Surveys – what you need to know
When you’re buying a new home, getting a survey done makes sense. You should choose a survey based on the condition of the property you’re proposing to buy. Don’t be swayed by the cost of the survey either. Money spent on a decent survey can save you a lot of money in unexpected repair costs down the line.
It’s important to note that a survey isn’t the same as a mortgage valuation report. A mortgage valuation is just your lender’s assessment of whether the property you’re proposing to buy is worth the money you’re paying for it. It won’t give you any information about the condition of the property. So, you’ll need to get a survey done as well.
You should make sure that your surveyor is a member of one of the two main governing bodies – the Royal Institution of Chartered Surveyors (RICS) or the Residential Property Surveyors Association (RPSA).
RICS offers three levels of survey:
RICS Condition Report: This is the cheapest and most basic option. It described the condition of the property and any urgent defects. It will also identify any legal problems. It’s most suitable for newly-built properties or conventional homes in good condition.
RICS Homebuyer Report: The next level up will help you to find out if there are any structural problems with the property, such as subsidence or damp. It will also let you know of any unwelcome problems outside. It doesn’t look beyond the floorboards or the walls, however. It’s suitable for conventional homes in reasonable condition.
RICS Building Survey: This is the most comprehensive survey and is suitable for all types of home. It’s also the most expensive, but it gives you an in-depth analysis of the property, highlights any repairs that may be needed as well as the likely costs. It’s good for larger or older properties or if you’re planning major works.
If your survey shows up any defects in the property, you could still decide to go ahead with the purchase but use the survey evidence to renegotiate how much you’re offering for it.
Sellers in Scotland have to have a Home Report to show potential buyers, which might include a survey by a RICS surveyor. Some properties, such as new builds, don’t have to have Home Report, but you should still consider getting a survey carried out.
Why your credit score matters
Before you can buy your own home, lenders will want to know that you won’t default on your payments. They will check your credit score and if you don’t have a good credit history, they could consider it risky to lend you money. They might either refuse to lend you the money at all, or they might offer to lend you the money but at higher interest rates.
What can you do about it? The first thing is to make sure you’re registered to vote. If your name isn’t on the electoral roll, you’ll find it much harder to get a mortgage. Next, make sure you pay your bills on time, especially things like utility bills. This is a great way to prove to lenders that you can manage your finances.
You can check your credit report too. There are three main credit scoring agencies in the UK and they will all hold information about you: Experian, Equifax and TransUnion. Even small errors can cause big problems, so it’s worth checking your report before you apply for a mortgage. The agencies offer free access to your full report and credit score.
What are the main stages in buying a property?
A buy-to-let mortgage is designed especially for people who want to buy a property and then let it out as an investment, rather than living in it. The rising cost of property in the UK together with a buoyant lettings market has made investing in property an attractive proposition for many people.
If you’re buying to let, you’ll probably need to find a bigger deposit than you might for a regular mortgage – typically between 25% and 40%. Interest-only mortgages are available as an option for buy-to-let, with the borrowers paying the interest on the loan from the rent they collect. The capital is then paid back to the lender at the end of the mortgage term.
A remortgage is when you take out a new mortgage on a property you already own, or one you’re buying with an existing mortgage.
There are lots of reasons why you might choose to do this. If your existing mortgage deal has come to an end, you might want to look for another advantageous deal. If your home has increased in value, you could release some money from the equity tied up in your home. Or maybe you want to shorten the term of your mortgage.
A mortgage is a loan secured against your home or property. Your home or property may be repossessed if you do not keep up the repayments on your mortgage or any other debt secured on it.