5 Must-knows when buying your home
Buying a property can be a daunting process, with so many things to consider. Before you begin the process, here are 5 things you need to know to make the process as smooth as possible.
1. Know your budget
Before you begin your property search, it’s important to know how much you can afford. Mortgage lenders use an affordability calculator to determine how much you can borrow. Fox Davidson are a whole of market mortgage broker and we will find a lender that will hopefully lend you the amount you need. You may find that your eligible to borrow more than you thought! Consider your budget carefully and be sure to include costs such as buildings insurance and mortgage protection.
2. Know your neighbourhood needs
You know what you want to be in your future home, and how much you can afford to pay, but do you know where that home needs to be? Do you need somewhere close to the city, with good transport links, or near highly rated schools? Having a list of must-haves for your new neighbourhood is vital, but it shouldn’t restrict your property search. Doing your research is extremely important but don’t be afraid to expand your search area, you may be surprised at what you might find.
3. Know the costs
The mortgage may be your biggest cost when buying a property, but it is not the only cost. Lenders will typically include an arrangement fee, which varies depending on who you choose to lend with. The fee can often be added to the loan. You will have to pay stamp duty if your property is worth more than £125,000. Then there are solicitor’s fees and you may also need to pay for a property survey. When the property is finally yours, you may need to fork out extra on home improvements and removal fees. This can amount to far more than the advertised property price, so make sure that you take this into consideration. Use our budget planner to work out how much you will need.
4. Know the rates
When choosing the type of mortgage interest rate there are several options available to you:
· A Fixed rate mortgage is just that, a fixed rate of interest over an agreed period – typically 2, 3, 5 or even 10 years. Whilst this could be beneficial in that it ensures your payments will remain the same for an arranged time frame, you may lose out should interest rates drop.
· Tracker rate mortgages are subject to change based on the Bank of England base rate, or the London Inter Bank Offering Rate. Should interests rates drop, so will your payments, but they could also be subject to an interest increase.
· A Variable rate mortgage tracks the lenders standard variable interest rate, and can be set independently. Once again this could be beneficial if the interest rates fall, but problematic if there is an increase.
Before recommending a product to a client Fox Davidson will complete a full fact find to understand your attitude to risk, your budget and your future plans. These details will determine which type of mortgage is best for your situation.
5. Know the process
When a you make an offer on a property and is accepted, you’ll be keen to collect the keys as soon as possible. It can, however, take several months for contracts to be exchanged, and for completion to take place. Fox Davidson will handle the whole process from application to mortgage offer and then right through to completion which is when you get the keys.
Consulting with a professional mortgage broker will save you time and a lot of stress during this process. Fox Davidson are a professional, independent, mortgage broker providing bespoke mortgage advice to clients looking to purchase residential, buy to let & commercial property. If you’re in need of mortgage advice contact our team today.