Thread by @funkomi, Morning! Slightly off my usual threads but decided to do a PROPERTY [...]

Morning!

Slightly off my usual threads but decided to do a PROPERTY thread because I see lots of us are making this leap atm. This isn’t for the ones who know it all already

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#Thread

MORTGAGE IN PRINCIPLE: this is a “soft” mortgage offer from a lender that says provided your credit score and affordability matches up, this is how much we will lend you. Its not essential but a great first step to show you are serious.

SEARCHING FOR A PROPERTY: luckily we have loads of apps / sites where you can search including @rightmove @Zoopla @PurplebricksUK etc. Also remember to look for local estate agents in your area for gems that don’t make the large sites. you can request they send you properties too

Personal tip: search for £50-150k ABOVE your budget to see some nicer properties then get ready to negotiate that down to what you can afford.

LEASEHOLD: is for the purchase of a flat. You will own the flat but not the land. Leases should be at least 125yrs long, if your lease has under 80yrs left it is a bad lease and the price should reflect this. You will need to pay ground rent + service charges too.
(Hidden cost)

FREEHOLD: is for house purchases. You will own the house and the land it sits on plus some surrounding areas marked out in the title plan. No ground rent or service charge is paused but you are responsible for EVERYTHING that needs fixing.

SHARED OWNERSHIP: you will buy a percentage of a house and the Property developer will own the rest of that house. You will pay your mortgage PLUS rent on the bit you don’t own + service charge & ground rent.

OFFER: once you have found a place you like, you put in an offer. This is simply how much you are willing to pay for it. Properties have been known to sell for up to 35% less than their list price! If your offer is rejected, you CAN put in more offers if the seller is willing.

OFFER ACCEPTED: your offers are communicated through the estate agent, once its accepted you’ll normally get a phone call/email confirming and sometimes a formal letter follow up. You’ll need to start moving fast if you want this property.

MORTGAGE APPLICATION: You’ll now need to go ahead with your full mortgage application. If you use a mortgage broker, they will do this for you and its normally very fast, you can also apply directly with a bank. You’ll get offers at different rates, so check the interest rate.

Some mortgage brokers charge fees either up front or a portion of your offer paid by you/the lender or a combination of both. You should really not be paying more than £500 for this.
(Hidden cost)

MORTGAGE: you can get a (i) fixed rate, usually for up to 5yrs (great for certainty but you need to remortgage at the end of that) or (ii) variable rate which goes up and down with the current base rate, meaning your repayments amount vary.
Your offer will last for 6mths - 1yr.

SURVEY: if its a period property, large / older building I would always get a full building survey this is usually from £500-£1500 but is the highest level survey which checks everything and you get a FULL structural report by a RICS qualified surveyor.
(Hidden cost)

You can get a Condition Report (Level 1) or a Homebuyers Report (Level 2). For cheaper and typically for newer builds with less structural risk.

Personal survey side point- we fell in love (rushed the viewings) with an Edwardian terraced, paid ££££ for a full building survey. Our surveyor ripped it to shreds

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https://abs.twimg.com/emoji/v2/... draggable="false" alt="😅" title="Smiling face with open mouth and cold sweat" aria-label="Emoji: Smiling face with open mouth and cold sweat">. We had to pull out

https://abs.twimg.com/emoji/v2/... draggable="false" alt="☹️" title="Frowning face" aria-label="Emoji: Frowning face"> but saved lots of future agony!

INSTRUCT A CONVEYANCER this part can be hard, there’s so many. ASK friends/fam for recommendations as your solicitor is the difference between completing in 3 weeks or in 6 months to a year! They also spot legal issues (and sometimes miss them!) Check reviews online & get quotes.

Legal FEES are made up of essentual fees (property search fees, land Registry, stamp duty, etc) then fees the firm chooses to charge for their services and can include conveyancing cost, fee to transfer funds digitally etc. Read the fee schedule carefully and ask questions.

CONVEYANCING: they will do ID checks, then sellers need to send a draft contract over, then searches, any inquiries on searches (back and forth until resolved), your lender will send your solicitor your full offer, they’ll advise lender of any issues. Once all good, exchange!

EXCHANGE: this is the first point in the whoollee thing that your purchase becomes legally binding and before this either party can pull out! You will sign a bunch of documents, some will need to be witnessed and send to your solicitor. Your solicitor will request funds.

GAZUMPING is when another buyer comes and gives a higher offer on your beloved property after allllll this

https://abs.twimg.com/emoji/v2/... draggable="false" alt="😭" title="Loudly crying face" aria-label="Emoji: Loudly crying face">. Seller pulls out before you exchange.
GAZUNDERING is when the buyer decides after alllllll this to offer a lower amount, if not accepted, they pull out

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Exchange and completion can be on the same day but usually isnt to avoid mortgage fraud and allow the banks to remit funds.

CHAIN: this is where the buyer / seller is also buying or selling at the same time. The whole deal is contingent upon all these purchases and sales going through smoothly on the same day

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COMPLETION: a date will be set! your lender will send the mortgage monies to your solicitor, you will send your money to your solicitor including any stamp duty payable and legal fees.

Chains can mess up this day!

Once all monies have come through you’ll get that call....

KEYS: you can go and collect your keys! The home is officially yours

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POST COMPLETION: your solicitors will send you paperwork from the land registry confirming the transfer of ownership to you. Chase on this if you do not receive it, sometimes they slack. Its essential.

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