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Archive for July, 2015

Saving for a deposit on a property – 10 top tips to get onto the property ladder sooner.

Wednesday, July 15th, 2015

The biggest barriers to getting onto the property ladder in 2015 are raising the huge deposit that is needed to buy a property and passing the Mortgage Review questions.

 

If you are looking to buy a property in the South of England a first time buyer property will cost in the region of £200,000 and in the North £110,000.  With most lenders still requiring a deposit of at least 10% of the purchase price, this means that first time buyers will need to find a deposit of £20,000 in the South and £11,000 in the North. The cost of legal fees, moving fees, mortgage arrangement fees and in the South Stamp Duty can easily add £5,000 in the South and £3,000 in the North.  That’s an awful lot of money to save up and it is going to take determination and an acceptance that you will have to cut back to get onto the property.

 

My top tips below will help you to get onto the ladder more quickly and will also help you in your Mortgage review. Remember your future lender is looking to lend money to someone who doesn’t fritter their money away and affordability of the mortgage is scrutinised by the lender carefully.  They will go through your bank statements like a forensic scientist so clean them up now before you are ready to apply.

 

  1. Firstly, assess what your disposable income is. This is the money you have left after you have paid for essentials such as rent, utilities, food, and travel expenses. Write down on a sheet of paper your take home pay after tax and NI in one column and then list in another column your essential expenses. If you often wonder where your money goes to having a couple of bank statements to hand while you do this is useful.

 

  1. Now, weed out everything that is non-essential such as:

 

  • Gym membership – you can keep fit by walking and exercising or training at home. Give notice and cancel any memberships.
  • Beauty treatments. Manicures, pedicures, facials, tanning whilst lovely are all luxuries that you can’t afford if you want to buy a house. Invest in some home DIY products.
  • Media subscriptions. These can be costly – if you have a media subscription for films, TV etc then cancel or go onto a basic package.
  • Eating out. Whether a week end treat or your daily lunch buying food from a restaurant or café is expensive. Take a packed lunch to work, and invite friends to dinner instead of eating out.
  • Drinks at the pub. Try not to get into a ‘round’ buying your own is cheaper and you can keep tabs on what you are spending. Set a limit and stick to it.
  • New clothes. Set yourself a monthly budget for new clothes/shoes/accessories/make up. Go through your wardrobe and see what can be updated or re-invented with different accessories rather than buying new.

 

  1. Essential expenses can also be reduced. Go through everything you spend money on and see whether you can get a better deal i.e.

 

  • Mobile phone contract and insurance
  • Utilities such as electricity, gas, oil, telephone, media and broadband packages
  • Life insurance, car insurance, health insurance

 

  1. Down sizing. Are you renting privately? If so could you move in with parents, family or friends to cut your monthly overheads?  If not could you move to a smaller property that costs lest in rent and running costs in the short term until you are able to buy.

 

  1. Car. Do you own a car? Do you need it? Could you sell it to raise funds or perhaps down size to a less expensive car? If you drive to work could you car share?

 

  1. Belongings. There are a number of web sites that will buy your old clothes, mobiles, DVD’s, books etc. Go through all your belongings and list and photograph anything you don’t want and sell them online or at a boot sale. Put the proceeds towards your savings.

 

  1. Birthdays and Christmas. Sounds mercenary but ask friends and family to set a limit of what you spend on each other. These celebrations can cost hundreds of hard earned pounds.  By setting a limit you can still enjoy yourself while keeping costs under control.

 

  1. Holidays – if you are serious about buying your own home as soon as possible then you probably can’t afford to pay for a holiday. Look into holidays where you can work and get paid such as fruit picking in Europe or some of the Holiday Camps in the USA where you get paid for helping out. Alternatively, stay at home and offer to decorate, garden, wait on tables for extra money.

 

  1. Where to put your savings. Look for the highest interest accounts to put your savings into. Remember the Govt ISA coming out in August 2015 will help to boost your savings.  They will give you a £50 bonus for every £200 you save up to a maximum of £3,000.  Most high street lenders are offering the scheme.

 

  1. Shop around for your legal costs, mortgage costs, removals etc. Contact CMS who will help you to save money on all of these things.

 

Sharon Buthlay

Director

Conveyancing Marketing Services Ltd

01638 576478

07810 595 354

Sharon@cms-uk.co.uk

Top Tips When Buying A New-Build Home

Wednesday, July 1st, 2015

victorianAs the Government plans to build new-homes begins to take effect more and more new-build developments will be available for aspiring home owners.

There is nothing more tantalising than a brand new show home, especially designed by interior designers to maximise the space available. Fully carpeted, furnished and accessorised, even the table has been laid for a sophisticated dinner party. Who wouldn’t imagine moving in and living the life style portrayed?

Beware! From the moment you step into the office the pressure begins, these are slick sales people and their job is to get you to buy. Here are some of the tricks of the trade to watch out for:-

  1. Do your homework before you go to visit the site. Who is the developer? What is their reputation for building houses and finishing them on-time? How near is the development to transport, schools and the shops?
  2. If you are a first-time buyer take your parents or a trusted friend or family member with you – you will be pressured to buy and reserve a plot on the day.
  3. After you have viewed the show home, take a good look around the estate. Is it well planned, is there enough car parking (lack of parking is a major issue on new estates). Is there much communal space? Be aware that private communal space will eventually have to be maintained and paid for by the residents.
  4. Ask the site office for room measurements – developers buy especially sized, smaller furniture to make rooms look larger – your furniture may not fit. Check out storage – another major issue with new-build. Is there somewhere to put a push-chair or even the Hoover? Many developers maximise space under the stairs to make rooms look bigger and they don’t build in cupboards or wardrobes for the same reason.
  5. How big is the garden? Does it come turfed – often with a new-build you are left with a patch of bare mud.
  6. Ask what is included i.e. white goods, tiling, carpets etc. Do you get any say in the tiles, carpets, flooring etc? You will almost certainly be offered a deal on items to be included if you sign today – don’t give in to pressure, that deal will still be available next week!
  7. If you decide to buy, you will be asked to pay a reservation fee. Beware as often these are non-refundable if you change your mind. Check the small print and be aware that your deposit will go to the builder who will spend it on building the estate. I have recently spoken to two clients who have been seduced into paying thousands of pounds for ‘non-refundable’ reservations.
  8. What is the timescale for completion? Are any delays expected? A shortage of bricks has recently caused major delays in the building industry. If you appoint a good solicitor they will insist upon a long-stop completion date for you to ensure that you aren’t left hanging around for months and months waiting to move in.
  9. You will be pressured to use the developer’s chosen solicitor and mortgage provider. Don’t give in. Shop around – you want an independent solicitor who will put your interests first and you will get a better deal on costs if you shop around. The same thing with mortgages – use a good broker to shop for the whole of the mortgage market for you. The wrong mortgage or solicitor can be a very costly mistake.
  10. A bit further along the line your solicitor should insist that your exchange deposit be held by the developer’s solicitor and not paid to the builder. The builder won’t like this as they want to use your money to fund the development. That’s fine – unless they go into liquidation in which case you would lose your money.