It is said that moving house is one of the most stressful things you can do. Currently, I would agree with that, and the process is just starting!
I'll admit my situation is unique- my mum is selling her house, gifting money to me, I'm getting a mortgage and we are going to purchase a town house and live together but also on separate floors. The current housing market in the UK makes it virtually impossible for a single person to buy on their own- unless it's under a shared ownership scheme which seems to have more pitfalls than benefits.
This post is the journey from starting the house hunting process to hopefully moving in to our new property. So far, we've already encountered situations we'd never even considered, have stumbled over many hurdles and got through a lot of tears, frustration, wine and snacks.
The moving process first started last October, when whilst browsing on RightMove, I stumbled across a little apartment that looked cool. I'd been saving for a house deposit for about 10 years and had clubbed together a deposit of over 10% of the apartment price- the standard suggested deposit. I booked a viewing, fell in love with it and put in an offer which was accepted. Then the rose-tinted glasses came off. I couldn't get a mortgage big enough. In fact, I could only get a mortgage worth half of what I needed- despite potentially being able to build up to a 20% deposit.
Whilst daydreaming one day, I had a lightbulb moment- my mum was planning on renting out her house and moving in with me to help with my mortgage repayments if I'd got the apartment- I thought, what if we put the proceeds from the sale of her house as a deposit, which would mean I could get a smaller mortgage? We started looking at townhouses so we could have a communal ground floor, and then a floor each. And some were within our price range. A new plan was formed.
Fast forward 5 months later, we have found a place, had an offer on my mum's house and are currently filling in form after form for the solicitors. We've still got a long way to go before we hopefully move in, but already I've learned a lot of what NOT to do when trying to buy a house:
DON'T EVEN BEGIN TO VIEW HOUSES UNTIL YOU KNOW HOW MUCH MORTGAGE YOU CAN GET!!! This is the most important bit of info I wish I'd known.
If I'd have known I couldn't get enough mortgage, I would never even have looked at that little apartment. When selling my mum's house, someone put in an offer which we accepted but then they hadn't consulted a mortgage adviser, and found out they couldn't borrow as much as they needed.
Don't go looking at houses you think you can afford, fall in love with it then find out you can't borrow enough.
Help to Buy schemes advertise that you can use a 5% deposit, while mortgage calculators only tell you the repayments- there's not much information that informs you there's a multiplier based on your salary and a limit on how much you can borrow. It might seem naive, but I saw a mortgage adviser who never mentioned it and neither did any website online I looked at.
The current multiplier is 4.5x your yearly salary. Which for someone on £25,000 means they can only borrow £112,500, which given most apartments start at about £180,000, this requires a deposit of £68,000- well above the "10% standard deposit".
IF YOU'RE BUYING ON YOUR OWN, YOU WILL NEED A SUBSTANTIAL DEPOSIT
Not only will you have only one salary to calculate from, as you'll likely not be able to borrow much means you'll need a big deposit. Based on the apartment I looked at, had I gone for the piddly mortgage I could get, I would have needed a deposit of £137,000. Even at the rate I was saving, I would probably be retired before I hit that.
I didn't have any family that could help out financially and the mortgage repayments for one person are difficult.
DON'T BECOME SELF-EMPLOYED IF YOU'RE PLANNING ON GETTING A MORTGAGE WITHIN THE NEXT YEAR.
Even if you hate your employed job, hang in there until the mortgage is approved- then you can hand your notice in. If you're self-employed you need 2 years of accounts filed with HMRC to get a mortgage, whereas if you're employed, you only need the last 3 months payslips...
MOST SOLICITORS WILL WANT A ONE-OFF PAYMENT BEFORE THEY START.
I had to pay £300 before the solicitors even started their work. Make sure you have this to hand. Also, make sure you find a solicitor that operates a payment on exchange policy, so you're not paying out if the sale/purchase falls through.
ADMIN COSTS
Purchasing: Solicitors fees- start at £1500
Stamp duty- £0 for first time buyers on the first £300,000 of the house value, then 5% of the remaining balance.
- For non-first-time buyers, the calculations are complicated. Use the government website for their calculator.
Removals- Can vary between £500-£1500
Surveys-Start from £400
Mortgage survey fee- Even if you don't have a survey done, the mortgage company still will. This starts from about £200.
Selling: Estate Agents fees- Usually between 1%- 1.5% of the agreed price of the sale (plus VAT of 20%)
Solicitors fees- Based on the value of your home. For a house worth £240,000 approx £900
Survey issues- Problems will arise with the survey that you may need to negotiate with the buyer and repair/address.
KEEP A PROPORTION OF YOUR DEPOSIT BACK FOR UNEXPECTED ADMIN FEES (AND HOME IMPROVEMENTS)
There will be other costs that are unexpected, issues flagged up on surveys and negotiations, as well as changes you will want to make to your new property. If you can, keep back £4,000-5,000 of your deposit, do.
I'm sure more finance points and issues will arise throughout the process- will keep you posted.
Comment below any dos and don'ts re: finance and mortgages you've encountered!
xx
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