Diary of a First Time Buyer (Part two)
Posted on 24 June 2019
Update from last week’s blog: we saw a house we liked, made a reduced offer (by £7000) which was accepted! We now have to get a mortgage…
To broker or not to broker
We spoke to work colleagues, friends, and family and all had different ideas and advice on whether a broker should be employed to organise the mortgage for us. The benefit of using a broker is that they have access to information you may not and are experts in what they do. They will also be able to secure a rate that you are happy with.
There are a number of brokers out there and - this was something that was new to us- many estate agents have an in-house broker, who you can talk to. My advice would be to meet with them to discuss your options. They will ask you some initial questions regarding your finances so that they can assess what you can afford to borrow. The first meeting is usually free of charge. When you apply for a mortgage, lenders calculate how much they’ll lend based on both your income and your outgoings – so the more you’re committed to spend each month, the less you can borrow. Under mortgage rules which came into effect in April 2014, lenders must now obey strict guidelines to check whether a borrower can afford their mortgage repayments, not just at current interest rates, but also if interest rates shot up to 6-7%! Expect to be upfront about outgoings such as gym membership, the weekly shop, childcare, car costs etc.
It is important to remember that the more you borrow the higher your monthly repayments will be. It’s no good purchasing a dream home if that dream is going to turn into a nightmare because you’re left with little money after the monthly repayment. A broker will help you confront the reality of what you can afford. Even if you choose to arrange your own mortgage it is still good to meet with a broker to get their input, so that you can be steered towards reality.
After our initial meeting and submission of documents that included payslips, ID verification, P60’s and proof of address we found a mortgage that suited us. We decided to go with a two-year fixed interest rate. The fixed rate allowed us to know exactly what our monthly repayments would be. By choosing not to go with an interest only mortgage it meant we had the satisfaction of knowing we were not only paying the interest but also the repayments, meaning that each month we were getting closer to paying off our mortgage.
Like all the other stages of buying a house, it was about research – and it will be for you too. There are so many different options and deals when it comes to mortgages (everyone seems to be after your custom as a first time buyer!) that it is advisable to find out as much as possible across a range of different sources - brokers, mortgage advisors, online sites – so as to arrive at one which one works best for you and your circumstances. A really trustworthy website is Martin Lewis’ https://www.moneysavingexpert.com, but there are others. Shop around!
Solicitors – who to choose?
Choosing a solicitor was easy for us. I work in the marketing department at Pardoes so have a relationship with the team there. Of course, they were delighted to help us complete the legal transaction on the purchase of our first home. But the same rule still applies. Choose a solicitor with a good local reputation. They will be the people who you have most contact with as you enter into the purchase stage, so it’s important to have solicitor who you feel you can trust to act in your best interests. Respect their expertise. They will know everything there is to know about property transactions. And, if they’re good, make you feel like a valued customer. At Pardoes, the Residential team are not only experts but also really care about their customers and want to help them. Take it from me. I know this from professional and personal experience.
Solicitors and Surveys
We had now instructed our solicitors (Pardoes obviously!) and looked at getting a Chartered Surveyor to view the property. After speaking with Emma from Pardoes she advised that it would be wise to have a full structural survey completed on the property because it was 150 years old. I had looked online at local surveyors and choose to go with a smaller local company. I felt they would have the time to dedicate themselves to assess our property and be invested in getting the right outcome. The downside of a structural survey is that it is so thorough that any underlying issue or defects will be uncovered. Your dream home may end up being not quite the dream home you imagined – but that reality check needs to be done. Just like your research into the neighbourhood, you need to ‘research’ the house you are buying and find out everything you can.
Of course, it’s up to you as to what survey you would like. I suggest discussing your survey choice with your surveyor and solicitor to get their advice. That’s what they’re there for – and they are the experts. And, as you will find out in the next stage of this blog, we were very glad that we did…
Survey shock of horrors
With everything in hand, we had flown to Australia for my sister’s wedding. I remember the moment with distinct clarity. We were sitting on the balcony in the glorious Sydney sunshine, sipping cocktails and showing my sister photos of our new house (most importantly, which room would be hers when she came to visit). Then the email came – to phone our surveyor as soon as possible. We did. The survey had shown the property to be full of flaws. The most immediate and worrying being the deterioration of the roof, the rendering on the walls, the high levels of damp due to recent flooding of the property and a long list of defects. Almost at the same time, we received an email from Emma stating that the initial searches conducted on the property had revealed there was a public right of way right through our garden. Sigh. No wonder we had managed to knock £7000 off the asking price. There was no other option but to pull out of the property and, at that immediate moment, move on from cocktails to gin...
But the gloom we felt soon became replaced with relief and gratitude. Our surveyor had done exactly what he was paid to do, and saved us from buying a property full of defects.
This would be a good time to end this blog: by leaving you with a cliff-hanger. Check back in next week to find out whether we would ever find our dream home….
Posted in: Buying & Selling Your Home