Information for First Time Buyers
As a first time buyer you are in a favourable position that you have no chain, but the sales process can be quite daunting! We’ve created some blogs for you which I hope will help you make this journey exciting rather than scary.
What's the first thing i should do?
A mortgage calculator gives you a rough idea of what you can afford. These are easily accessible. But speak to an independent mortgage broker who can give more in depth advice so you can have accurate search criteria. Moreland can recommend a broker to you - please ask.
What is an aip?
Agreement in principal. This is a lender saying in theory they will lend you the money based on the information given. This however is not a guarantee that they will lend.
What paperwork do I need to provide?
A broker will ask for your id, proof of address, utility bill, bank statements, payslips, tax returns (if self employed). Make sure you have all this ready. Warn your accountant you are looking to buy so they can get your tax returns prepared.
How much do I need upfront?
10% deposit minimum is standard. This is payable to exchange.
What's a mortgage offer?
Once your mortgage application is in, the lender has carried out a valuation survey, valuation is passed and the underwriters have verified all your documents the lender will issue a mortgage offer which states the terms of the mortgage. Such as length, repayments and interest rate. This process tends to take about a month from start to finish.
What is leasehold or freehold?
Most houses tend to be freehold as you will own the land the property sits on. With leasehold you do not own the land the property is on, and if it’s a flat you don’t own communal areas such as stairs or hall, nor the structure of the building itself.
What is service charge?
If you are buying a flat you will need to contribute funds towards the upkeep and running of the building. Larger blocks and those with lifts tend to have higher service charge. This areas average is around £3000‐£4000 per year. Make sure this is budgeted into your monthly outgoings.
What is in a management pack?
The managing agents or freeholder will provide a copy of the lease, service charge demands, any planned works, relevant correspondence.
What is exchange?
Once your solicitor has done all their due diligence and reported to you (gone through all their findings with you) and confirmed you are satisfied with everything they will ask you to sign contracts and pay the 10% deposit. The vendors solicitor will also have contracts signed. A completion date is agreed between both parties. The Solicitors contact each other to 'exchange contracts' and your solicitor will send the deposit to the vendors solicitor.
What is completion?
This is the date you get your keys and move in. Your solicitor will have requested your funds from your lender and you (if you are paying more than 10% deposit/cash) in preparation. All the funds are sent to the vendors solicitor, and once they confirm they have received them and all signed paperwork is in place keys can be released. Depending on if there is a chain, this tends to take place around 12pm.
Do feel free to contact us anytime if you have any questions or need any recommendations.