Buying a House
Buying a house can seem daunting if you're a first time buyer but if
you have your mortgage sorted before you start looking, you can put
yourself in a strong position.
Many lenders can agree a mortgage even before you find
the right property through a mortgage-in-principle certificate.
You are not obliged to take up the offer with the lender and it doesn't
guarantee that you get the loan, but it can bring credibility with the
sellers and give you extra confidence for bargaining. It may also speed
up your eventual mortgage application, as most of the checks will have
been already carried out.
A pre-arranged loan can also help
you discover how much you can actually borrow, and alert you to any
problems with your credit rating - these
can be sorted before you find your property.
How to get a mortgage
You will need bank statements and payslips for the past 3 months and
your last P60, unless you are applying for a Self Certification (self-cert)
It usually takes about three weeks from the application to the formal
offer being made by the mortgage lender. This can vary depending on
As a general rule, mortgage repayments shouldn't exceed a third of your
100 per cent loans are available but there is the potential for negative
equity, and they tend to attract higher rates. A better option can
be a loan that offers 90 per cent with the possibility of further unsecured
Some lenders allow you to split your loan and have half on a variable
rate and the other half on a fixed rate.
Mortgages offering additional benefits, such as free legal work or
conveyancing are a bonus.
Watch out for early redemption fees - check what fees are payable if
you decide to repay the mortage early.
SVR - Standard Variable Rate - the normal rate when no special discounts
apply, changes according to market conditions.
Fixed - the rate is fixed for a defined period of time. A fixed-rate
mortgage is less attractive if you expect interest rates to fall as
you could be stuck with an uncompetitive rate.
Discount - the rate fluctuates with the base interest rate, but at
a lower discounted level for a set period. Make sure you also budget
for the possibility of a rise in rates.
Capped - the rate may fall, but can only rise to a fixed limit.
Tracker - the rate reflects the changes made by the Bank of England.
It can be for only a few years or for the duration of the mortgage.
(also called Capital and Interest
Mortgage) - you repay the interest on the loan and a proportion of
the capital (the
amount you borrowed) monthly. This ensures that whatever term you decided
on, you are guaranteed to have repaid the entire loan by that date,
provided the repayments are made in full and on time. Initially most
of your payments will be interest, but towards the end of the mortgage
term most of your repayments will be capital.
Endowment Mortgage - this plan combines investment and life insurance
and are designed to pay off your mortgage at the end of the term, or
in the event of your death. These mortgages are not as popular as they
used to be because investment returns have fallen in recent years,
and some people have been left with not enough to pay off the mortgage
Interest only Mortgage - you only pay the interest
on the mortgage loan and have to pay the original amount borrowed at
the end of the
term. These mortgages usually run alongside an investment plan, like
an ISA or endowment policy.
With endowment and ISA investment there
is no guarantee that they will repay your loan in full at the end
Flexible Mortgage - enables you to pay off the loan
more quickly without penalties, and you can use your mortgage as a reserve
Non-status Mortgage - helpful if you have had credit
problems, no credit status or have suffered Bankruptcy.
Expenses to consider
when buying a property
- Stamp duty - payable on properties costing more than £125,000
- Land registry fee - a search that ensures the sellers own
the property and there are no debts registered against it
- Local authority search - releases information about planning
applications near the property, such as new roads
- Solicitor’s costs
- Property insurance (if not included in mortgage)
- Final bills, such as gas and electricity
Survey and Valuation reports
These reports are carried out by a chartered surveyor to evaluate the property
Valuation report - this ensures that the house
value is enough so that if the mortgage is unpaid, then the outstanding
amount of the
loan will be covered. It is commissioned by the lender and the cost
is usually passed to the borrower, but some lenders will not charge
for the valuation.
It is advisable to have your own survey carried
out on your prospective property, as a detailed report will reveal
any potential problems -
perhaps allowing you to renegotiate the price before you commit.
Homebuyers Survey & Valuation - includes
significant matters such as subsidence or settlement and urgent
repairs for which the client
should obtain quotations prior to exchange of contracts.
