THE COMPLETE GUIDE TO BUYING A HOME
by Patrick Barnes (March 2005)

Buying a home and taking on a mortgage is probably the biggest financial decision you'll ever make, so it's vitally important that you're armed with the facts and go into the process with your eyes open. Admittedly, it's a complicated system with plenty of pitfalls, but if you're shelling out money on rent it's a much more sensible use for your money. Of course, you don't go shopping without looking to see how much money you can spend first, and the same applies to buying your first house or flat.

Before you even look at any property pay a visit to a couple of mortgage providers and brokers. If you're on your own, most lenders will let you have a mortgage roughly three and a half times your annual salary and if you're buying as a couple there are a number of different combinations. The trick is to find the one that suits you best. Since most lenders will only let you borrow 95 per cent of the value of a property, you'll also have to find a deposit - and you'll need up to £1,000 to cover other expenses like lawyers' and surveyors' fees.

If you haven't got enough saved, some lenders are offering mortgages of 100 per cent or more, but be careful of these as you may be tempted to over-stretch yourself. Many mortgages also include arrangement fees and can hold a few surprises in the small print - so shop around before deciding on a loan. It's a good idea to get an 'in-principle' decision from the lender, in case of any problems with your credit rating.

Once you know what you can spend it's time to start house hunting. You can do this over the internet, by registering with several estate agents or even walking or driving around areas you're interested in, looking for estate agents' signs - it's up to you.

Estate agents act on behalf of their clients to provide information to prospective buyers and arrange viewings on appointment. Don't just arrange to view one property, look at several so you can judge what you'll get for your money, and what best fits your requirements. Inspect each property closely with a critical eye.

Don't forget to ask the sellers some probing questions, such as why they are selling, how long they have lived there, have they had problems with the property, what work they have had done to it, are there any problems with the neighbours.

The law of 'buyer beware' applies to house sales - so if you don't ask, they don't have to tell you. Asking the sellers if they already have somewhere to move to can save a lot of time and trouble - especially if they are just testing the market and don't intend to move.

When you find the home for you, the next step is to put in an offer on it. Remember that the price the property is advertised as is only the asking price and you should make an offer, subject to survey and contract, based on the state of the market and your knowledge. Bargaining face-to-face with the seller is a useful tactic.
If you're a first-time buyer tell the seller, as this will add weight to your offer. The offer may vary and you can also pull out of the sale if the survey or searches uncover problems.

Once your offer has been accepted, you must get the process moving by putting in your mortgage application and hiring a solicitor to deal with conveyancing. Although the mortgage lender will carry out its own valuation survey on the property, this is only very basic so it's a good idea to hire your own surveyor to carry out a homebuyer survey as well.

In the case of older or unusual properties, it's a good idea to get a full structural survey instead, which gives you a comprehensive report. This part of the process can be the most stressful, as it can be hit by delays and problems. And if the survey turns up previously unknown problems with the house, don't be afraid to renegotiate the price.

Assuming all goes well, you'll be able to exchange contracts after a few weeks, after which point there is no backing out of the purchase. At this stage you become responsible for the property, and your mortgage lender will insist on you insuring the building and, if you have dependants, insuring your life to cover the mortgage.
Completion usually takes place a few days or weeks after this and you'll be able to move into your new home.

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