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Buying a house? A checklist for first-time buyers

Buying a house? A checklist for first-time buyers
Deciding whether to buy your first home has arguably never been a bigger decision.

For the Millennial generation, dubbed Generation Rent in the media, getting that first foot on the property ladder may seem like a distant dream.

And even for those who do feel ready to take the step towards owning a home, there are a multitude of things to consider before taking the plunge.

Buying a house checklist

  *  Check your finances. Ask yourself: Am I ready to buy a house?
  *  Finalise your budget and search area
  *  Start viewing properties
  *  Second / third viewing and make an offer
  *  Offer accepted, so finalise mortgage application
  *  Choose your solicitor
  *  Have a survey done
  *  Set move date and organise removals
  *  Exchange contracts
  *  Completion and move day

1. Take a look at your finances

A property purchase is almost certainly the biggest financial outlay you'll ever make.

So making sure you are perfectly placed to cope with the financial demands owning a property brings is crucial.

And most importantly, this should be done before you take any other steps towards buying a home.

Of course, the best bit about home buying is the 'window shopping'.

We all love a look around beautiful houses, after all.

But the emotional side of property can interfere with the logistical and strategic side. We're sorry to be party poopers but it's true!

Look at it as getting the 'boring' (but hugely important) side of things out of the way first and then you can enjoy the excitement and buzz of a property search.

Your first step should be to look at any debts you have and see if they can be cleared before you apply for a mortgage.

Debt will impact your borrowing ability so it's always better to clear it before starting the application process.

Then check your credit rating. This can be done for free with Experian and Equifax, the two main credit scoring companies.

If you aren't registered on the electoral roll where you live then apply to have this done. This can have a real adverse affect on your credit rating.

And equally as importantly, close down any store or credit cards you aren't using.

However, while avoiding credit like the plague might seem like a good idea, if you have no credit history then lenders have nothing to base their judgement on.

The golden rules are:

  *  Don't apply for lots of credit in a short space of time
  *  If you get rejected for credit, don't apply elsewhere before checking your credit file first
  *  Pay on time, every time and you should be just fine

2. Pinpoint your area and maximum budget

Once you have your personal finances in order, that's the time to establish your borrowing potential with mortgage lenders.

A good starting point can be an online mortgage calculator, which can give you an idea of what you could potentially borrow based on your income.

This can help you focus on areas and properties you can afford, rather than wasting time on postcodes and homes that are out of reach for you financially.

Speak to an independent mortgage broker, who will have access to more than one lender's rates and mortgage products.

Once you're certain of your borrowing potential, it's time to start putting pins in a map - metaphorically at least!

Think about the most important things to you as an individual or family.

Do you need to be close to good schools?

Or perhaps you need to live within a short walk of a train or Underground station for your work commute.

Write a list of 'must haves' and focus your search on areas that fulfil your needs.

But, and this will come up more than once in this piece, always be prepared to compromise!

3. Start viewing properties

See, we promised we'd get to the fun bit as quickly as we could...

Now your finances, borrowing capabilities and area are all in place, it's time to start viewing properties.

While taking a peak inside beautiful homes is great fun, however, it should be done with a focused and strategic approach.

Property searches can go on for a long time for some, and sometimes this is due to a lack of focus.

Only view properties that fulfil your criteria (or have room for compromise) and properties that you can actually afford.

While having a look around a seven-figure pad in South Kensington might be a rather pleasant experience, it's also a waste of time if your budget is a digit short of such a home.

And remember to stay positive at all times. Even if you feel like you are getting nowhere with your search, you will be learning and refining your needs and desires all of the time - even if you don't realise it!

4. Make an offer... but view again first

Once you've found your dream property, it's time to make an offer to secure it.

But before you do, you should always make sure your research on the property is thorough.

Always view a property two or three times before making an offer.

And, if you can, take a friend or family member along for a second opinion.

Check out the heating system, turn all taps on and off and open and close all windows to make sure everything is in working order.

Visit the area the property is in at different times of the day and into the evening, too.

While a road might seem quiet during the day, visiting at 5.30pm on a weekday could reveal it to be a commuter rat run.

Once you're satisfied that the property is right for you, you'll need to decide where to pitch you offer.

Speak to the estate agent and find out the seller's situation. Are they keen to move quickly because they have a new job or have found a new property?

What have other similar properties sold for in the area recently?

The answers to these questions will help you when pondering where to pitch you opening offer.

5. Offer accepted? Now finalise that mortgage

While having your offer accepted can be deemed cause for celebration (and it is), the hard work really does start now.

So, once the Champagne bottle is drained, it's time to get your game face on.

Now you know your purchase price, you can finalise your mortgage application.

If you haven't done so already, this is the time when you'll need to be able to lay your hands on the various pieces of paperwork the mortgage lender will require to assess your application.

That will almost certainly include:

  *  Proof of identification
  *  Proof of address
  *  3-6 months of payslips
  *  3-6 months of bank statements
  *  An employer's P60
  *  2-3 years of accounts if self-employed

6. Choose a solicitor

The solicitor or conveyancer tasked with the legal side of your property purchase has a hugely important role to play.

So, choose wisely.

Speak to family and friends and seek recommendations. Obtain at least three quotes from potential conveyancers before deciding who to use.

The conveyancing process can be time-consuming, though, whoever you use to deal with your purchase.

And that means being patient, but not too patient!

If you are doing your bit by supplying information and answers to queries during the process but still things are moving slowly, you are well within your rights to chase your conveyancer.

Or, if the hold-up is on the seller's side, ask your solicitor to chase them.

One of the biggest delays to property sales in the UK can be with the local authority searches you solicitor must undertake.

But remember: Information from these searches is supplied by the council so if they have a backlog, there's not a huge amount your solicitor can do.

7. Perform a survey

There's no legal requirement for a buyer to have a survey carried out on the property they are buying.

But Ellis & Co always recommends it.

We go back to one of the first things we mentioned in this piece - buying a home is probably the biggest financial outlay you will make in your life.

So, with that in mind, it's a good idea to make sure what you are buying is structurally sound and there are no big problems that could end up costing you even more money.

Remember: A mortgage lender's valuation is not a survey. This is solely for the lender's peace of mind that the property is worth the money they are lending.

8. Set a completion date and arrange removals

Once your survey comes back and you are happy to proceed with the sale as agreed, you should agree a provisional move date with the seller through their estate agent.

When this is in place, it's time to arrange a removal company.

You can perform this task yourself, of course, depending on how many possessions you have.

But often, on what can be a pretty stressful day by anyone's standards, it can be money well spent to bring in a removals firm to take the strain.

As with choosing a solicitor, speak to family and friends to seek recommendations and seek quotes from three or four removals companies.

Most importantly, don't part with any money at this stage.

If your move date changes, it could end up costing you.

9. Exchange of contracts

This is a big moment.

Once the solicitors have completed all the legal work and searches and your mortgage is in place, you can exchange contracts with the seller.

This makes the sale legally binding and you will pay your deposit to your solicitor at the stage.

10. Completion day

This is usually the same day you will move in to your new home.

Your solicitor will transfer the mortgage and your deposit to the relevant parties to pay for the property and cover things like conveyancing costs and stamp duty.

Once all the money is cleared and received, you'll receive the keys to your new home!

If you're thinking about buying your first home get in touch with your local Ellis & Co office for advice or take a look at our available properties.