For most people purchasing a property is the biggest single financial investment they will make. Lows have been helping our clients find their perfect property for generations and our expertise is available to clients purchasing both within Orkney and elsewhere in Scotland.
Here are some simple tips for perspective purchasers to bear in mind:
For some purchasers a property is a place to live and nothing more than that. For others property is an asset which they hope will provide income and/or capital returns. The type of property you buy should always fit with your financial objectives.
Research shows that the average home owner moves every 7 years. For people who are in employment which requires them to be highly mobile or who think there may be major change in their personal circumstances being committed to a property might be considered too restrictive for them.
If the maximum mortgage you can raise is £100,000 and you have savings of £20,000 there is no point in looking at properties priced at £200,000.
In the current climate lenders are extremely careful in underwriting mortgage applications to ensure that borrowers are not overstretching themselves but it is still a good idea to factor into any calculations how your lifestyle and spending would be impacted on each time your borrowing costs increased by a percentage point. Whilst interests rates are currently historically low within the last 20 years mortgage interest rates have been as high as 13 or 14%.
Research the location and amenities thoroughly - there might be a house that is absolutely ideal for you in terms of layout and design but if it is not in the catchment area for the school you want your children to go to that might be enough to put you off.
Is property adaptable to suit a change in circumstances? Family sizes can vary as children come along and then (eventually!) leave home. It is a good idea to always try and plan for what you think you may need in, say, 5 years’ time.
If you need a mortgage take independent advice. An independent Financial Adviser such as our Robert Adamson can look at the entire mortgage market to find the mortgage that is right for you. If you go directly to a bank or building society then you are likely only to be offered their financial products.
Get the right paperwork in order for your mortgage application. Lenders will need to see evidence of your earnings and savings. Expect to be asked to provide wage slips and bank statements for the last 3 months, a P60 and, for the self-employed, accounts going back for at least 2 years. Many lenders will require to see originals rather than copies of documents.
Remember to budget for additional expenses. Alongside paying for property you will also need to earmark funds for mortgage processing fees, survey/valuation costs and all costs involved in purchase conveyancing including legal expenses and stamp duty (if applicable). In the case of legal expenses Lows are always happy to provide a detailed fee quotation at the outset of any purchase.
If there is a Home Report read it before you view a property. Most residential properties marketed in Scotland will now have a Home Report available. You can usually request sight of this through the selling agent. The Home Report will contain a range of information about the property including an Energy Performance Certificate and a Surveyor’s Valuation. Looking at a Home Report before you visit a property may help you identify factors which could put you off a particular property and could save you an abortive viewing.
Try to be on time for any viewing you arrange and if you have to cancel or you are running late try to phone and let the owner know. When you are viewing it is obviously acceptable to carry out a thorough inspection but do try and respect the privacy of the people who live there. If you are given keys for unaccompanied viewing please remember to return them punctually. If you make a good impression with a property owner it is always possible that your offer may stand a better chance of success!
If you see a property that you do like it is a good idea to try and arrange a second viewing. You might see something in a second viewing which was not obvious on the first occasion you viewed. For properties in need of renovation it is often a good idea to take an Architect or a Builder to get the benefit of their view on what might need to be done to a property.
If there is a property you are seriously interested in and you do not want to lose out then getting your Solicitor to note interest on your behalf is a good idea. It shows the seller you are serious about going ahead but it does not create any binding legal commitment.
The best person to speak to is your Solicitor. They will be able to advise you on the legal formalities involved in submitting an offer and they can give you the benefit of their experience on what to offer and other stipulations such as a date of entry which you may need to make on the offer.
If you make an offer “subject to finance” be ready to progress your mortgage application as quickly as possible. For sellers it is very frustrating to have to wait weeks for a mortgage application to be processed.
Your Solicitor will need to have cleared funds for any deposit you are paying alongside mortgage funds. If funds are on an account with a set period of notice please make sure to apply in good time.
After you move in remember to notify your change of address. You should tell your employers, your bank and if necessary others such as HM Revenue & Customs. If you are moving to a new area make sure to register with a GP Practice and enrol children at school.