YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE
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The Purchase Process
Our guide to purchasing a property
Buying a new home and going through the mortgage process can be a very stressful and bewildering experience. There are so many things to think about and many decisions to make. As experienced mortgage brokers, we can guide you through the entire mortgage process right through to the offer stage and help you pass comfortably through to completion.
There are 10 key steps to help you through your mortgage application:
- Consultation Meeting – we will conduct a fact-finding exercise with you to assess your current financial situation and your needs, this will also help you manage your expectations and will help us find the best mortgage for you.
- Mortgage Protection – we will advise you on the appropriate level of cover in the event of death, critical illness or loss of income to ensure the mortgage is protected.
- Decision in principle - once we have selected the right mortgage for you we will provide you with a key fact illustration and ensure you fully understand all aspects of the mortgage. We will then submit your basic details to the specific lender chosen to see that you meet their lending criteria and relevant credit searches.
- Application – the full mortgage application can now be submitted to the lender.
- Valuation – the lender will check the value of the property you wish to buy. You may want to consider a more in-depth survey of the property to be absolutely sure there are no serious problems that may affect you at a later date.
- Offer – Once the survey or valuations are completed and the lender is satisfied that the application has met their lending terms they will produce you with an offer.
- Legal work – your solicitor will complete the pre-exchange of contracts and decide on a completion date.
- Exchange contracts – you are now legally committed to the house purchase.
- Payment – your deposit is paid and your solicitor will sort all final mortgage arrangements as well as the payments of land registry fees and stamp duty, which are disbursed after completion.
- Completion – funds are transferred and the purchase is completed. You now move in to your new home!
Home buyer’s costs
Stamp duty: UK Stamp Duty Land Tax (SDLT) is a charge on property transactions and came into effect on 1 December 2003. Stamp Duty land tax replaced the old stamp duty system which dated back over 300 years. Stamp duty taxation is limited to the acquisition of property and land situated in the UK, the boundary being the low water mark of every part of the UK which borders the sea. UK Stamp Duty Land Tax (SDLT) is payable on all property purchases over a certain purchase price, and the charge applies to all purchases of houses, flats and other land and buildings. The rate of tax is a percentage of the monitory transaction, the amount being rounded down to the nearest pound. Why not check the stamp duty tax calculator -
Legal fees: Any purchase of property will require a solicitor to complete all the legal work. The price of legal fees will vary from firm to firm but fees are usually calculated on the property’s cost as well as tenure. An average fee for a property worth £250,000 would be about £870. This includes disbursements, land registry and other fees. VAT is chargeable on some of this. We have a number of solicitors we can recommend.
Survey/Valuation fee: All lenders insist that a valuation is carried out on a property. This only confirms the property value. It does not assess any potential problems with the property or need for future repair and maintenance. Valuation fees can vary from £200 - £2,000 depending on the value of the property. Some lenders will offer free valuations as part of the overall mortgage product.
You may wish to appoint your own surveys for a more rigorous inspection of the property and sometimes this would be advisable. There are 3 types
- Home condition survey - the most basic and cheapest, probably best for new build and conventional build.
- Homebuyers report – this provides a thorough survey of both inside and outside of the property and includes a valuation report.
- Building or Structural survey – this is the most comprehensive survey and should always be done on older or non standard properties.
We will always advise on what we think is the best type of survey to take.
Arrangement fees: Most lenders will charge an arrangement fee or booking fee when you apply for a mortgage. These are typically £995 but can be more depending on the lender. Most lenders will allow you to add this to the overall loan, which means you don’t have to pay up front. However, if you do this you will be paying interest on this fee for the term of the mortgage.
If you are a first-time buyer or a home mover contact us now to make an initial telephone or face to face appointment.