Top 5 things you need to know about buying a house

11th July 2021

Buying a house is one of the biggest decisions you will make in your life. It’s more than just taking out a mortgage and signing on the dotted line. There are so many factors that go into purchasing property, such as your budget and costs, property reports, location, and financing, it can be exciting and overwhelming all at once.

In this post we will take an overview of the top 5 things you need to know about buying a house.

  1. Costs

These are just some of the initial expenses you will have to make upon purchase of a property, you need to ensure you can pay these and budget accordingly:

  • Stamp Duty Land Tax – This is a tax imposed on the purchase of residential property, and it can make up a big chunk of your total budget. How much it is depends on the purchase price of your property. You can calculate the amount you will need to pay by using HMRC Website. There is currently no SDLT payable on a first time purchase up to a value of £300,000. The amount of SDLT payable otherwise will depend on the value of the property, whether or not it is a second property and, if a new leasehold property, the ground rent.
  • Legal Fees – You will instruct a Solicitor, Legal Executive or Licensed Conveyancer to do the legal work on your behalf. You should ask for an estimate before they start work on your purchase, which will include their fees and all the other expenses you need to budget for in relation to the legal process. How much the fees are will depend on how straightforward the transaction is, whether the property is leasehold, freehold or a Help to Buy Scheme purchase, etc.
  • Deposit – This will be the amount of money you pay towards the price of your home, normally it has to be at least 10% of the purchase price, it is often higher but it will depend on what mortgage product you are using. The Government have recently launched a new mortgage guarantee scheme to encourage mortgage lenders to offer 95% mortgages and this is due to run until December 2022.
  • Valuation fee – any mortgage lender will require you to have a valuation done of the property you are purchasing.
  • Surveyors fee – It’s important to have the property surveyed before you purchase it. This is an inspection of what work needs to be carried out on the house, and will include checking for structural damage or anything that may affect its value such as damp problems which could lead to mould etc.  There are different levels of surveys that can be done.
  • Mortgage costs – if you are purchasing a property you may need to apply for a mortgage, the lender will work with you to establish how much you can afford to borrow. There are often fees such as mortgage valuation and arrangement fees. Check what these are with the mortgage company.
  • Moving Costs – there may be a lot of costs associated with moving your belongings into the property and it’s important to budget for this beforehand so you know how much you need and when payments will have to be made.
  1. Shop around for your mortgage

It’s important to shop around for a mortgage as different companies offer different rates and terms. It pays to compare mortgages rather than relying on just one company, some will give you an online quote whilst others require that you visit a branch in person first. A mortgage broker may also be worth considering to assist you with this, but do check what their fees are.

  1. Don’t rush into any big decisions

Take your time and view lots of different properties, buying a home is likely to be the biggest investment you will ever make and so you want to get it right! Ask the estate agent as many questions as you want and don’t be shy. Ask for second or third viewing if you need them. Look at the property and grounds thoroughly. It’s worth taking a good look around before you make any offers. Buyers are often so busy looking for faults in potential properties that they can miss noticing what’s really important, like how light it is or how much garden space there is. If the owners allow consider taking some photos when you view so you can look over them later, it’s easy to forget details in the moment. Be realistic about what you can afford to spend on doing up a property if a project seems appealing to you!

  1. Check out the neighbourhood

Do you like the area? Are the facilities what you need? What schools are there? How good are the transport links?  What’s the crime rate? Can you see yourself settling down and living there?

Spend some time walking around the neighbourhood, do some shopping if there are shops – try as much of it out as you can, and do it at different times of the day and/or night. Do some research on the area, you may even be able to chat to some neighbours!

A new home is likely to be somewhere you will live for a long time. It should be somewhere you feel safe and happy in the long term. If it’s not the right place to live then don’t buy.

  1. Make a list

Making lists of what you need to do and how far down the line you are will help keep your mind on track. Remember, even though it is exciting there’s still work to be done!

I hope you found this blog post informative and helpful. It’s important to remember that there are many factors when purchasing a property, so it can be difficult to make the right decision with limited information. If you need help or have any questions about what we mentioned here today, don’t hesitate to contact us for more information or a quote, we have offices across Mid and East Devon and can make appointments that are convenient to you.

Telephone:  01392 424242