How To Buy A House In Scotland
The house buying process can be quite daunting when starting on you journey- especially when friends and family recount their own horror stories of home-buying and the mortgage process. When I was trying to research buying my home, there was very little I could find online about the general process, and any guides that I did find often had steps missing. This hub will talk you through all of the necessary steps involved with buying your house in Scotland, and I'm sure the process isn't far too different in other parts of the UK.
Bear in mind that I had bought an older house, and there are some steps that are a bit different if buying a new build.
I am quite well aware of my mortgage options?
1- Review Your Finances
Before doing anything, try to review your finances. Your aim is to ensure your credit score is the best it can be for your mortgage application, as this will prevent any rejections from affecting it further. It is really important that you tidy up your finances as early as possible for a smooth mortgage process. You should also begin to think about saving for a deposit. Try to save as much as possible so that you have the best footing when it comes to securing your mortgage- if you have leftover cash, it will come in handy for decorating later!
2- Investigate Your Options
Doing your own research is the best way to understand the products that are on offer and discover the best mortgage option for you. Bear in mind that a mortgage that your friend has may not be the best option for you, so look over bank and building society websites to find out what is available for you. It is best to have an idea of how much is available to borrow as a maximum and also how much you can borrow and be able to afford the repayments. This also allows you to set a realistic budget moving forward.
As part of your investigation, it would be worthwhile making an appointment with a mortgage adviser to get some information on the best deals available. When looking at your options, be sure to consider the stability of the company as well as the interest rates and special offers.
** Top Tip **
I chose a lower mortgage than was available as I had calculated that the repayments were affordable, and maintainable should circumstances change.
For example, if either myself or my partner were to become unemployed, it would be possible to repay the mortgage on one salary.
3- Get A Mortgage Promise
A mortgage promise is a document which states how much you are able to apply for, and indicates that you are likely to be accepted for the mortgage, providing certain terms are completed at the time of application- ie subject to a deposit or clearing a certain debt. It is not a guarantee that you will get the mortgage approved, as there may be circumstances that crop up which mean a mortgage cannot be paid.
Having a mortgage promise can put you in a better position when making offers for properties as this shows that the funds are available. This is even more beneficial if you are a first time buyer as there is no property chain, and the seller is likely to accept an offer as it will result in a quick transaction with funds in place.
4- Start Home Hunting
You can now start looking for your perfect home as you have a better understanding of your budget and acceptability criteria for your mortgage.
Remember that if you are looking at new build properties you will have to arrange your own surveys, which can mean more of an initial outlay when you may not even get the house. If you go for an older property, the current owner has to provide a Home Report, which is done by an unbiased surveyor and highlights any potential issues with the property. To get the home report, you would contact the estate agents selling the house, and they can usually email this over to you. It is also a document you should keep for your mortgage consultation.
The Home Report allows you to know exactly what you are buying before you even consider putting any offers in, so be sure to read it carefully.
5- Make A Verbal Offer
Once you have found the property that You like, and you have ideally went for a viewing or two, you can make a verbal offer. The amount you offer is up-to yourself, but as a general rule, you should not pay more than the value of the property as stated on the Home Report.
The offer is usually made by yourself over the phone. It can also be done by a lawyer, should you have one already in your employment, however for most of us, this is the call we make ourselves.
Remember to stay confident, don't be too eager, and also try not to accept a counter proposal too quickly. Estate agents can sense that you're eager and will try to get as much as possible for the property.
You make your offer directly to the seller's estate agent, and they liaise with the seller to confirm acceptance. Remember that a verbal offer isn't necessarily legally binding, so you must act fast when this is accepted.
6- Employ A Solicitor
When your offer is accepted, you should then employ a solicitor to act on your behalf. The solicitor is there to ensure that your best interests are maintained throughout the transaction, and that any legal terms are checked thoroughly on your behalf. They also send your offer in writing to the seller's lawyer to secure the property. The seller can accept another offer at any point until the written offer is accepted.
Any further bargaining relating to the specifics of the sale- ie what is left at the property, will now be done between the solicitors. You will sometimes be contacted by your solicitor to check some details or terms before acting on your behalf.
I found my solicitor from...
7- Arrange The Mortgage
After the offer has been accepted, in writing, you will now have your serious mortgage meeting. To ensure a smooth mortgage process, ensure you are well prepared and all documents are available before the meeting. Remember bills, bank statements, payslips- anything that proves the financial obligations and other outgoings you spoke about in the mortgage promise meeting.
Remember, you can choose any bank to have the mortgage meeting with, not just the one where you got a promise, however it can be a bit easier to carry forward an application than begin a whole new one.
8- Arrange Insurance
It is usually a term of your mortgage that your property is insured. This is both building and contents insurance. You don't have to get your insurance with your mortgage provider, but I am of the opinion that they would want to protect their investment as much as possible, so would be more likely to payout if required. This is an opinion, and not based on fact, so feel free to take your products with other companies. Just be sure to check the small print!
9- Payment & Fund Transfer
The mortgage will be paid from the bank directly to your lawyer. The lawyer will then handle the transfer of funds, and the seller will usually be deposited with the funds approximately 3-5 working days before you get the keys.
It is also around this time that you settle any fees with your lawyer. It is not usually for any complications to occur after the transfer of funds, so the lawyer can give a bill at this point. If there are any complications later on, such as a query with the condition of the home, you will be billed for this separately.
10- Transfer of Deeds
Once everything has been finalised, the last step is the transfer of deeds and you get the keys.
The deeds are the papers relating to your house which point out your property line, as well as the details of when the house was constructed and other finer details. The deeds to our house were quite dated as we went for an older build, but the information on them is the same as more recent versions. These papers will go to the bank for safe keeping, and you will receive these upon full completion of repayment of your mortgage- a day to look forward to!
The keys are usually dropped at your lawyer's office, where you can arrange for delivery or pickup. All keys and copies should be submitted, however it is best practice to change the locks/ barrels as soon as you can.
11- Hard Work!!!
Now comes the hard bit. DIY, painting and general hard work!
Why not have a paint party as a housewarming? (if you don't mind a few wobbles) Or call on the experience of mum and dad! However it is done, It is nice to see the transformation of the property from being a house that you bought to your home.
Good luck, and enjoy your home!
© 2015 Lynsey Harte