by Mark Johnston
Buying a house can be a stressful experience so it pays to be armed with the very best and latest information to make it as smooth a process as possible.
Apart from the initial challenge of finding a lender willing to part with their money and assist you with a loan, there are also a myriad of potential charges and fees to account for and some are buried deep in the small print.
The first thing to do consider before looking for a house or applying for a loan / mortgage is to build up a reliable team behind you. It is not cheap and having the right expertise on your side will dramatically reduce costs and ensure you have an effective and efficient approach. Include a mortgage specialist, real estate agent (chose wisely), home inspector and lawyer. Don’t forget to ask your friends and family for referrals and do your own research, no cowboys needed when your money is on the line.
Next, you need to know your budget and what how much you can afford and for what. Have a conversation with a financial adviser, found in any local trusted and capital rich bank or building society. Only you and your lender (mortgage provider) can properly determine what you can afford so don’t overstate anything as this may come back to haunt you.
Once you have a team and a clear idea on your finance situation, you can start to find out what mortgage offers are out in the market currently and which are best for you depending on your financial situation, income and outgoings. Once you know what you can afford, narrow down the different mortgage deals down to a few and seek advice from friends or family on what would be best for you. For example, if you want to only pay a set amount every month, probably the fixed rate options are for you. But if you are able to vary your payments then a tracker (tracking Bank of England base rate) option may be better. These are the basics so research is important.
From there, you know what rates and deals are best for you and you can start the exciting part of the journey; find a house! But don’t skip out on all the suggested inspections. Where is the house, is it likely to get flooded in the first rains? Is it built on an old mine? What about the building – is it listed and renovation or extensions will be vetoed by the local council? What about safety, is the neighbourhood up and coming or safe and secure? Consider local schools and nightclubs. Again, best advice is to check with family, friends and your team. The more information you have the better your decisions will be.
Lastly but equally importantly, buy what you want but don’t over extend your budget. There are always hidden costs and you need to account for these to not leave you flat broke, don’t forget, buying a house has many more costs than just the actual house.
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