Building Survey -
this comprehensive structural survey is very detailed and is recommended
for older buildings built before 1960, and should
reveal most defects. Each visible element of the property is inspected
and any necessary repairs will be identified
Stamp Duty - this property tax imposes a percentage
charge on the full price of a property, once the threshold is
Mortgage lenders say stamp duty now affects 75% of first-time
buyers, compared with around 25% in 1997.
Stamp Duty Rates (UK Government site - opens in new window)
Buildings Insurance - covers the cost of rebuilding or repairing
the property if it is damaged by fire, subsidence, flood, etc.
Surveyors include an estimate of the actual cost of rebuilding
in the valuation
or survey of the property.
If your policy includes the clause 'seek and find' the insurer
pays the cost of finding the cause of a problem, such as ripping
kitchen units to find a leak.
As well as building insurance you should obtain contents insurance
- it is not compulsory, but is recommended - a policy with a 'new
for old' clause ensures you get enough money to replace your possessions
with new ones when you claim. The premium is often lower if you
take out buildings and contents with the same insurance company.
will reduce the rates if the security of the property is improved
by fitting approved window locks or a burglar alarm.
Mortgage Insurance - taking out a Life Insurance
policy will ensure that in the event of your death your mortgage is
- an endowment
policy already includes this in the mortgage plan.
An Accident, Sickness and Unemployment Insurance will protect your
mortgage payments if you are unable to work or are made redundant.
The payments period is usually limited to 12-24 months, depending on
Once your solicitor is happy with all the searches, etc you will be
asked to sign the contract and pay the deposit on your new property.
As soon as contracts have been exchanged then the sale is binding.
Generally, on average it takes between 2-4 weeks between exchange of
contracts to completion.
If you time your move to be on the last Friday of the month the first
mortgage payment is kept low, because interest is charged from the
completion date and the first payment is not taken until the month
Moving House Checklist and Tips
Moving house is one of the most stressful events in
your life, but these tips might help ease the pressure a little.
Organising everything well ahead of the moving day
is the best way to make sure things run smoothly. The countdown should
begin six weeks before you move home.
6 Weeks before you move
- Confirm your moving date (usually the completion date), and arrange
your home insurance to cover you on the day you move in.
- Get at least 3 quotes (in writing) for removal costs. Ask friends,
family and work colleagues for a reputable removal company. If
possible choose a company who is a member of the British Association
of Removers (BAR) or the National Guild of Removers and Storers
(NGRS). Fridays and bank holidays are usually in high demand, so
try to opt for a mid-week moving date. Check if the removal company
offers discount if you move on an off-peak weekday. Make sure there
is insurance covering any damage to goods during transit. Check
whether there are any exclusions as some insurance policies don't
cover goods you have packed yourself.
- Notify the utility companies of your moving date and arrange
electricity, gas and water meter readings on your old and new property.
- Arrange your new telephone line/ internet/ satellite/ cable connection.
2 Weeks before moving day
- Confirm your moving time and ensure the removal company have
directions to your new house and your mobile phone number.
- Organise a time with your solicitor or Estate agents to collect
your new keys and hand over your old keys.
- Arrange to get your mail
redirected by the Post Office to your new address.
- Send your change of address and phone number cards or emails
to friends, family, employer, school, bank, building society, pension
provider, credit card company, vets, council tax, DVLA, Inland
Revenue, TV licensing, etc
- De-register from your GP and dentist if you are moving out of
the area. Remember to register in your new locality.
- Notify your local services, such as milk delivery, papers, window
cleaning, etc and arrange a cancellation date.
- Begin packing any non-essential items, i.e spare clothes, extra
crockery, books. Colour code or label the boxes per room you want
them in as you go.
Day before your house move
- Defrost the fridge and freezer.
- Label or colour code all the boxes and carpets with the room
you want them put in. Mark boxes with any fragile items, so the
removal firm will know to take special care.
- Pack a bag to keep with you on moving day with the essentials
- light bulbs, torch, fuses, loo roll, candles, matches, toiletries,
underwear, cash, phone charger and tools.
- Unplug any of your remaining appliances.
- Ensure a box containing a kettle, cups, tea and bedding is loaded
last of all - that way it will be the first to be unpacked. Put
in a bottle of champagne and glasses to celebrate later!
