Buying a house, especially for the first time, can be a daunting process. From financial obligations to legal intricacies, each step requires careful consideration.
Many first-time buyers will agree that the process is rarely the same for two different people. However, buying a house will be a lot easier if you know what to expect. As such, this comprehensive guide aims to take you through the key aspects you should check before making such a significant investment.
Don’t start the house-hunting process without first going through this comprehensive checklist for buying a house – Read this comprehensive article to ensure you cover all the important aspects.
Understand Your Financial Capacity
The first step in buying a new home is understanding your financial capacity. Consider your monthly income, existing financial obligations, and savings. If you’re taking a mortgage, be aware that lenders typically prefer that your monthly mortgage payment, including taxes and insurance, does not exceed 28% of your gross monthly income. Ensure you have enough money for a deposit, typically between 5% to 20% of the property’s price. Meeting with a mortgage advisor before you start this process should answer any questions you may have and point you in the right financial direction for buying your first home.
The second most important factor to consider when buying a house is your credit score. Your credit score is a critical factor that lenders consider when determining whether to give you a mortgage and at what interest rate. The higher your credit score, the better terms you’ll get. If your credit score is low, it may be worth taking the time to improve it before applying for a mortgage.
Scope Out Several Locations
Ideally, you would like to live in your new house for a few years at least while still continuing your life as normal. That is why you should consider the location of your next property and its proximity to essential facilities like schools, hospitals, shops, and public transportation. Research the neighbourhood, looking into aspects such as safety, noise levels, and potential future developments that could affect property value.
The size and layout of the property should also meet your current and anticipated future needs. Consider factors such as the number of bedrooms and bathrooms, availability of a garden, and storage space. You do not want to end up spending more money on renovation projects in the future, after all.
Inspect Properties
Of course, one important factor when it comes to viewing an available property is its structural integrity. As such, hiring a professional surveyor to assess the property’s condition is a crucial part of the inspection process. They’ll identify any structural issues, such as dampness, subsidence, or roof problems, that could lead to expensive repairs in the future.
It is also wise to check the Energy Performance Certificate. It ranks the property’s energy efficiency from A (most efficient) to G (least efficient) and estimates the typical energy costs. An energy-efficient home will save you money in the long run. You can also save yourself some money in the long run by examining the condition of the plumbing and electrical systems. Old or faulty systems can be expensive to replace or repair.
Legal Considerations
Ignoring any of the legal requirements of buying a house could place you in financial trouble down the line, even if you never intended to break the law. That is why it is so important to learn more about the legal considerations when buying a house. Fortunately, a company like 24 Housing is knowledgeable enough for anyone trying to buy a home in Cheshire. You should always confirm that the person selling the house is indeed the legal owner by checking the Land Registry. This document will also provide information about any restrictions on the property and its precise boundaries.
There are also planning permissions and building regulations in the UK that you must consider. Check whether any building works or extensions have had the necessary planning permissions and comply with building regulations. Failure to do so can lead to legal issues, and you might have to pay for alterations or removal. You may need to worry about whether the property is leasehold or freehold in some situations. Freehold means you’ll own the property and the land it sits on outright. On the other hand, a leasehold means you’ll only own the property for a fixed term and may have to pay ground rent or service charges.
Home Insurance and Warranty
Building insurance can help protect you financially if your home is harmed in an incident that is outside of your control. Getting this type of insurance is usually a requirement from mortgage lenders and covers the cost of rebuilding your house if it is damaged or destroyed. Ensure the cover is enough to rebuild your home from scratch, including costs like demolition, site clearance, and architects’ fees.
You can also think about getting a home warranty- particularly if you are buying an older home. It covers the cost of repairing or replacing major home systems and appliances. Although, you may find that its main purpose is to provide peace of mind that you won’t face significant unexpected expenses.
Purchasing a House
Once you’ve found a house you’re interested in, it’s time to make an offer. It’s recommended to start negotiations below your maximum budget to leave some room for negotiation. Hire a solicitor or a conveyancer to handle the legal work. They’ll carry out searches, deal with the Land Registry, manage the collection and transfer of funds, and provide legal advice.
If you’re taking a mortgage, now’s the time to submit your application. Keep in mind that a mortgage offer is typically valid for six months, so ensure your completion date falls within this timeframe. Only during the exchange of contracts does the agreement become legally binding. Both parties sign final copies of the contract and send them to each other. At this point, you’ll usually pay a deposit, and a completion date will be set.
Moving in
Buying a house can be an exhilarating journey, but without proper checks and considerations, it can quickly turn into a stressful experience. Following this checklist can save you from unexpected costs and legal issues, making your home-buying journey a smooth one. Only then are you free to start moving in.
