Buying a property? Whether it’s your first home, you’re up- or down-sizing, or just buying a property to let it out, there’s a lot to think about. Here are five decisions that you will need to make before you buy a home – provided property expert and freelance writer Mike James. These five decisions were decided upon with George Ide solicitors, as part of a project of advice-based articles for homebuyers.
Where is the most sensible place to buy?
You might be familiar with a certain area, but that doesn’t mean that it’s the most convenient place for you to live. Think about your working situation and whether it is likely to change while you are living in your new home. If you have children you need to think about whether you will be in the catchment area for a good school.
Equally you need to consider if house prices are likely to rise. Do your research and take a look at the how strong the property market in the area has been over the past few years.
Realistically, what is your budget?
Your budget is very important – and you need to stick to it. If you know, for example, that you can afford a mortgage of £200,000 it is always better to look at properties that are a little under this price so they you have the option to offer more if you need to negotiate. The last thing that you want to do is to go over budget. It’s not just the problem of potentially over-burdening yourself with financial commitment – you might actually find that lenders will not give you the mortgage you are looking for if you go too high.
Would renting be a better option?
Many people see buying a property as the preferable way to live, but depending on your circumstances it might not be the perfect situation for you. For example if you’ve never lived with your partner before you might want to rent first in order to test your compatibility living together. While it might not be the most romantic thing to think about, it will really cause problems if you buy a property with your partner only to later decide you no longer want to be together.
Are you prepared for what the future will bring?
There are actually two things you need to think about before you make this decision – the first is about your future, the second is about the financial future.
Many people know that they want to buy a property fairly early on in their life but now that you’ve come to the point where it’s a practical possibility you need to think about more than just your current circumstances. Getting a mortgage means committing yourself to more than two decades of a serious financial outlay – so it’s important to know where you are going. For example, if you’re in a long-term relationship with your partner, you might think that a one bedroom flat is the perfect choice. But also consider if you are likely to have a child soon. If you are then you’ll need that extra space for a baby. You don’t want the stress of having to move house just as a baby arrives.
The second point is you need to ask yourself where you are prepared for the financial implications of a mortgage. Importantly, interest rates are currently at a very low level, but it could be that these will begin to rise again as the economy strengthens. If they do, you could start to see your mortgage rates increasing too. Even if you have carefully budgeted for the current interest rate, ask yourself whether your mortgage rate going up would make it unaffordable for you?
Which services do you need?
There are a number of services that you might wish to use. Conveyancing is a given – you will need a professional solicitor to deal with complexities of the legal aspects of buying a property. It is vital that you choose a solicitor with experience in dealing with the kind of property you are buying to give you complete peace of mind.
A mortgage broker is also an option. If you are a first time buyer it can be reassuring and relaxing to have a mortgage broker dealing with the details of your mortgage application, but it you feel confident in doing it yourself it could be a needless expense.