- Keep your essential bag out of the way of the removers, such
as in the car, and label anything you want to keep with you 'Do
- Count the boxes before they are moved and check when they are
delivered to your new address that you have them all.
- Make it your priority once you reach your new home to make the
beds and hang the bedroom curtains as soon as possible - by the
end of the day you'll be exhausted and it will be great to just
relax. Don't attempt to do all your unpacking on the first day,
just unpack the essentials - and make sure there is somewhere comfortable
to sit, eat and sleep.
Enjoy your new home and open the champagne!
knows where you live? (article in the Independent - opens in
What is a Bridging Loan? Why would you need one?
How do you find a Bridging Loan?
Selling and buying houses does not always go smoothly, it just takes a
break in the chain for the sale of your existing home to fall through.
You quickly need a Bridging Loan to complete on your new property purchase,
otherwise you could lose it if someone else makes an offer. A Bridging
Loan can also be the solution if :
- you need to buy a new property before you complete the sale
of your home and the equity is released.
- there is likely to be a delay in moving after completion.
- you need funding for short-term commercial or residential renovations.
- saving a property purchase if the mortgage is delayed.
Fast, easy application
The main advantage of a Bridging Loan is the speed you can get the money
you require, in order to successfully complete the purchase of your new
Find a lender specialising in arranging fast personal and commercial low-rate
bridging loans with easy online application and competitive rates.
Most lenders can usually give you an in-principle decision within 24 hours
and provide a speedy release of funds to you - usually in less than a week
and often within days.
Find specialists who will advise you on the best option and the best rates,
and help you to bridge the funding gap.
What is a Bridging Loan?
A Bridging Loan is a short term mortgage which is secured by your property.
This is usually arranged by getting a mortgage on the new property, and
taking out a second mortgage on the property being sold. This type of loan
is mainly available for house sales and is usually taken out to solve a
temporary cash shortfall which can happen when selling and buying different
properties or to pay for renovations. It 'bridges' the gap between the
purchase of a new property and the sale of an existing one.
There are generally two categories of Bridging Loans:
Closed - this is when you have exchanged contracts on
both the property you are buying and the property you are selling.
Open - this is when you have not exchanged contracts
on the property you are selling.
Bridging loans can be arranged for:
- Residential property
- Commercial property
- New house building
- Land purchase
- Overseas Property
This can be the most cost-effective way to fill the gap that can
sometimes occur between buying and selling your property.
Due to being for a short term Bridging Loans are usually at a higher rate than
your conventianal mortgage, interest rates are generally around 2.25% a month.
We ensure that the most competitive rates are offered to our applicants, due
to our specialist team of top lenders and brokers.
Purchasing a property at auction
Completion needs to be fast as you have to complete within 28 days,
so you need a bridging lender who can act quickly and professionally.
Unlike many of the main banks Bridging Loan specialists recognise the need
to deal rapidly with your request - which is vital where property purchase
is involved. You can expect to receive your funds within the week, enabling
you to continue with your property plans.
Find lenders who specialise in providing fast online access to Bridging-Loan
finance on residential or commercial properties in the UK.
Find lenders who have no maximum limit for Bridging Loans, so a
substantial amount is available if needed.
Find lenders who lenders will usually allow Bridging Loans of up
to 80% of the value of the property. The amount is borrowed for a
period from a week to a year. The maximum term for a Bridging Loan
is generally 12 months and no repayment is required until the loan
term has expired or the loan is refinanced. There is, in certain
circumstances, the flexible facility of extending the loan period
if necessary for some clients. Short term Bridging loans are quick
to arrange and are repayable either in a lump sum payment of principal
or monthly instalments.
A Bridging Loan is generally available as a stand alone product or is available
in conjunction with a mortgage.
Being self employed or having an adverse credit history or CCJs
need not be a problem. A Bridging Loan can even enable people who
have an adverse credit history to build a track record before applying
for a conventional mortgage. A successful Bridging Loan can have
a positive effect on a borrower’s credit score making future
finance more attainable.
Fast-track to your financial solution if you require bridging finance
quickly in order to secure the property of your choice, and only
need funds for a limited period of time. Find financial experts who
will help you through the application process to achieve your property
needs in the most cost effective way.