5 steps to moving in
This is a really great place to start because it means we can help with any questions you may have and make sure you’re realistic about how much you could afford to borrow and how much you can afford to be paying on your mortgage right from the start.
Our mortgage calculator can give you a rough indication of how much we might lend you based on your income and national average household bills. But everyone is different so to really help you get your numbers straight it’s worth calling us for a chat.
Then we can sit down and look a bit more closely at your monthly income and outgoings to work out what you could afford. It’s worth digging out bills for everything from utilities to credit cards and any loans you have outstanding, so we can have real figures to work with.Let’s talk about deposits
Deposits can be a big issue whether you are buying for the first time or moving on. The average deposit is typically around 15%, but as a general rule the more you can put down, the better mortgage deal you can get.
Your deposit dictates what’s known as your loan to value ratio or LTV. This ratio simply reflects how much deposit you are putting down in relation to the cost of the property you're buying.
For example if you are buying a property worth £200,000 and you put down a £40,000 deposit then you need to borrow £160,000.
The mortgage amount therefore represents 80% of the cost of your property. You are said to have an 80% LTV
If however you were able to put down a £50,000 deposit on the same £200,000 property then you would only need to borrow £150,000.
You would then have a 75% LTV. This is important because many of the most competitive deals kick in when you can put down at least a 25% deposit. So be sure to ask about LTV when you talk to us – anything you can do to get it down could save you a lot of money in the long run.
Product fee. Most of our mortgages do come with a product fee attached, but you have the option to add this to your mortgage, so long as you’re aware that it will cost you more in the long run.
If you already have a mortgage with us or with another lender there may be early repayment charges to consider too.
Mortgage Valuation fee. You will need to pay for our valuer to value the property before you buy it and this could cost upwards of £150.
If you're selling a property as well, you'll have to pay Estate Agent's fees. Don't be afraid to negotiate as these can vary between 1% and 3% of the sale price.
Stamp duty land tax. This varies depending on the price of the house you're buying. Your solicitor will be able to tell you the amount payable.
Solicitor's fees. You will have to pay your solicitor's costs for dealing with the sale and purchase legal work. These costs will typically range from £500 to £1,500 (Money Advice Service, 2015) but any legal complications could push the price up, so shop around to find the best rate.
Expenses. You will have to pay any disbursements (i.e. expenses) incurred by your solicitors such as search fees and Land Registry fees.
Removal costs. You can use a removal company or you can rope in your friends and buy them beer and pizza!
Now you know your price bracket the house hunting can start in earnest!
Before you set out, think about where you want to live and create a check-list of all the things your new home should have. Look at a lot of places to understand what’s out there and what the prices are like. If you’re moving to a new area, take the time to visit and research the surroundings and amenities thoroughly.
Once you’ve found the perfect property it’s time to make an offer.
Remember, the estate agent is working on behalf of the seller so will want to get the best possible price. Make sure you work out the maximum you can afford to spend and bear in mind the moving in costs such as solicitors fees, expenses, stamp duty land tax and removals we mentioned earlier.
If your offer is accepted you’re now ready to make your formal mortgage application. Your N&P Mortgage Adviser will talk you through the extra information they will need from you and the different types of mortgage available to you.
With your offer accepted and your mortgage application in progress, now’s the time to appoint a solicitor. Ask friends and family for recommendations and shop around for estimates.
As part of the conveyancing process the solicitor will make sure that all necessary searches are carried out before you make any commitment to buying the property. An environmental and local authority search, for example, should warn you of any potential problems in the local vicinity that might affect the sale.
You should consider organising a survey on the property you wish to buy. A homebuyer survey and valuation, for instance, will ensure you're aware of any major problems or defects with the building. It also tells you about any potential problems with the property that may need to be rectified before you move in, or be reflected in the price.
Your solicitor will also ensure that all the formal contracts, deeds and stamp duty land tax forms are drawn up and signed correctly and that authorities such as the land registry are informed of the change of ownership.
When all the boxes have been ticked and everything has been covered, you’re ready to make a commitment to buying your home by exchanging contracts.
Before you can exchange contacts (when you sign on the dotted line and hand over a deposit) you will need to have received a formal mortgage offer. As soon as you exchange contracts you are legally committed to the purchase. At this point you will usually take the risk of any damage to the property.
The actual process of completing the purchase, collecting the keys and moving in might come some weeks later, it might happen the next day, depending on the position of everyone in your property chain.Lets talk about the future
While you are waiting for moving day, this is a good time to talk to us about home insurance for your new property. It’s important to have this in place from the day you move in, (not just in case your removal men are a little clumsy!), but also because lenders generally insist that buildings insurance is in place before they release mortgage funds. If the house is at your risk from the time that contacts are exchanged, then you may want to insure at that point in the process instead. Your solicitor will be able to advise you on this.
At last your big day is here! This is when you can collect the keys and move into your new home – just as soon as the money has been paid to complete the purchase.
Your first mortgage payment will usually be due some weeks later. By now it’s essential to have home insurance in place (remember it’s likely to be a condition of your mortgage) and of course tell all the relevant people that you are moving.