What to consider when buying a house
They say one of the most stressful things in a person’s lifetime is buying and selling a house and the consequent move which follows. There is no doubt that buying a house will be one of the biggest and most important purchases of your entire life in which small mistakes can result in big costs.
Consider whether you should be buying at all
Ask yourself, is it the right time for me to buy rather than continuing to rent? As of recent in the UK, house prices have steadily been on the rise and this is adding pressure to anyone trying to buy. This is why a pause in thought is vital to really think if now is your time to make that huge purchase.
As a buyer, you should focus on whether buying is going to realistically be affordable for you, you must take into account the little costs and continuous costs which you do not have to think about when you are simply a tenant. Do not think that jumping straight on the property ladder is the best option just because the British mentality and media are telling you so.
Mortgage & Loans
Part of buying a property is taking out a mortgage. Very few people can straight up buy a property without having to take out a mortgage, so chances are you will have to do so.
You need to uncover how much you can borrow when it comes to a mortgage, this will be based on a variety of different factors.
You can use a Mortgage Deposit Calculator as provided by Money Saving Expert to determine when you will have the correct amount to pay for a deposit on a mortgage. Government schemes such as Help to Buy have actually aided in the improvement of the choices of mortgages for people with 5% to put down. However, borrowers will pay a premium at this level. The deals do become more competitive at 10% or 15%. But for the most decent of rates, you will need around 25% for your deposit.
If you are needed to urgently complete on a property, you may want to explore the option of a bridging loan. A bridging loan is a type of short-term finance which can be used to “bridge the gap” financially when a mortgage might take too long to come through, resulting in losing the desired property. With a bridging loan, you can receive your funds within a matter of days.
Consider boosting your credit score
It would be a mistake to apply for a mortgage before checking out your credit files to see if they are error-free. Having any small mistakes can result in your application being rejected. An example of this may be active accounts which are registered to an old or a wrong address. To avoid heartache, check through your credit files and ensure that any active accounts are registered to your current address.
Check out the potential neighbourhood
No matter how lovely the home is itself, the area in which it is located is essential to your happiness when living there. Before completing on a property or even putting an offer in, you should check out the local area to make sure it is the type of place that you would want to live in.
Visit local parks, pubs and shops to see what the neighbourhood is like at different times of the day. Are the facilities good and well-maintained, or are they covered in graffiti and look half-abandoned?
Consider making a checklist of things within the house and in the neighbourhood, that may be deal breakers. This could be damp in the home or no train station in the area which may be needed for ease of travel or a commute.
It may be a nice idea to chat to a few locals in the places you visit and ask about life in the area. Whilst you are visiting, why not take photos and use them for reference when making your decision. This goes for the local area as well as the actual property, but do get permission from the estate agent.