability needs to be factored in given it will more likely be a case of when, rather than if rates rise.
 
Last edited:
Last time they raised rates they did it far too quickly. It often takes 12 months or more for the effect of a rate rise to be noticed fully so rushing them up several points in a few months is a recipe for disaster. If they raise them a little every single year for a longer time it will return rates to something a little more sensible but give people time to find better jobs, cut back or get better mortgage deals.

This carney fellow also said interest rates were a very blunt tool. There are better ways of controlling house price inflation (build more homes!)

Inflation is often fuelled by basic costs such as energy or cost of fuel. If you keep slapping taxes on petrol/diesel all you are doing is driving up inflation. If you cut day to day living costs then inflation falls. Spare money in the system can be controlled with increasing taxation. It's much better than footling about with interest rates.
 
Stupid question but how do you work out how much interest rates might raise by and what effect that has in real terms on the mortgage repayments?

Am trying to work out what would be a worse-case scenario in terms of repayments.
 
omens said:
Stupid question but how do you work out how much interest rates might raise by and what effect that has in real terms on the mortgage repayments?

Am trying to work out what would be a worse-case scenario in terms of repayments.
Click to expand...

It's not stupid. They really should teach this kind of stuff at school (IIRC maths lessons were to do with filling conical baths with the plug out - compound interest would be a lot more fun).

1. How do you work out how much interest rates will rise buy?

A.You guess. Or for a slightly more scientific approach, read all the online money columns and average out their guesses. Scarily that's pretty much it - even the wise men* of the Bank of England don't know and they make it up. The base rate is unlikely to rise more than 1% in the next 2 years but I wouldn't rule it out and banks can of course make up their own rates any time they feel like.

Here's a "plain English" guide to how they decide what to set the rate at http://www.bankofengland.co.uk/publications/Documents/other/monetary/inside_mpc.pdf

But of course the banks can make it up independently (kind of).

2. How do I work out the effect on repayments?

A. For interest only mortgages it's relatively easy, for repayment not so much. The easiest way is to use an online calculator like this one http://www.knowyourmoney.co.uk/mortgage-calculators/how-much-will-it-cost-calculator/ - put in your current rate and it should give you the same repayments as the bank. Now do it again with the rate 1% higher. Or 0.5%, or 23% - whatever your guess from1 is ;)

Remember, your home is at risk etc etc.
-----
* IIRC at least one is a woman.
 
One easy solution is to go for a 5 year fixed rate. If rates do rise you'll have time to work out what to do.
 
srichards said:
One easy solution is to go for a 5 year fixed rate. If rates do rise you'll have time to work out what to do.
Click to expand...

The downside of course is that you pay for certainty. It's hard to compare with so many deal around but generally speaking a 2 year fixed is currently around 2%. I 2 year tracker is a little cheaper (which may give a clue that banks expect rates to rise but probably not since the difference is so small). 5 year fixed rate is somewhere around the 3% mark. So you're paying 50% more for the certainty.
 
Check the reversion rates on those 2 year fixes plus the fees. At the end of the 2 years you'll have the faff of a remortgage if you can get one. A lot of the svrs are 3% minimum above base which is much higher than that fix if you can't switch or there is delay with switching. Many of the cheap fixes have redemption costs and some have penalties outside the fixed term.

The 5 year fix won't cost you 50% more in all probability.
 
When you find the right house DO have a complete survey NOT one just to satisfy the mortgage company, The mortgage one only covers the cost of the loan. The survey should cover from drain to roof and everything inbetween
 
realspeed said:
When you find the right house DO have a complete survey NOT one just to satisfy the mortgage company, The mortgage one only covers the cost of the loan. The survey should cover from drain to roof and everything inbetween
Click to expand...
With emphasis on *should*. What with all the "access was impeded so full inspection could not be carried out" clauses and no comeback if they get it wrong anyway.
 
There are easy things to check:

Check consumer unit in electric cupboard. If it doesn't look under 10 years old budget for some electrical work.
Take some binoculars. Check out roof - look for missing tiles, flashing, uneveness and any signs of a chimney being unsafe. Flat roof areas are a nightmare. They're usually badly insulated and prone to leaks.
Check guttering. Look for staining on walls - signs of leaks
Stick head into loft - check insulation looks good and look for gaps. The laser thermometer things are very useful. Cold spots can mean useless insulation or even signs of damp. Look for cracks in all walls and everywhere you look around.
Feel around windows for draughts.
Check out boiler. Is it a good make and recent? If ch is running listen out for noises. Try out at least one hot tap.
Peer into cupboards around sinks to check plumbing looks ok if it isn't in plain sight.
Check doors fit squarely and that floors are level.
 
You must log in or register to reply here.
Back
Top