What to consider when buying a home on your own
If you’re thinking of buying a home on your own, there may a few factors that have contributed to your decision:
- You’ve decided to strike out on your own and no longer live with your parents.
- You’ve had enough of the relative uncertainty and the rising costs of renting a place.
- You’ve come into some money – perhaps a maturing investment in your name, an inheritance, or a gift from the much-talked about and fabled Bank of Mum and Dad – and want to go out on your own by investing the money in bricks and mortar.
- You’ve been hit by a change of circumstances that you can’t avoid – such as a change in location of your job – and need to get your own home to meet the expectations derived from them.
Daunting though it is to set off on your own and going solo on purchasing a property, it’s probably more straightforward than you might have been fearing!
Here is an assessment of what to look out for from a financing point of view, the affordability and some of the associated issues that you need to be aware of to make the transition to solo homeowner as smooth as possible.
Is it the right decision?
It’s worth reflecting on the decision that you’re making to confirm that buying your own home is what you want to do – especially as you’re going to be on your own doing it.
There are some simple personal checks you can ask yourself:
- Is it really the right thing to do for you?
There are other options that should be considered as a priority:
- Can you move in with other relatives (or friends)? This should be a relatively short-term consideration depending on your relationship, of course, but it will certainly be a cheaper option than buying a property.
- Have you a partner you can share with? This really depends on where you are in your relationship, but two people contributing to the payments will be much cheaper than doing it on your own.
- Can you buy somewhere with a friend or a group? This takes a commitment with your friends, and you need to think about the longer-term position and what you want to do with your life.
- Is renting still an option? It depends on what you’re looking for and what the circumstances are for your need to find somewhere to live, but renting might still be a suitable option to explore.
- Is it the right time to own your own home?
Is it worth waiting to build up your deposit and look into affordability options in more detail? For instance, the more of a deposit you can afford, the less the monthly mortgage payments will be.
This needs to be fully balanced with the cost of the other options such as renting and the associated costs.
You might also want to consider the general state of the housing market to see what’s happening with house prices in the area you want to move to – if it is depressed, you might want to wait a bit longer as the prices might drop further; if it’s buoyant, you might want to step in now before prices go up further.
- Can you afford to take this step?
It’s not just about the cost of the bricks, mortar and roof-tiles; it’s also about the sundry costs that come with home-ownership such as council tax (bear in mind that, if you purchase as a single owner, you’ll be eligible for a single person discount, which you can find more information on with the local authority), travel costs, maintenance bills and the other expenses associated with living in your own property.
Going alone – the first steps
Exciting and scary in equal measures, you shouldn’t doubt your ability to embark on owning your own home, as long as you have the following in place:
- A mortgage lender.
Don’t worry if you’ve never dealt with banks, building societies or other mortgage institutions before. They are all professionals bound by a code to help you and give you the best advice regarding the most suitable products to meet your purposes.
And, provided you have the deposit and ability to pay the required amount each month, the lender will not worry that you are buying as a single person.
- Have you found the right home for you?
It is an exciting time looking for your first place, particularly if it marks your first step into independence, and therefore it is very easy to fall into the trap of picking the first property you see. And beware of your heart ruling your head.
Do a bit of research into the area and the types of properties that are available. Think about how much work you’re willing to put into it and whether you want to move in straight away or are willing to have some work done on a cheaper but more rundown property first. And, if you’re unsure, take someone you trust with you to view the property.
- A deposit for the property.
A percentage of the agreed asking price will be required and will be different according to the lender and to whatever agreement you’ve come to.
- Monthly mortgage payments agreed.
The lender can also provide a document to show that they agree in principle to lending you the value of the property to swiften the process of purchasing it.
This will also verify that they believe you are in a financial position to cover the monthly mortgage payments.
The right sort of mortgage will depend on your situation and will be assessed on your income and outgoings – obviously to verify that you can afford the repayments.
- A conveyancing solicitor.
There is nothing stopping you doing your own conveyancing, but it’s a complex business that requires a huge time investment to get it right.
It’s best to leave to the professionals like Best Value Conveyancing so that you can get on with the other aspects of purchasing the home and moving in.
What a conveyancing solicitor will do for you
The conveyancing solicitor you choose will handle the legal aspects of the transfer of ownership in the property (a process known as the conveyance).
Specifically, they will handle the following:
- The contract – The conveyancer will receive the associated legal documents from your seller’s solicitor and check the details.
- Land Registry titles – They will verify that it is the correct property you are buying as lodged with HM Land Registry.
- Searches – There are standard enquiries made about the property (drainage and water, local authority, environmental, etc.) to check any issues that might be associated with the property and its environs.
- Completion date – The solicitor will agree a completion date with the corresponding seller’s conveyancer and facilitate the exchange of contracts to reach that point.
- Enquiries – The conveyancer will ensure that all enquiries on the property, including those raised by you, are satisfactorily answered.
Conveyancing costs
There are many costs associated with the conveyancing process.
The common ones are:
- Solicitor’s fees – you should ensure you understand what these encompass by looking at the quote in detail.
- Lenders’ fees – the mortgage lender will need to verify the correct market value of the property against which you are borrowing, for which there will be a charge.
- Surveyor’s fees – the surveyor will provide a valuation estimate for the mortgage company.
- Stamp Duty Land Tax (for purchases in England) or Land Transaction Tax (for those in Wales) – this is a percentage based on the agreed asking price.
- Land Registry fees – to transfer ownership into your name.
- Searches fees – each search will require a fee to be completed by whichever organisation is providing the information.
- Electronic bank transfer fee – banks and financial organisations will require a fee for the transfer of the large sums involved.
- Leasehold management pack – a cost to cover pulling this information together if the property is not freehold but leasehold.
On top of these costs, you’ll also need to factor in VAT charges and sundry items such as utility provider fees (such as broadband and telephone connection) and physical removal costs to complete your budget for the whole move.
If you are at all worried about striking out on your own and are concerned about the whole homebuying process, why not give our friendly people at Best Value Conveyancing to provide guidance and help on the conveyancing?
