Grow Your Own Magazine

Hi peeps, esp. home-owning peeps.

We are looking at buying our first house together. I am confident of finding "the one" very soon - we've been looking at local properties for ages, and viewed a few.

Thing is, OH thinks he won't even approach a mortgage lender until we find "the one". It could take up to 8 weeks for a lender to do all the admin and offer the loan

I think that we should get the mortgage sorted as first priority, before we find "the one" so that we're in a position to say "here's the money, here's our offer".

What's your experience/advice?

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~ What do I think of Western civilisation? I think it would be a very good idea ~ Gandhi

hi two sheds, normaly an offer is valid for 3 months, depending on lender, maybe more with some, would make sense to have the offer of mortgage etc first incase you do find the one and the seller wants a quick sale, my opinion, but would get mortgage etc sorted, let us know how you get on x

Definitely, definitely, definitely get the mortgage sorted asap. You wont be tied in to anything, it costs you nothing and only takes a little bit of paperwork (which you'll have to do sooner or later anyway).

This will prove you are able to borrow the money (which is all the vendor needs to know) and could be the difference between getting the house you really want and missing out. It's called an 'offer in principle' and the mortgage company will give it to you without any details of the property you want to buy.

As mrsc2b says, the offer is valid for a given time but providing your circumstances (ie earnings) don't change, and the mortgage deal/rate is still being promoted, the time limit will probably be irrelevant.

Good luck - in my experience you'll know the right house as soon as you walk in the door!!!

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Resistance is fertile

If you get yourself a mortgage offer first, then as first-time buyers (and therefore chain-free) it should give you a bit of extra 'leverage' in negotiations. If not over price (but why not as 1st-time buyers are like gold-dust atm I imagine), then at least as a 'take it off the market and don't show anyone else' when you find your 'love-nest'.

Was listening to a Radio 4 finance prog a few days ago, depending on how you feel about knowing exactly what your mortgage payments are (ie Fixed) or whether you don't mind slight uncertainty, then Trackers are the way to go at present. They figure the BoE rate is still falling and so to take advantage of it you don't want to tie yourself into a Fixed mortgage just yet (if at all of course).

Edit - in my opinion although you might know the right house immediately don't get hung up on a 'bad deal'. Its a buyers market and although when considering your 'dream house' you don't think there'll be another, there most certainly will be. Stay in control of the deal, but remember you're buying someone else's home.

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Manda.

"Wouldn't it be nice
For maybe an hour
To not have a care."

Paul knows about these things, his dad's a bank manager...

I would certainly get an agreement in principle, it shows the estate agent and the seller that you are ready to exchange asap. If there's more than one party after a house, the seller will choose the one in the best position to buy quickly.

Best of luck with it - you're already in a strong position as you're not in a chain - but make sure your future vendor knows what a good bet you are as it could save you thousands.

I got gazumped on a house I loved (with a really big garden) by a buyer in a better position than me, and he actually offered less money to the tune of £7000 !!! If someone wants a quick sale then they will snap your offer up if you have everything in place.

January is a great time to buy as the market is slow. If you find a place you like, ask the estate agent how long it's been on the market. Statistically, if it's not sold in 4 to 6 months, they'll knock up to 20% off the asking price - and that's a lot of money to spend on plants!!! Or a third shed...

Just seen what Manda said about a tracker and I agree, the Bank of England base rate is predicted to be 5% soon.

Do wwhats right for you. We bought last year and we saw a house before we got a definate mortgage offer on what we could borrow and we'd set our heart on it..

At least if you get a mortgage quote you know what your limit is in house price. Also estate agents take you more seriously if you say you have already get a mortgage sorted

Good luck

Hi Two_Sheds

It's recommended to get an 'offer in principle' as Paul says. You owe them nothing and if you decide not to buy, nothing lost. But if you find somewhere you like you and your offer is accepted, then you can swiftly move along with the rest of the process.

Also, some buyers won't entertain offers if you don't have it. The guy I used to sit next to decided to do this. Not sure why though

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Shortie

"There are only two lasting bequests we can hope to give our children; one of these is roots, the other wings" - Hodding Carter

Good luck with the house hunting Two Sheds. I would agree with the majority that getting your offer shows you're in earnest and also shows them that you really can afford what you say you'll pay. My guess is that a garden will matter! Our 100ft garden was a big part of our decision to move here.

