If you are planning to buy your first home, check out these top tips when buying a house!
Because we’ve been through it not long ago, and we have learnt loads.
Buying a house, and often committing to a lifelong mortgage, is a difficult and stressful decision.
We went straight in with no previous knowledge of the process, what to watch out for or how to prepare for this (often months long) journey.
I remember asking around and listening to horrible stories of months of delays, finding out the house you’re buying hasn’t been built according to the safety standards or being caught up in the sellers’ divorce fights.
We have learnt so much in the 6 months that went between the start of the house hunt and the day we got our keys, so I want to share with you my top tips when buying a house.
Do the maths
The first thing to do is to take a hard look at your finances and be realistic about it.
All around the internet they suggest you find the house of your dream then think how much you need for a deposit. That’s a recipe for a disaster and disappointment: we all think we deserve to live in a castle (or mansion, or villa overlooking the ocean, you name it) and we all believe we have more money than we actually do.
What to do instead?
Firstly, start by checking your saving account(s) and see how much you’ve got for a deposit.
Then, go online and use an affordability calculator, like this one, and see how much you could borrow.
You could also use your bank’s affordability calculator at this stage, even though you don’t have to get a mortgage with them. Surprisingly, they don’t offer preferential rates to their customers. Loyalty is not valued in this crazy world.
Don’t worry about credit checks, these calculators are just an estimate so they won’t show on your profile, but they give a good idea of the pot of money you have access to. That’s your maximum budget.
Remember that the deposit is not the only expense you’ll have when buying a house, you’ll need to account for surveys, fees, solicitors and much more; please keep it in mind, you might have to use part of the deposit to cover those costs.
No idea what these costs are? Check out this post for a full breakdown.
How much should your monthly mortgage cost be?
They say it should be no more than a third of your salary, and I think that’s a good reference point to keep in mind, even though it can often be difficult, I know.
Personally, we went for a longer mortgage (25 years) to give us a more manageable monthly cost.
Maximum budget Vs preferred budget
If you’re planning for a big upgrade, for example from a small one bed flat to a three bedroom house like we did, I would recommend you also estimate your future running cost (council tax, gas and electricity, water etc.), and make sure you can afford the life you’re trying to build. Websites like zoopla offer a good estimate of your future running costs.
Remember, you are likely to live in this house for many years and your circumstances might change: could you still afford it if you had to buy a new car? Have a child? Take time off work?
That’s why I have then calculated how much I would feel comfortable paying, i.e. my preferred budget – which is very different from my maximum budget.
The preferred budget is how much I could pay whilst living life comfortably and saving a little bit extra too. That’s the budget I have used when searching from my dream home!
Need help with budgeting? Check out my super easy budgeting strategy!
Prepare, prepare, prepare
Think carefully about the must and nice to haves in your dream house. Do your research well before you start hunting.
What are the things you can’t live without?
For us it was: a 3 bedroom house, close to the town centre and not more than 15 minutes’ walk to the train station
We knew we were happy to compromise on other things and thought it would have been easy to find the perfect place with so little requirements, right? Wrong.
We didn’t know the area we were interested in offered mainly flats or small two bedroom houses. Three beds houses in the town centre were rare and expensive. Two adjectives you don’t want in your house hunting vocabulary!
Use websites like Zoopla and Rightmove to set up notifications for houses matching your criteria and see how many results you get before you start dreaming.
Be realistic about your future
When I first moved to the UK, I imagined living in a Victorian house with brick walls, a wood burner and a bow window at the front where I could sit and read my book. A big garden at the back, with fruit trees and a pond.
Now, I am no DIY person, nor is my partner, and we soon realised it takes time, effort, commitment and passion to maintain that kind of property. As they say on Dragon’s Den, that’s not an investment for me and I am out.
Allow enough time
Whilst it’s true the buying process might only take 3 months, it might take a lot longer to find something you love.
Allow enough time to see plenty of properties, even some you’re not so sure of, to understand what you really want, but most importantly to find the one.
