Sunday, 5 June 2016

HOW TO: Five things to do before buying a house

The Lad and I have decided to move this year (hopefully). 

Now, we've moved as tenants before, but never as potential buyers so this whole process is completely new to us. And to be honest scary. 

We're currently talking to a lot of professionals about our money and spending habits which is pretty invasive for a socia-phobe like me. But, it's got to be done.

We started our house buying journey a year ago and we're only just on the cusp of going out to buy our dream house; a guide or some tips that could have helped us out in the beginning would have cut out our heartbreak and disappointment.

So here they are, my five tips to preparing to buy a property:

1. Save way more than you think you'll ever need.
I've spoken before about my anal obsession with saving, but it really counts. I started saving four years ago by putting a £750 tax rebate straight into a savings account. I figured that if I'd done without that extra cash in my paychecks each month up until that point, the government had done me a favour by saving it up for me and starting me on my way.

Start by seeing what you have left at the end of the month. Scrimp and bargain and you might be surprised when you end up with £50 left. Then maybe you push it to £100. Then circumstances might change and you can save more and more.

It helps to keep savings separate and treat them as another bill. Another outgoing that you can't touch once it's gone.

Obviously life events are going to happen. Car tax, insurance, Christmas, birthdays. But when people know that you're not splurging on yourself either, they will accept just a card this year. And the year after that. And the next. But they probably will want to be invited to your house warming. And as for insurance and car tax/travel costs, they're inevitable. The way I try to compete against these are by saving as usual, but scrimping even more for a couple of months before. Sometimes I'm not a socia-phobe by choice. I just can't afford to go out.

A 20% deposit is still the minimum you should be aiming for. I know there are companies that will lend with a 5% deposit, but even then, you'll be paying enormous amounts back each month and the length of your mortgage will probably be something cray like 55 years. Do you seriously want to be eighty and still paying through the nose for you home? Didn't think so.

2. Go see a broker.
The greatest thing we ever did was see an independent mortgage broker. We saw two others - at the bank and at an estate agents - and both sold us a dream rather than a reality. A broker is still working for commission, but they're more likely to not be endorsed or affiliated by any particular lenders.

You would think that the bank would be a reliable source of advice, but we found them more interested in stretching what we could afford to our extreme limits. Our balls would have been in a vice if we'd have taken their offer back then. The broker we saw was very honest and very direct - two things you definately need when you're talking about hench amounts of money.

What you're after here is for the broker to say you're affordability is awesome and your deposit takes their breath away. With those two things you can get your hands on a Mortgage in Principle - essentially a lender saying okay, we'll lend you X amount, now go find a house to buy.

3. Notify local estate agents you're in the game.
You might think that trawling Zoopla and Rightmove every evening means you're in the loop for every property you might ever fancy purchasing, but despite all the marketing and sales techniques Estate Agents employ, they're rigged. If you can prove to an Agent that you have a Mortgage in Principle secured behind you and know what type of property you're after - they will notify you of a potential property before it's put on the market and therefore give you a little bit of time to decide whether the property is for you or not.

4. Sort your shit out
I mean this in an all encompassing way. You really need to have your finances in order (see tip 1), but before you move you need to sort all your belongings out as well.  The wardrobe tips and cleaning tips I've shared before with you guys are what I'm talking about here. Really sort through your things; do I really need this? Do I use this? Would the money I'd get from selling it on eBay be more handy after the move than carting it along with me? It's a double whammy because not only do you end up with less things to move on the day, but you have extra cash to buy new things suited to your new environment.

5. Ask all the questions
Don't be afraid to ask a potentially stupid question. The estate agent/broker might raise an eyebrow, but when you've never been in this situation before I'm certain that no question is a stupid question for you to ask. If you don't know the answer and think that they might, ask them! The more knowledge you can accumulate over the course of this experience the better. It means you'll be able to make a more informed decision about the kind of situation you'll be in a year down the line.

If you can, I'd make a list of things you'd like to ask. Write them down so you don't forget. Add to that list as the process goes on and make sure you find answers for every single query you have.

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