New build homes are an excellent choice for first time buyers. However, experts including estate agents in St Albans feel that there are several common issues that many first-time home buyers are unaware of when purchasing a new house. Here are some of our best tips for buying a new house.
Choose an affordable home
Before you start looking for a home, figure out how much you can afford to spend on a house or an apartment, as well as your monthly mortgage payments.
Consider the costs.
Consider how you’ll deal if your income drops or interest rates rise when evaluating whether a house is affordable for you, and don’t overextend yourself. If you are looking for houses for sale in St Albans, remember that your money must cover not just the deposit, but also costs such as mortgage fees (which normally range from £0-£2,000) and Stamp Duty.
Selecting the Best Mortgage
It’s never too early to start thinking about applying for a mortgage, as the process might be lengthy. An Independent Financial Adviser (IFA), mortgage broker, or lender can help you secure a mortgage. If accepted, you’ll be given a mortgage ‘in principle’ once you’ve discovered a mortgage plan you like. This informs you of the amount of money the lender is likely to offer as well as the interest rate you’ll have to pay. To reserve the mortgage product you desire, you may have to pay a booking fee. £99-£250 is a typical price range.
Look over your credit report.
Check your credit report for any inaccuracies and to obtain an idea of your credit score before applying for a mortgage. It will be taken into account by lenders while evaluating your application.
Make an offer
After you’ve discovered a home you want, you’ll need to make an offer, which you’ll normally do through an estate agency. The legal work pertaining to the property will be handled by a solicitor or conveyancer. They’ll tell you how much you’ll have to spend and may require a deposit up ahead – normally 10% of the total charge. £500-£1,500 + 20% VAT is a typical price range.
Your solicitor or conveyancer sends searches to the local council to determine whether the property’s value is affected by any planning or local issues. The average cost is between £250 and £300.
The lender conducts this survey to ensure that the property is worth the amount you’re paying before approving the loan. It is not a comprehensive survey, and it will not identify all necessary repairs or maintenance. Typical costs range from £250 to £1,500, depending on the property’s valuation. Depending on the sort of mortgage product you choose, certain lenders may not charge you for this.
Inspection of the property
Because it will be your home, it is in your best interests to pay for a thorough survey now. It can also aid in renegotiation of the price. For example, if the survey indicates that the home has a problem that will cost £5,000 to fix, you could ask the seller to reduce the price by that amount.
There are a variety of survey kinds to choose from:
RICS condition report — the simplest and cheapest ‘traffic light’ survey. It’s best for new construction and well-maintained older homes. This survey does not offer any advise or valuation. The price is £300.
RICS homebuyer report – suited for traditional homes in good condition. This is a far more thorough examination of a property’s interior and exterior. It also offers a cost estimate. The average cost is around £400.
The most extensive survey is a building or structural survey, which is appropriate for all residential properties. It’s especially useful for older homes or those in need of maintenance. £600+ is a typical cost. Complete the offer and the mortgage. After you’ve completed the survey, you may wish to go back and renegotiate the price of your new home.
This is due to two factors:
Your inspection may reveal property flaws that will be costly to resolve. You can use this information to negotiate a cheaper price because the lender may value the property at a lesser value, leaving you with a shortfall. This means you won’t be able to match the asking price or the offer you had in mind. This is usually the most stressful part of the procedure. Delays and issues can occur for a variety of causes, including:
The seller pulling the property from the market the seller accepting a better offer from another bidder. When things go awry, communication is crucial. When issues arise, it’s important to keep in touch with the seller through your solicitor and estate agent. Keeping the lines of communication open is frequently enough to save the situation.
Completion of your mortgage
If everything went as planned, contact your lender or mortgage adviser to go on. A cost, known as an arrangement fee, is frequently charged to set up a mortgage.
You should receive the contract to sign and finish the sale if there are no issues or delays. Check the contract with your lawyer before signing it to ensure that all of the details are proper.
Make sure you’re satisfied with what the sellers agreed to leave in the house and that all of your questions have been answered. You and the seller are both committed to the sale at this point. You may also be asked to pay a holding deposit – usually between £500 and £1000 – to demonstrate your interest. After you’ve exchanged contracts, you’ll need to get buildings insurance to protect the property’s structure.