Welcome to my new mini series!
I’m going to start by saying this post is going to be long and definitely more on ‘functional’ side of things you’re likely to read in the blogosphere, however it may also help you immensely when taking those first tentative steps in to a house that you’re considering turning in to your home. It’s a huge commitment!
I decided to write this for a couple of reasons – firstly, because I’ve seen more than a few posts on social media lately from people looking to get their foot on the property ladder and buy their first home, secondly because searching for a new property consumed a large chunk of my life for a good 18 months between last year and the year before sorts something I feel equipped to talk to people about.
I’m by no means a property expert – I’ve bought and sold three houses over the past 13 years and viewed legit close to 100 properties of varying size/price point/ seller in a variety of different financial markets so I’m comfortable in saying I believe I have a good deal of experience. I also spent three years working as a mortgage and insurance adviser, so I have experience from a slightly alternative prospective there too.
Before you start to look
First things first: you need to know how much you’ll be able to borrow. There’s no point in looking for houses you can afford, right?
You’ve got a couple of different options for doing this – speak to a mortgage advisor (face to face or on the phone) or do some research online. Even though I used to work in the business and done this both ways in the past, I’d probably lean towards going, at least in the first instance.
Mortgage calculator tools have significantly developed to provide more and more accurate information, and many times mortgage advisors will use something similar to provide the information you’re looking for.
Internet research can be done at any time of day so you can fit it around work/family/social life easily, and you can look up as much as you want for as long as you want without being constrained to a set appointment time.
I’d suggest starting with your own bank/building society’s website first; they may be able to offer a better deal to you as an existing customer (for example, I get cashback into my current account every month at a higher rate because I have my mortgage there too). Comparison sites are also a really good resource as they have access to a large portion of mortgage providers in the UK, including special deals for first time buyers or larger deposits etc.
One key document you should look to get at the end of this process is an Agreement in Principle (sometimes called a Decision in Principle). This is official confirmation from a mortgage provider that they would be happy to lend you the funds you need, subject to supporting documentation (e.g. Payslips) and valuation of the property. When you starting making appointments to viewing houses, saying you have an AIP shows you’re a serious buyer who can afford the property you’re like to look at. Most of the time now you can get an AIP without having to go through a credit check; this is better as too many credit checks in a short space of time can actually lower your overall borrowing limits when you’re ready to go ahead. For this reason it’s better to do just one before you’re ready to apply for a mortgage, even if you decide not to use this company to go ahead.
Key piece of boring adult advice here: tell the truth and MENTION EVERY SINGLE THING – if you have credit card balances, loans or bad credit these could affect what kind of amount you can borrow, it’s better to know exactly where you stand from the jump than waste time on a situation that end up not being able to move forward.
Let the house hunt begin…
Now you know what you can afford, you can start looking for your dream home, eek! There are three main ways to do this:
Back online you go, same reasons as before – you can look whenever you want and for as long as you want and change parameters of your search. Sites like Rightmove or Zoopla are good because they have almost all estate agencies registered with them and can show all of the houses for sale within your price range (with possibly the odd exception).
Some sites have a function that shows you average house prices in a certain postcode area/street too, so you can get an idea of property prices for the areas your interested in living in.
When clicking on individual property information, pay close attention to two areas:
1. Listing history. This tells you the date the property was put up for sale, if you can see how long it’s been on the market for you’ll be able to get some idea of the level of interest other buyers have shown and therefore what room there is for negotiating on the asking price. If a house has been on the market for a while the sellers may be more open to a deal, if it’s new to market that’s when they usually attract the most attention and sellers aren’t usually as open to this.
2. Properties sold nearby. This tells you the date and value houses on the same street have sold for. This gives you an exact picture of what properties down the street are selling for and therefore what you’ll need to pay to live there. Remember though; some streets have several different style of house, so try and check that the property is similar before comparing.
– Drive bys
You probably have an idea of the area/s or event streets you’re interested in living in, so simply jumping in the car or taking a walk there and looking out for ‘For Sale’ signs could narrow the search pretty easily. Plus, you get to see the area as people are living in it – types of people, parking, local amenities – which will help confirm that it feels like it could make a nice place to live.
– Register with estate agencies
Estate agents typically have mailing lists that will send out an e-mail every time they list a new property that matches your basic criteria (usually area and price) which are worth signing up to alongside the above two options. Some of the more attentive / organised agencies are also happy to give you a call with this information as soon as they take on a new property if you ask them to.
In the next instalment of my ‘Buying a House’ series, I’ll be talking about the next stage of the process – viewing houses. This will include valuable questions to ask and why, as well as things to think about whilst you’re viewing.
Thanks for reading,