All you need to know when buying property
For first time buyers, purchasing a property, while exciting, is as tough as nails. You will face many hurdles before you can finally call yourself a “homeowner”, so you need to ensure your dream house is worth the cost, which means assessing your finances before making an offer to the seller. If you are borrowing money from a lender, calculate the amount you have saved and how much financial assistance you require in the form of a mortgage loan, and whether you can repay that sum without drowning yourself in debt.
Tips for obtaining a loan
Borrowing money is not as straightforward as procuring a specific amount with the intent to repay it. There are processes in place to ensure that you, the potential buyer, can repay the amount over an agreed-upon time scale every month.
Once you have put in an offer on the house and the seller agrees, you will have to request a loan formally. You will be beset with paperwork and required to fill in an application form that asks a lot of information from you; pertaining to your credit rating, whether or not you pay your bills on time, your employment and income and your current expenses. Even factor like whether or not you are registered to vote might impact whether your loan is approved or not, so it is best that you cross the I’s and dot the tees to avoid disappointment.
At the same time, a full valuation is done on the property. Several factors determine the property’s value; its size, location, surrounds, the state it’s in, i.e. what is the extent of existing damage, and whether or not it is possible to re-sell in the future. The outcome of this inspection, together with you meeting the lender’s strict criterion, determines whether you a. get the loan and b — the amount to which you receive.
The legal process involved
While it is advised that you consult with the legal services of a mortgage solicitor from the start, it is essential you appoint one during conveyancing.
Conveyancing is defined as the legal process of the transfer of ownership. The time it will take to complete this step is between four to 12 weeks, given that no serious complications arise.
During this time, your lawyer conducts what is called a Local Authority Search, the purpose of which is to protect the buyer from unpleasant surprises that may impact their enjoyment of the house in the future. For example, are there plans for development in the future that may obstruct your view? Are there factories that emit harmful pollution nearby? All this is uncovered by your lawyer or conveyancer to detect threats that may have negative implications for you.
Survey and contract and the risks involved
The transfer of ownership is not legally binding until the exchange of contracts, which means the buyer faces potential risk until that happens.
Gazumping and gazanging are terms used in the UK that refer to the seller effectively changing their minds to sell their property to you. Gazumping occurs when the owner rejects your offer for a higher bidder, while gazanging is when the property gets taken off the market entirely due to a change of heart by the owner to stay instead of sell.
Through no fault of their own, the buyer is liable to pay back legal fees and other services rendered. Asking the seller to share the expenses is a possibility, but they are in no way to do so. Buying property is one of the most significant commitments you will make, alongside having children and getting married. You need to consider the following: can you afford the house? Are you a liable candidate for a loan? And have you got the legal expertise necessary to help you gain a clearer understanding of what it is you are getting yourself in