Guide to buying property: first-time buyer advice
- 6th April 2010
- Property Tips
As the new stamp duty break for first time buyers comes into force we answer some key questions.
What service can I expect from an estate agent?
Estate agents are paid by the seller (vendor) to introduce a buyer to the vendor’s property and oversee the sale by liaising with all parties including solicitors. An estate agent will act in the best interests of the seller, and is not obliged to highlight any negative aspects of the property to you.
It can often be difficult for estate agents to please both buyer and seller, though many experienced agents will do their utmost to assist both parties as fairly as possible.
Professional estate agents will belong to the Ombudsman Scheme for Estate Agents (OEA) and National Association of Estate Agents (NAEA). Member agents must comply with these associations code of conduct or face fines and penalties. Agents must advise the seller of all ‘offers’ they receive from potential buyers.
All reputable estate agents will have a company website featuring all their property for sale. ludlowthompson has reduced some of the legwork involved in a property search. Its 'My Account' is an excellent tool designed to help buyers keep on top of their property search, and in touch with their agents without it being overwhelming.
How to I go about organising a mortgage?
Before work can begin however on finding your first property you will need to secure a 'mortgage in principle.' With competitive mortgages gradually returning to the market for first time buyers you no longer need a large deposit to secure a decent rate. Although the bigger the deposit the cheaper the interest rates available.
Comments from the mortgage market on first-time buyer mortgages -
"Even if they are more expensive, they are still cheap borrowing, says mortgage broker Richard Morea of fee-free broker London & Country: "You can get a 90% loan to value on a two-year fix from Newcastle Building Society at 5.95% or 5.99% at Yorkshire Bank".
Finding an independent mortgage broker who is able to search 'the whole of the market' will increase your options. If you just go to your local bank they will only be able to offer you a restricted range of products. Visit ludlowthompson's Mortgage Advice page for more information.
Many lenders websites offer a quick mortgage calculator. These can be completed in moments to give you a general idea of the level of borrowing you may be eligible for. Lenders will still give a decision based on principle; however you will still have to prove your income once a property has been found to secure the mortgage.
Current mortgage lending trends -
Richard Morea of London and Country brokers comments: "Most of the lenders have moved to affordability models. This takes into account your income, outgoings on credit cards and personal loans and outstanding debt, as well as the number of dependents.
But Morea warns that where a large proportion of income is bonuses it's now not so easy to have this counted: "things have got tougher. Whereas lenders might have taken into account 50% of bonuses, now it might be only 25%."
As a first-time buyer you will be in stiff competition with buy-to-let investors, many of whom will have large cash or mortgage funds instantly to hand. Showing estate agents you have been granted a lenders 'decision in principle' for a mortgage will go some way to convincing them how serious you are.
What are the steps involved in buying property?
- Find a property
- Secure a mortgage
- Appoint a solicitor
- The mortgage company will carry out their valuation on the property
- You instruct a surveyor to do a home buyers report or full survey (you decide)
- The Vendor’s Solicitor supplies draft contract, title deeds on the property to your Solicitor
- Your solicitor arranges for local search and raises any queries with the Vendor's solicitor.
- Once your solicitor is satisfied you proceed to sign contracts and agree a completion date.
- You provide the Vendor with the deposit via your Solicitor
- Signed contracts are sent to you from the Vendor via your Solicitor
- Contracts are exchanged and you arrange buildings and contents insurance
- Completion takes place on agreed date
- Your solicitor pays remainder of purchase price to Vendor's solicitor
- The Vendor’s solicitor confirms completion of sale and arranges for keys to be handed over.
- You move in!
Visit www.ludlowthompson.com for further details of the buying process.
Experienced agents will do their utmost to assist both parties as fairly as possible.
FREE & INSTANT PROPERTY VALUATION
IN JUST 60 SECONDS