Buying a property can be the biggest decision of your life, however, little mistakes can result in big financial losses. Because we help doctors and dentists every day to fulfil their dreams of property ownership, we have drawn up our list of the Top 10 tips to get you started when looking to buy a property.
1 – Buy with your head, not your heart
Is it the right time for you to buy?
The UK is renowned for it’s property-buying obsession and many people aspire to owning their own bricks and mortar. However, timing is crucial and decisions should always be based on long term goals rather than just jumping on the band wagon in a desperate attempt to keep up with social expectation.
Property prices continue to rise in many places in the UK, yet mortgage rates are low. Ensure you have considered all your options as to when is a good time for you to buy.
The same applies if you are looking for a buy-to-let property.
Once you are confident that you are in the position to proceed, start a “property checklist” of things you are looking for in the property. This saves you falling head over heels for a property that is for whatever reason unpractical or doesn’t make sense for you.
2 – Can you afford it?
Have you researched mortgage options for affordability?
Before you even start to connect with estate agents and go for viewings, check out how much you can actually borrow and afford based on your earnings.
Here are a couple of useful calculators used by doctors and dentists to determine mortgage options:
FREE CALCULATORS
It is important to not just borrow the maximum a lender offers you either; make sure it meets your own lifestyle choices. For example, if you like a luxury holiday each year, factor this into your monthly costs so you know you won’t be just working to pay your mortgage.
3 – Fees, fees and more fees
Have you worked out the total cost of buying?
Inevitably moving house or buying a house costs more than anticipated, if you let unforeseen costs creep in.
Prepare a budget to protect yourself from going over your budget
Costs are likely to include:
- Mortgage arrangement fe
- Valuation fees
- Solicitors fees
- Stamp Duty Land Tax
- Surveys and other admin fees
- Removal costs
- Immediate property repair
- New furniture requirements
View the latest Stamp Duty Land Tax rates.
4 – Boost your credit score
Have you maximised your hope of mortgage success?
In the months leading up to buying a property it is useful to be mindful of your credit score.
Initially, get it checked using a reliable source such as Experian (there are others) and rectify any errors before applying for a mortgage.
Your credit rating can be affected for various reasons such as old addresses, inactive accounts and missed credit payments, sometimes which borrowers are unaware of.
Boosting your credit score can be the difference between success and failure.
5 – Investigate financial support
Is help available?
The Help to Buy ISA is a new Government initiative to assist first time buyers with getting onto the property ladder.
The Government will contribute £50 for every £200 you save, up to a total of £3,000. This means over a four year period you could save up to £12,000 deposit for the purchase of your first home.
Of course, this is very much a long-term plan, but seak to a financial adviser to investigate any other options that are on the market when you are thinking of buying.
6 – Arrange a “Mortgage in Principle”
Have you spoken to a financial adviser about your options?
There are not many lenders who will offer a mortgage until there is a sale in process, however they are likely to offer what is called a Mortgage in Principle (MIT).
An MIT will inform you of the level you can borrow when you find a property and it can help strengthen an offer when the time comes to make one by demonstrating to the seller that you have the necessary funds approved, in principle.
There is no guarantee the funds will be granted until the mortgage company carry out their valuation but it is a good start to the application process.
An independent mortgage adviser will be able to research the market for you to ensure you are getting the best mortgage deal and rates.
“Dental & Medical Financial Services was better than competitive, they had the best rates; and I should know since I shopped extensively for our mortgage using the Internet and all other resources I had. They also provided incredible service, and that was a pleasant bonus.”
Dr Kaviani, Dental Surgeon
7 – Research the property
Have you questioned everything?
According to a survey by Barratt Homes, it takes on average under 30 minutes for a decision to be made on whether to buy a property.
There is pressure when it comes to making an offer, typically due to a shortage in houses and the fear of losing a deal.
Leave nothing unturned when it comes to researching the property though. Here are 5 ideas to get started:
- What is the council tax band?
- What repairs and maintenance has been carried out in the last 1,3 and 5 years?
- How many viewings they have had, any offers and time on the market
- Who are the neighbours?
- Is there parking?
Whilst researching the property, remember the purpose of buying the property too.
- Is this a house for you to live in?
- Do you envisage selling soon?
- Is it a buy-to-let?
- Are you leaving your options open enough for the future?
8 – Research the area
Have you questioned even further?
Ensure you have researched everything necessary before making an offer. This could include:
- The neighbourhood. Visit at different times of the day so you get a full picture.
- The schools. If you have or are planning a family, how are the schools in the area?
- Local transport. Time how long it takes to get to bus stops and train stations. Don’t just rely on the advert.
- Any new developments. Speak to agents about future building works in the area. Check your park view won’t be replaced with high rise blocks in the near future. The government’s Property Portal shows planning applications in your desired area.
9 – Getting the ball rolling
Is it time to make an offer?
Once you have gathered all the research information, checked your credit score, arranged a Mortgage in Principle plus worked out your Mortgage Affordability budget, you could be ready to make an offer.
As a final step, you can check properties in the area online and see the final price they sold for.
This should give you an idea on what sellers will be expecting. Also agents should be able to point you in the right direction, although bear in mind they have sales targets on their mind too!
10 – Arranging life cover insurance
Who would pay the mortgage if you died?
Consider what would happen to your property in the event you were to die. Who would take care of the mortgage repayments?
Speak to a financial adviser regarding Life Cover as well as possible Income Protection Insurance to protect your home for unforeseen circumstances.