Unless you’re ready to settle for a house you hate because you haven’t got any time left? If you ask me, that’s a horrible situation to find yourself in and it will add unnecessary stress to an already very stressful time of your life.
Speak to the estate agencies
I spent weeks checking the adverts daily and contacting the estate agencies for a viewing with no result.
I couldn’t understand why by the time I contacted the agency to arrange a viewing most places were already off the market.
Why was it so difficult to get a viewing?
I was so frustrated, I felt like I was wasting my time.
What I didn’t know is that agencies email potential buyers with property details a few days before they put the advert online.
So I spent one Saturday morning going from one estate agency to the other (it does help that they are all on the same road) and explained what we were looking for. I repeated our requirements so many times I seriously considered renting for the rest of my life, but it was worth it!
From the following day I started receiving emails from the agents with properties to consider.
Yes, I had to filter – some agencies literally sent everything they had, even properties in other towns, but it was working.
And when I contacted them to arrange some viewing I wasn’t only a random name, but someone they met. And remembered.
From there we had weekends full of back to back viewings.
Don’t shop with your heart
Remember when I said “Do the math?”
You will thank me when you walk in the house of your dreams and it’s just above your preferred budget, like we did.
We arranged the viewing without too much expectations thinking, it’s expensive we just go and see what it is like – AND WE LOVED IT.
By the time we left I could already see myself drinking coffee in the morning whilst looking out in the garden and I had already decided which furniture would go where. I was sold.
Luckily, that house was still within our maximum budget.
I guess what I am trying to say is that, you will end up looking at houses that are more expensive than your budget so it’s better to have a bit of buffer to protect you from disappointment.
Don’t be shy
It feels so weird going in someone else’s house and check the water taps, windows and cupboards. It’s like an invasion of privacy and we know how people gets precious about their houses.
But not in this case.
They are selling and you are buying, that’s how it works: you would never purchase a car without a test drive, so why buying a house? Surely you can’t take a shower just to test the water pressure, but you can open the tap to check. Or try and open a window to see if it’s stiff or broken and whether the insulation is ok.
Also, arrange a second viewing. Don’t get pressured by the estate agent to make an offer after a 10 minutes viewing, like we did.
Don’t get an agreement in principle until you need it
Estate agents will pressure you into getting an Agreement in Principle (AiP) when starting your house hunt. Don’t listen to them. You only really need an AiP when your offer gets accepted.
What is an agreement in principle?
In simple terms, it’s the bank saying that, in principle, from a search they have done on you, they are happy to lend you a certain amount of money.
An agreement in principle is valid for only 60 to 90 days, but house hunting could take longer thant that. Most of the times, whenever you apply for an agreement in principle, the bank will run a credit check (referred to as ‘hard search’) on you, which will inevitably leave footprints that other lenders could see. Multiple checks done in a short period of time won’t put you in a good light.
What should you do?
Check for lenders who would run a ‘soft search’ that won’t leave footprints and won’t affect your credit score. We got one from Habito, an online mortgage broker, but some banks will offer a similar service.
Remember when the time comes you won’t have to get a mortgage from them, you can (and must!) shop around for the best deal.
Prepare your offer strategy
Congratulations! You’ve found a house you like and you’re ready to make an offer – but for how much?
The estate agent will warn you there has been a lot of interest and a few people are ready to make offers, so you have to be careful.
If you have done your homework at the beginning of your house hunt, you will know the real value of the property you are interested in, but if not check Zoopla and Rightmove for house sold prices in the area and then consider these questions before placing your offer:
- Are you likely to find something similar in this area or is this one of a kind?
- How long has the house been on the market for?
- How quickly do the vendor want to sell? Have they already identified where to move to?
- Did the survey show any defects that could impact the value of the house?
- Is there any work to be done?
Be also prepared to withdraw from the process if other offers make the price too high for you. This is a long term commitment and you need to be 100% comfortable with the price you will pay.
Enjoy the process
Last but not least, enjoy it!
This is an exciting time full of planning for the future, ideas and hope and you won’t likely (hopefully?) have to go through it again in the near future so savour every moment.