|House buying & selling tips|
Buying a house
First go to your lender and see how much you can borrow. This allows you to know what you can bid on. You can borrow three times your yearly salary; sometimes a lender will allow you borrow more depending on your circumstances. Most buyers put both savings and profits of selling a previous property into the deposit for the new property although 100% mortgages are available. There are many special deals for first time buyers, lenders are keen to attract new business.
Budget for additional work
Budget for improvements and alterations and include this in your budget for buying a property after viewing and surveys. The surveys should give a guide to what needs to be done and an estimated cost.
Bidding on a house
Never offer higher than a house is worth for three reasons:
- You may get objections from your lender.
- You may lose money when you re-sell.
- Negative equity in future years if you stay. The housing market may not always be as good as when you bought.
Some houses (like new build houses or houses in remote areas) may lose equity and you end up having a mortgage of more than the market value of your house. You want to buy a house which goes up in value each year at least by inflation. This sounds obvious but many people end up with negative equity. Just because you love your house does not mean that the public will in the future.
How long do you have to sell your property? If you want the full price for your house be prepared to wait for the right buyer. If you want to sell within a timescale you may want to lower the price, or even offer a fixed price for your home. Consider multiple simultaneous ways such as selling-online, estate agents or independently. Find the right balance for your circumstances.
Estate Agents and Private Sales
Estate Agents cannot by law disclose what offers have been made for a property before the closing date, whereas in a private sale the seller can reveal the amount of rival bids if they wish.
There are so many lenders, so it pays to shop-around, buying online could save you money. Lenders are especially keen to attract new business and first time borrowers are usually offered attractive deals with an eye to future lending.
You should tailor your mortgage to suit your finances and plans for the future. Most lenders will offer many options and even a combination of any of the mortgage types listed below. It's is in the lenders interest for borrowers to be locked into a mortgage for a fixed term, so consider your options carefully before agreement as you may lose out by changing the terms of your loan at a later date. Lenders will usually offer attractive rates for this kind of locked in mortgage. As always, find a good financial adviser as they can worth their weight in gold.