Advice for First Time Buyers
Here at Maclaren Warner Solicitors we are specialist in conveyancing and we deal with many transactions for first time buyers.
We understand that buying your first home is a big commitment and we will take the time to ensure that you understand what is happening during the conveyancing process and we will try to keep the legal jargon to a minimum.
As a first time buyer you are in a powerful position when buying a property. Many sellers will value the fact that you are not in a chain and therefore the reduced likelihood of a transaction falling through that this can bring.
If you have already found a property please contact us for a conveyancing quote and we will be happy to answer any questions you may have.
Here are some tips when considering buying a property.
Joint ownership of property by unmarried couples
Due to the large deposits required by most mortgage lenders these days it is becoming more common for family members to help out with deposits. In cases where one party is putting in a larger deposit than the other it is possible to safeguard that deposit in case of a relationship breakup by ring fencing the funds.
This can be done legally by an agreement called a Trust deed or Declaration of trust. This is a document which can be drawn up by a solicitor which states who has contributed what amount to the deposit and how that money will be divided up in the event of the sale of the property.
These documents are tailor made to suit the people involved. It may state a fixed sum to be taken out before the rest of the money is divided, or it may indicate a larger share of ownership in the property so that the person putting in the larger deposit can benefit by any increase in the value of the property.
Please contact us for more information on declarations of trust or for a quotation.
Unless you in the fortunate position of being a cash buyer, you will need a mortgage.
It is generally a good idea to apply for a mortgage before you look for a property. In this way you can find out if you are eligible to be leant the funds that you require.
There is nothing worse than falling in love with a property only to find that no bank will lend you the money. You can apply for a mortgage decision in principle which means that although you may not yet have found a property, the lender will tell you if they are likely to lend you the money based on your income and credit rating, the lender will usually put this in writing for you.
Having a decision in principle will put you in a strong position when making an offer on a property.
Budgeting for expenses
When working out your budget it is important to allow for the following additional expenses.
- Building survey costs (see below for more information)
- Mortgage application fees (these can sometimes be added to the loan so you do not have to pay them upfront).
- Insurance costs (you will need building and contents insurance for your new property).
- Removals costs
- Solicitor’s fees (please contact us for a quotation)
- Stamp duty land tax – this is a tax payable to the Government on properties over a certain value. (Contact us for the current rates).
A building survey is an assessment of the structure of the property for the purposes of securing lending against it.
There are a number of different types of survey available and they vary greatly in what they offer. The type of survey you will choose will depend on a number of factors such as the age and state of the property, the cost of the survey and your attitude to risk.
The surveys available include:
Lenders mortgage survey / Valuation
These are often free or low cost and are carried out by your mortgage lender. This type of survey is generally quite superficial and is only aimed at ensuring that the property is suitable to have lending secured against it. The aim of this type of survey is to protect the bank’s assets and it will generally not be particularly thorough.
This is a more detailed inspection which is aimed at uncovering structural problems with the property or any other areas which may need attention now or in the future.
This is the most thorough type of survey and goes into greater detail in assessing the property. They are sometimes known as a ‘full structural survey’. This type of survey is often carried out on old properties or those which clearly need a lot of work.
Clearly, the more detailed the survey, the greater the cost. The cost does however need to be weighed up against the fact that a more thorough survey may show up a problem which could stop you from wanting to buy the property, thus saving you problems later on. Also, uncovering problems at an early stage may enable you to renegotiate the purchase price down to account for the additional expense of putting right the problem, or making the seller correct the problem before the sale is completed.