I
thought it was about time I followed up my 1st blog post with a 2nd one.
Thanks
to God, I managed to buy my 1st property in July so I've decided to provide a
brief breakdown on what the costs were and some key lessons learnt along the
way. Hopefully it will make young people realise that it is in fact feasible to
get on the property ladder at a young age. (I did it at 22)
Property
Price
Price
property advertised - £140,000
Initially
I offered £130,000 which got rejected
In
the end I negotiated for £135,000
Mortgage
I
would advise buyers to speak to a mortgage consultant before you begin house
hunting. It will give you a good idea on what you can afford and will help you
understand what your monthly costs are likely to be.
Luckily
I had an excellent mortgage adviser. I never had to speak with Halifax once as
the mortgage adviser sorted everything for me and kept me updated with any
information I needed to provide.
(My
mortgage repayments are £700 a month) – (I was saving £700 prior to the
mortgage)
Conveyancing (My
conveyancer seemed to be incompetent at times)
Responsibilities
include;
· Communication
with the sellers’ solicitor
· Legal
Work (I.e. Preparing contracts & searches)
· Registering
new owners with the Land registry
· Exchange
of Contracts
· All
monies due I.e. mortgage loan, stamp duty & search fees are paid to your
conveyancer who then pay all monies to the seller/HMRC
Basic
Costs
|
Cost
|
Price
|
|
My
deposit was 5%
|
£6750
|
|
Stamp
Duty 1%
|
£1350*
|
|
Conveyancing
|
£2352
|
|
Mortgage
adviser
|
£395
|
|
Halifax
product fee
|
£999
|
|
Halifax
Valuation fee
|
£315
|
|
TOTAL**
|
£12,161
|
*Halifax
were doing a deal at the time where they paid for stamp duty (I had to pay it
first then they refunded me the money)
**This
total doesn't include the cost of furnishing/refurbishing the property
How
long did it take?
I
think I was one of the lucky people as it only took me about two months to find
a property that met my needs/wants.
The
whole process (from my initial offer to completion took about 3 months.)
Key
Tips
1. It
is important to have all paperwork to hand as lenders will want to see
· 3
months pay slips
· Passport
· 3
months Bank statements
· Proof
of deposit
2. Don't
forget banks will only lend you approximately 4- 4.5 times your salary
3. Consider
adding someone's name to the mortgage if you don't earn enough to get a
suitable mortgage (however, please note that the banks have your best interest
at heart so do not add someone's name to your mortgage if you know you can't
afford the payments alone)
4. There
are several monthly costs involved with owning a property that need to be
considered e.g. mortgage, council tax, utility bills, service charge (if it’s a
flat) My total costs for the month (including travel, food & phone &
gym bill comes up to approximately £1300.(I think a good aim is to have at
least £500 left after all costs)
5. 3
months prior to applying for a mortgage be frugal with your spending. Lender
will want to see your spending habits and new rules coming in October mean your
bank statements will be under even more scrutiny
6. A
good conveyancer / solicitor with excellent communication is key. Ask for
recommendations. Don't just go for the cheapest deal!
7. LOCATION ... Consider present & future transport links. I.e.
Crossrail, local amenities etc.
Conclusion
In
total I spent approximately £14,000. In my opinion that is affordable and
achievable by many young people. (I have friends whose cars costs more than my
deposit)
Remember
you don't need to fully know how you're going to achieve something in order for
it to happen.
Work
hard & Stay Positive
