As Spring approaches and the property market reaches its height many will set their minds towards leaving the family home and purchasing their first property whether that be a bachelor pad, a first house with a partner or a family home.
The property market has not been sheltered from turbulent global markets over the past eight years or so with mortgages becoming more difficult to secure and property values falling and then failing to rise as quickly as many had predicted. As a result, first time buyers and those returning to the property market after a break will be met by a landscape completely unfamiliar to them. In the hope of assisting, we have thrown together a very brief guide on the steps that first time buyers should consider taking. It should not be treated as all-encompassing however it will hopefully act as a starting point for those fleeing the nest (or being shown the door):-
1. Mortgage Enquiries
For all but a fortunate few, a mortgage will be essential to fund your purchase. Before beginning your property search you should start by making an appointment with a bank or building society or an independent financial advisor to discuss the level of finance that you can expect to receive. The goal at this stage is to secure a “mortgage offer in principle” or a “mortgage promise” which will give you an idea of your budget for your property search.
2. Your Deposit
In the months and years lading to this point, you will have been saving for your deposit and many of you will have taken advantage of Government backed Help to Buy ISA’s. From April 2017 these will be re-named Lifetime ISAs (or LISAs). These operate like a normal ISA however when used to fund the purchase of a first property, a Government bonus will be added to your savings pot. More information on these can be found here – https://www.helptobuy.gov.uk/help-to-buy-isa/how-does-it-work/. Don’t cash these in at this stage! Wait until you meet with your solicitor who will tell you when your ISA should be closed.
3. The Search Begins….
Get out there and start viewing properties. It is always wise to ask the estate agent for a copy of the Home Report prior to viewing. This means that any matters that are identified as possible concerns by the surveyor can be investigated thoroughly at your viewing. If you see a property that you like then contact Craig Brown craigb@patten.co.uk to make a formal note of interest. A note of interest means that if another party offers you will be told about it and, if you wish make an offer in competition to this a “Closing Date” will be fixed where all interested parties will have one shot and one shot only to make an offer.
4. Making an Offer
When you have picked the property for you, it’s time to make an offer. If you are fortunate then there will be no notes of interest from other parties giving you the opportunity to negotiate with the seller on price. Sometimes, the seller will be the person showing you around the property and there is nothing to stop you making an offer directly to the seller in these circumstances. Verbal offers are not legally binding. If you would prefer to make an offer to the estate agent marketing the property then contact Craig Brown craigb@patten.co.uk to do this on your behalf.
5. Firming up the Mortgage
Your offer has been accepted, Great! Make an appointment with your mortgage advisor or financial advisor to provide them with details of the agreed price. From there, your mortgage application will be placed before an underwriter who will decide whether to upgrade your “mortgage in principle” or “mortgage promise” to a formal mortgage offer. There is a lot of information for an underwriter to consider and it can therefore take a number of weeks before your mortgage offer will arrive through the post.
6. The road to getting your keys
By now your solicitor will be in close contact with you. There will be things like buildings and contents insurance to arrange. You should ensure that you provide your solicitor with the closing statement for your Help to Buy ISA or Lifetime ISA no less than three weeks before your entry or move in date. Your solicitor will have a declaration for you to sign and you will also have a document called a Standard Security to sign in connection with your mortgage. Your solicitor at Patten & Prentice will keep you fully informed until the keys are in your hand.
7. The Title Deeds
By now you’re a landowner! The Land Register of Scotland will normally take a month, although in complex cases, sometimes a year or longer to produce title deeds showing you as owner of the property. Your solicitor will send a copy of the Deeds to you as evidence of your ownership.
At Patten & Prentice we offer a competitive First Time Buyer discount. Contact (Craig Brown) craigb@patten.co.uk for more information regarding this.
