Buying a Home on a Budget For Dummies (UK Edition)
No need to worry about buying the right property on a tight budget: This Cheat Sheet covers everything from getting the right mortgage to knowing what questions to ask when buying a house.
Handy Contact Information when You’re Buying a Home in the UK
Here’s some useful contact information to help you find UK house-buying experts. Try these numbers and websites for help finding the right person for the job.
Estate agent: The National Association of Estate Agents or call 0844 387 0555.
Licensed conveyancer: The Council for Licensed Conveyancers or call 01245 349599.
Solicitor: The Law Society or call 020 7242 1222.
Surveyor: Royal Institution of Chartered Surveyors (RICS) or call 0870 333 1600.
In Scotland, RICS Scotland or call 0131 225 7078.
Tips on Buying the Right Property
Here are some top tips on the right questions to ask and what to look for when buying a property. Although everyone’s requirements are different when it comes to buying property, keep these few general rules in mind:
Be clear in your mind about what you want before arranging to view any properties.
Research the area carefully, particularly if you aren’t familiar with it.
Don’t let the agent or seller rush you into a decision: Take your time and trust your instincts.
Ask yourself whether you can see yourself living in that property. If you aren’t sure, keep looking.
Ask the sellers about the neighbours and whether they have had any problems. If the sellers have made a complaint about their neighbours to the police or council, they are legally obliged to tell you if you ask.
Time the commute to work and the school run at the time of day you are likely to make these journeys.
Visit the property after dark. If troublemakers are hanging around on street corners, you may not feel safe walking home late at night.
Commission a survey. If you don’t, you may miss serious structural problems that are expensive to rectify once you have bought the property.
Mortgage Do’s and Don’ts
Your home is likely to be your most expensive purchase – ever. So getting the finance right is vital. Check these quick but crucial tips on how to get the best mortgage for your budget when buying a new home.
Don’t accept the first mortgage offered to you by your bank. Shop around to see whether it’s competitive.
Do use an independent mortgage broker to find a home loan; this can save you time and effort searching the market for the best deal.
Don’t overstretch yourself: Work out whether you can afford to meet the repayments if interest rates rise.
Do put down a deposit if you can. If you’ve got a deposit, you’ll not only get a better mortgage rate, your monthly repayments will be lower and you won’t have to pay Mortgage Indemnity Guarantee.
Don’t get a mortgage with extended redemption penalties. Paying a penalty for switching mortgages before an offer comes to an end is fair enough. But don’t accept a mortgage with penalties that extend beyond this period.
Do shop around for buildings insurance. Some lenders charge borrowers a one-off fee if they don’t take out the buildings or contents insurance with them. It may be cheaper to pay this and buy your insurance elsewhere.
Extra Costs to Budget For when Buying a Home
On top of the property purchase price, you must remember to budget for a number of extras. Make sure you don’t get surprised by hidden costs when buying a house in the UK. Make sure you’re aware of these fees and bills:
Solicitor’s fees, local searches, and Land Registry fee.
Stamp Duty Land Tax on properties over £125,000, £150,000 in certain disadvantaged areas, or £250,000 if you are a first time buyer.
Mortgage lender’s valuation and survey. It’s tempting to skimp on the survey but you may regret it in the long run.
Mortgage application fee, booking fee, arrangement fee, and mortgage broker fee (where applicable).
Buildings insurance. You can’t get a mortgage without it.
Removal costs. One way of saving money is to do the move yourself, so persuade strong mates with vans to lend a hand.