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Earth laughs in flowers. Ralph Waldo Emerson

www.vegheaven.blogspot.com

Updated November 30th - Mr Stinky's Excellent Adventure (and a Christmas Cake)

Best of luck!

Get your 'offer in principle', and also get a quote or two from some solicitors. You will need one for the conveyancing and many give a package deal for this service. Be prepared to run fast when you find what you want - a no-chain, mortgage in principle with solicitor ready is far more attractive to a seller that a first time, done nothing, going to drag it out for ever, don't know what I'm doing. Not that you are or intend to be, but impressions count.

Also be aware that a private search is generally no more expensive that a council/public search on a property and instead of 4-6 weeks waiting it comes back in around a week!

I know this because I had to move in under a fortnight while 7 months pregnant! The removals men were having kittens! (Not sure that Mum and Richard were any less worried!)

Do get a proper survey - I know it can be expensive but a 'house buyers report' may not cover everything you need to know.

Terry

Brilliant advice, I really appreciate it, esp. as you all agree with me !!
I looked at another three houses this morning and have a new favourite - and how spooky is this, it is called Middleton (a Grape knows what I mean)


PS. What a great site this is - I had looked on Money Saving Expert, but its really too big to look meaningfully for info, and some of the members are vile and nasty people.

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~ What do I think of Western civilisation? I think it would be a very good idea ~ Gandhi

Just a point on mortgages - I'd really really get an independent mortgage broker to find you the best deal.

When I re-mortgaged recently, I used one and although he cost me about £250, he not only did he find the best deal for me, but he SORTED ALL THE PAPERWORK OUT!

Anything that cuts down on stress when you are moving is a good thing!

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Hazel
www.hazelandjanesallotment.blogspot.com
update Tues 02/12/2008......End of year report!.....

Hi Terry

These last few months I thought you were male!

got 2 agree here, had one when bought ex out of the house, although have since changed as Mr C works for a bank and so we get staff rates etc

I think everyone else has said it Two Sheds, but the first thing you have to do is get your finance in place in principle. Otherwise you are just kidding on.

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From each according to his ability, to each according to his needs.

Terry short for Theresa! Happily married to Richard with two girls, Hazel and Philippa.

And two cats....
a tank of tropical fish.....
and five (!) hens......


Sorry to disapoint!

We have the same pets plus 1 corn snake! What breed of cats do you have? Ours are Moggies with some Main Coon in them. The're very cuddly.

There is no reason why you can't have a mortgage offer inside a week.

What is going to matter is your credit history, whether you have any missed payments/defaults/CCJ's. It's not a great time to be a first time buyer, a lot of lenders are now credit scoring and insisting on three months bank statements as well as being a lot more reluctant to to offer high loan to value deals.

You can't get a mortgage offer without a property, since the offer is based on yourself and the property. You can get an 'offer in principle' known in the trade as an AIP or a DIP which will be based on you the client i.e your credit history and deciding the most they would be willing to lend you.

If you have any technical questions on mortgages, fire away.

As am employee of a firm of independant financial advisers I would recommend using such a firm and getting an agreement in principle for a mortgage. A good mortgage adviser will not charge you as they will earn commission when your mortgage completes. All paperwork is completed on your behalf and any problems dealt with by them. If they are looking for a fee up front as well as the commission look elsewhere.

Sorry Borage, my post wasn't clear - the £250 which my mortgage man earned was a commission from the lender and not a fee. I believe that transparency in the financial 'rules' now say that the Client (i.e. me!) must be made aware of these things.

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Hazel
www.hazelandjanesallotment.blogspot.com
update Tues 02/12/2008......End of year report!.....

But, IFA's don't look at ALL mortgages do they? Only the ones on which they earn commission?
So we might miss out on a cheaper mortgage? (it's a minefield!)

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~ What do I think of Western civilisation? I think it would be a very good idea ~ Gandhi

When it comes to finance, there is no such thing as a free lunch. You pay for everything somewhere along the line.

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Kindest regards, David.

http://pigletsplots.blogspot.com/
updated - Sunday 19th at 2100hrs