Funding the Purchase of Your Home
You will need to secure a mortgage to fund the purchase of your home unless you’re fortunate enough to be a cash buyer.
Work Out Your Mortgage Repayments
Use our handy mortgage payment calculator to gain an understanding of what you’re likely to pay out each month. Doing so will help you to calculate how much you are able to afford at any given interest rate. Perhaps most importantly, however, our calculator also allows you to see what an interest rate rise would do to your payments.
Determine Your Affordability
Mortgage providers use your annual earnings to determine what you can afford. Typically speaking, you’re looking at being able to borrow 3x your salary, however, if you’re making a joint application with your partner, you’ll be able to borrow more. In addition, you’ll need to pay your deposit, which is likely to be 10-20% of the total purchase price, depending on the lender.
An ‘Agreement in Principle’
Once you have made your decision about which lender to go with, you’ll need to make a mortgage application and obtain what’s known as ‘an agreement in principle’. This illustrates to both sellers and estate agents alike that you’re a serious home-buyer. At this point, you can start looking for the home of your dreams!
Sticking to Your Budget
It’s really important to factor in all associated costs that you’re likely to encounter during your house purchase, which includes things like ongoing maintenance. Interest rates go up and down, so it’s vital that you don’t overstretch yourself and have a plan in place if your mortgage payments should increase.
If this is your first foray into the mortgage market and you’re not sure about how to go about comparing the various deals that exist, we recommend that you get professional advice from an independent ‘whole of market’ financial advisor.
Additional Conveyancing Costs
Home buyers also need to take account of all additional conveyancing costs for things like stamp duty, surveys and valuations. Fail to do this and you could end up with a shortfall in your affordability calculations.
Energy Certification
When looking at a potential property, its energy performance will have a bearing on how much your monthly utility bills will be. If the home you’re looking to buy has an energy certificate, it will tell you everything you need to know and help you make a considered decision.
Building Surveys
After you’ve identified the property you want to buy and obtained your agreement in principle, it’s time to get a survey arranged. Your mortgage lender will require you to do so and there are various different types to choose from. The right one for you will depend on the condition and the age of the property in question. If you need to locate a chartered surveyor, we recommend visiting the website of the Royal Institute of Chartered Surveyors (RICs) where you can also find expert advice on building surveys.
Appointing a Professional Conveyancer or Solicitor
There’s lots of paperwork involved when buying a property, which is why you’re going to need the help of a conveyancer or a solicitor. Generally speaking, the cost of conveyancing is based on work undertaken or as part of fixed-fee arrangement. We have a close relationship with the most trusted local conveyancers that we can put you in touch with.
Once appointed, your solicitor or conveyancer will prepare the contracts for exchange and liaise with the seller throughout contract negotiation proceedings. Once all parties are satisfied and your funding is in place, you’ll be able to exchange contracts with the seller during which you may be required to pay a 10% deposit. Your purchase will then be completed once the rest of the funds are transferred and all that’s left is to pick up your keys from the estate agents and get on with the job of moving in!
