When you're buying your first home, it's tempting to get swept up in the excitement and spend your time looking at new curtain fabrics rather than the nitty gritty of the process.
But there are some key aspects of buying a property that need to be addressed if you're going to avoid some of the common pitfalls of moving into your first home.
This is particularly true if you're a first-time buyer who is buying a flat as it is likely to be the first time that you're exposed to issues such ground rent - which can double in as little as a decade depending on the clause in your lease.
Issues around ground rents have led to families being stuck in toxic leasehold deals, something that has been highlighted in a Government report issued today.
Flats can come in all shapes and sizes, including a converted period property
These families bought leasehold houses rather than flats, but there have been calls for a complete overhaul of the entire leasehold system - including flats.
The House of Commons housing committee says there is no excuse for not helping the estimated 100,000 victims of the scandal.
Government figures suggest there are 4.2 million leasehold properties in England.
Here, we look at some of the most important questions you need to ask as you start out on your journey to buying a flat.
1. What's your budget?
You'd be surprised about how many first-time buyers will look at a flat and then decide on their budget rather than the other way around.
With restricted knowledge about their budget, these buyers will start looking through property listings around the price they think they can afford and then become disheartened when they later find out that they're way off the mark.
And don't forget to factor in additional costs to the price of the property, such as stamp duty and legal fees.
2. Have you got your mortgage approved?
To ensure that you don't become emotionally - and potentially financially - involved in buying a property that you cannot afford, make sure that you have the finance in place first.
Admittedly, obtaining a mortgage may not appear to be the most exciting of tasks, but it is essentially to ensure you don't trip up along the way.
The maximum you can afford will depend on a number of factors, such as your deposit and annual salary.
The majority of lenders will allow a maximum mortgage amount of 4.5 times your annual income, but will also factor into your spending and debt, and so it could be significantly less.
A mortgage deal will also depend on how large your deposit is, with the best rates reserved for those with the largest percentage.
For example, those who with a 20 per cent deposit can secure a rate of only 1.94 per cent on a five-year fixed-rate mortgage from Barclays.
It compares to 2.85 per cent via The Hanley Economic Building Society for those with a deposit of only 5 per cent.
It is important to examine as many options as possible and a mortgage broker can help you to do this.
There may be further restrictions if the property is a new-build flat - it is likely to require at least a 15 per cent deposit.
3. Will you be able to afford the monthly mortgage payments?
During the process of obtaining a mortgage, you will find out how much your monthly repayments are.
There is a responsibility on your lender to ensure that you can afford it before approving any deal, even if the Bank of England increases interest rates from their current level of only 0.75 per cent.
However, you may decide that you would rather not pay the amount stipulated - for example, it may be significantly more than you are currently spending on renting.
But you will only be able to make this decision once you know how much your new home will cost you every month.
The service management charge covers the costs of services provided to the communal areas
4. How long is left on the lease?
If you're buying a flat, the chances are that it is a leasehold property. This is where you lease the property from the freeholder to use the home for a number of years.
Leases tend to be long term, often 125 years - and even as high as 999 years.
However, it is important to check the exact term remaining as banks and building societies tend not to lend on properties with a lease of less than 70 years.
Also bare this in mind when you come to sell in the future.
A good solicitor will be worth their weight in gold, with the length of the lease being one of things they highlight.
5. Who is the freeholder?
This one is tempting to overlook, but it can have far reaching consequences depending on who it is.
For example, if it's a big company, do they have a hands-on approach and what is their track record with dealing with leaseholders?
Alternatively, a freeholder who is a one-man band may be so distant that they cannot be contacted if there are any issues.
Whoever it is, it is worth doing some research, such as on social media to see what other leaseholders have to say about them.
6. Do you contact the estate agent via email?
It is worth putting as much as possible of your communications with the estate agent on email, as opposed to discussing everything by phone.
This will provide you with a trail of questions and answers that you can refer back to if you forget any information about the property.
7. What is the service management charge?
If you are looking to buy a flat, there will be a service management charge to cover the costs of the services provided to the communal areas.
These services can include everything from garden landscaping to building insurance.
The charge is paid by the leaseholders to the freeholder (or the property management company that is party to the lease) and can vary considerably depending on the building.
It is important that you know how much the charge is a month so that it doesn't catch you out with your monthly budget.
There can also be large bills for unexpected structural issues.
8. What is the ground rent?
Similarly, it is important to know how much the ground rent will be and how much this will increase in the future.
Ground rent covers the 'rent' paid under the terms of a lease by the owner of a building to the owner of the land on which it is built.
Some properties have a peppercorn rent of perhaps only £100 a year, while others are required much more. The rent can also increase over time.
For example, a lease can stipulate that it increases 700 per cent every 21 years, which is a large jump from the £100 a year, if that is the amount currently paid.
It is important to check to the length of the lease as lenders don't tend to provide finance on those under 70 years
Link hienalouca.com
https://hienalouca.com/2019/03/19/eight-questions-every-first-time-buyer-must-ask-when-buying-a-flat/
Main photo article When you’re buying your first home, it’s tempting to get swept up in the excitement and spend your time looking at new curtain fabrics rather than the nitty gritty of the process.
But there are some key aspects of buying a property that need to be addressed if you’re going to...
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Emily Ratajkowski is a showman, on and off the stage. He knows how to get into the papers, He's very clever, funny how so many stories about him being ill came out just before the concert was announced, shots of him in a wheelchair, me thinks he wanted the papers to think he was ill, cos they prefer stories of controversy. Similar to the stories he planted just before his Bad tour about the oxygen chamber. Worked a treat lol. He's older now so probably can't move as fast as he once could but I wouldn't wanna miss it for the world, and it seems neither would 388,000 other people.
Dianne Reeves Online news HienaLouca
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