How ‘Help to Buy’ Helped Me

As part of our series of blogs on the property market, we decided to provide an insight into the story of Roland John and his journey to buying his 1st home with the government ‘Help to Buy‘ scheme.

“I managed to buy my 1st property in July so I’ve decided to provide a brief breakdown on what the costs were and some of the key lessons I learnt along the way. Hopefully it will make young people realise that it is in fact feasible to get on the property ladder at a young age, I did it at 22.

Property Price

  • Price property advertised – £140,000
  • Initially I offered £130,000 which got rejected
  • Ultimately I negotiated for £135,000

Mortgage

I would advise buyers to speak to a mortgage consultant before you begin house hunting, this will give you a good idea on what you can afford and it will help you understand how much your monthly costs are likely to be. Fortunately,I had an excellent mortgage adviser, I never had to speak with Halifax once as the mortgage adviser sorted everything for me and kept me updated with any information I needed to provide.My mortgage repayments are £700 a month roughly equal to the £700 I was saving prior to the mortgage. In addition to a mortgage adviser I also used the help of a conveyancer, who to be honest didseem to be incompetent at times.

Conveyancer responsibilities include:

  • Communication with the sellers’ solicitor
  • Legal work (i.e. preparing contracts & searches)
  • Registering new owners with the land registry
  • Exchange of contracts
  • All monies due i.e. mortgage loan, stamp duty & search fees are paid to your conveyancer who then pay all monies to the seller/HMRC

Basic Costs
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Cost
Price
My deposit was 5%
£6750
Stamp Duty 1%
£1350*
Conveyancing
£2352
Mortgage adviser
£395
Halifax product fee
£999
Halifax Valuation fee
£315
TOTAL**
£12,161

*Halifax were doing a deal at the time where they paid for the stamp duty (I had to pay it first then they refunded me the money)

**The total does not include the cost of furnishing/refurbishing the property

How long did it take?

I think I was one of the lucky people as it only took around two months to find a property that suited my needs/wants.

The entire process from my initial offer to completion took about 3 months.

Key Tips

1. It is important to have all paperwork on hand as lenders will want to see:

  • 3 months pay slips
  • Passport
  • 3 months bank statements
  • Proof of deposit

2.Do not forget banks will only lend you approximately 4- 4.5 times your salary

3.Consider adding someone’s name to the mortgage if you don’t earn enough to get a suitable mortgage , however, please note that banks have your best interest at heart so only add someone’s name to your mortgage if you know you can’t afford the payments alone.

4.There are several monthly costs involved with owning a property that need to be considered e.g. mortgage, council tax, utility bills, service charge (if it’s a flat). My total costs for the month including travel, food & phone & gym bills are approximately £1300. I think a good aim is to have at least £500 left after all costs.

5.3 months prior to applying for a mortgage try to ensure you are frugal with your spending. Your lender will want to see your spending habits and new rules coming in October mean your bank statements will be under even more scrutiny.

6.A good conveyancer / solicitor with excellent communication is key. Ask for recommendations and do not just go for the cheapest deal!

http://www.theguardian.com/money/2013/feb/15/choosing-conveyancer-2013

7.LOCATION … Consider present & future transport links. i.e. Crossrail, local amenities etc.

Conclusion

In total I spent approximately £14,000. In my opinion that is affordable and achievable by many young people, I have friends who own cars that cost more than my deposit.

Remember you don’t need to fully know how you’re going to achieve something in order for it to happen.”

By Roland John

Photo:http://business-reporter.co.uk

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