Around 7 out of 10 Brits find buying or selling a house nerve-wracking, according to research from Which? Mortgage Advisers at the start of 2016¹. In all the stress and commotion, it can be easy to forget some things on your to-do list, so are you confident you’ve remembered the following 4 essentials?
Check your credit report
Before you do anything, you need to make sure that you’re actually in a good position to get a mortgage. Check your free credit report to make sure all your accounts are up-to-date, you don’t have any outstanding debt and there aren’t any factors that could be negatively affecting your report and score. Having a good credit rating is important during the house buying process to increase your chances of being approved by mortgage lenders and to secure a good interest rate, so don’t forget to keep on top of your credit report.
Mortgage lenders like to see you’ve got life insurance so that if you pass away, they can rest assured there will be a sum available to pay off your mortgage. This is particularly important if you’re the main bread winner in your household and it will help to give both you and your loved ones peace of mind that they’re financially covered if the worst happens.
Once you’ve found a good policy, you simply pay monthly or annual premiums to ensure that an amount agreed by you and your insurer is paid to your next of kin, loved ones or ‘estate’ when you die. Money from this pot can then be used to make mortgage payments.
There’s also the option to take out mortgage-specific life insurance, which is a type of cover that will only pay-out a sum equal to your outstanding mortgage debt.
It’s important to look into the different options available and the different payment terms you can choose from. Our piece on ‘What you need to know about life insurance‘ is a good place to start.
While some conveyancing solicitors will include a stamp duty calculation in their quote, you can’t guarantee that this will be taken care of for you. Even if your solicitor will deal with it, it helps to have a rough idea of how much it’s going to cost before you get too far down the house buying process to ensure you’ve actually got the money you need available.
Gov.uk has lots of information about stamp duty, as well as a stamp duty calculator so you can work out what you’ll owe. It’s worth playing around with the calculator once you have an idea of your budget so you can work out how much money you might need to cover stamp duty costs.
If you’ve bought a house before you’re more likely to remember this, but for first time buyers, property searches could be a whole new world that you’ll need to get your head around.
When you find a conveyancing solicitor and make an offer on a house, your solicitor will carry out a series of searches on the property for you. These aren’t always included in the initial quote, or some of them are but other important ones won’t be. If you’re buying a home, you’ll probably want the following searches completed:
- Local authority
- Water and drainage
There are other searches that can be conducted but whether or not you ask for them to be done will depend on the property you’re trying to buy. These searchers are:
- Commons registration (if your home borders common land, a village green or a rural area)
- Mining (if a property is in an area where there either is mining or used to be mining)
- Chancel repair liability (if the home sits within the parish of a church)
- Land charges (if the land is unregistered)
Making sure you don’t come unstuck
If you know everything you need to do going into the house buying process, it becomes a lot less stressful. It goes without saying, but do your research to discover or remind yourself of all the little processes and ‘must-haves’ before you jump in. Spending a few hours getting in the know could save you lots of worry and even money.
¹Data based on a survey of 2,000 people by Which? Mortgage Advisers.