Being an estate agents in Birmingham, we would argue that buying a property is one of the most exciting moments in your life. But for some, it can also be one of the most stressful. Therefore, we have put together this article in the hope that we can alleviate some of that stress and help you avoid some of the most common mistakes that people make when buying a property.
1. Failing to check your credit score
If we could only give you one tip before buying a property if you plan to do so via a mortgage, it would be to check your credit score. Mortgage providers will assess this score, among other things, to determine if they want to loan you their money to buy a property. If your credit score doesn’t meet their requirements, your application will be rejected, which could further damage your credit score.
However, you won’t be penalised for checking your credit score yourself. If you want to check your credit score for free, you should visit Experian where they will provide a detailed report that will help you to understand and potentially improve your score.
2. Failing to get a decision in principle from your mortgage provider
A decision in principle (DIP) refers to how much of a loan your mortgage provider is prepared to let you borrow in order to buy a property. There might be a significant difference between what you believe you can afford and what a mortgage provider is prepared to borrow you. Therefore, it is essential to have a DIP in place before you start property hunting so that you have a realistic idea of what you will be able to buy.
Alternatively, if you don’t have a DIP in place, you run the risk of falling in love with a property but then being heartbroken when your mortgage provider decides that they aren’t willing to borrow you the money in the first place. Additionally, bear in mind that after submitting a mortgage application to your provider, it can take over a month before you find out whether your application has been approved. In which time, the seller will likely accept another offer for their property from someone that already has a DIP in place.
3. Not researching the best mortgage for you
Don’t be fooled into thinking that your bank is more likely to approve of your mortgage application because you're an existing customer. You will face the same stringent assessment as Joe Bloggs off the street, and by not doing your research, you could find yourself with a mortgage provider that doesn’t provide any flexibility if you were to ever encounter difficult times later on.
Before committing yourself to a mortgage provider, compare the interest rates but also consider whether those rates are going to increase further down the line. We would recommend choosing a mortgage provider with a fixed interest rate so that you are better able to budget for all your other expenses.
4. Not taking into account other costs and expenses
Speaking of other expenses, mortgages aren’t the only payments you should consider when buying a property. For instance, during the buying process, other than the legal fees paid to your solicitor, once your offer has been accepted, it would be wise to hire a surveyor to inspect the condition of the property.
Additionally, once you have officially bought the property, you will have to pay a stamp duty tax which varies based on the price of the property and whether or not you are a first-time buyer. For example, as of July 2021, if you were to buy a property for £200,000, but you weren’t a first time buyer, you would have to pay an additional 3.5% tax which equates to £7,000. For a detailed overview of stamp duty charges, visit the Money Saving Experts here.
Other costs that catch people out after they’ve bought a property include council tax, buildings insurance and content insurance. Make sure to factor in these monthly expenses on top of your mortgage before buying a property. We would recommend overestimating these costs and having money to spare just in case you leave yourself short.
5. Failing to inspect the property
So, you’ve got your mortgage approved, you’ve budgeted for stamp duty and all the household bills and insurance, and now we’re recommending that you spend more money on a surveyor to inspect the property once your offer has been accepted. But trust us, it’s worth it. The last thing you want is to get stuck with a property that’s going to require expensive repairs.
The Royal Institution of Chartered Surveyors (RICS) offer a range of surveys depending on how extensive the inspection is. Factors to consider when deciding which report to buy include the age and condition of the property, and whether it has had significant alterations since it was built.
On top of the surveyor’s inspection, there are several things you should look out for when you view the property, such as damp on the walls, rot in the woodwork and whether any furniture is hiding any defects. It is also worth flushing all the toilets to check for plumbing problems and switching the lights on and off to check electrics.
6. Failing to research the area
Inspecting the property you’re thinking of buying shouldn’t be your only focus. We highly recommend visiting the area on different days of the week and at different times of the day in order to have a more complete picture of where the property is situated.
Thinking about what’s most important to you should be considered too. Is there a wide range of shops, bars, and restaurants nearby? Do you need to commute to work and therefore require good transport links? Do you have children and, as a result, need to weigh up the quality of the schools nearby?
We would also recommend that you research if there are any development plans scheduled in the area, as well as whether the value of the properties in the area have been on the rise or decline. If property prices in the area have been on the decline and that pattern is expected to continue, that won’t bode well for you when it comes to selling that property in the future.
If you’re thinking of or are in the process of buying a property and would like some free advice from an estate agents in Birmingham, we are more than willing to help. Buying a property isn’t a decision you should ever take lightly and can be a daunting experience, especially if you’re a first time buyer. Therefore, we suggest getting as much advice as you possibly can so that you can avoid any future headaches.
If indeed you decide that you need an estate agents in Birmingham, contact Matthews Estate Agents using the contact details below or visit our website here to find out more about us and what we can offer you.
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