FIRST TIME BUYERS – by Luke Doonan
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PostPosted: Tue Nov 25, 2008 9:48 am    Post subject: FIRST TIME BUYERS – by Luke Doonan Reply with quote

I can clearly remember being a first time buyer, back in the good old days when a studio flat could cost as little as £37,000.00 and the parking was thrown in free… I had no idea of the buying process, who would do what, what the solicitor did or indeed what I had to do! Just the thought of employing a solicitor was very daunting, and then once I had the solicitor, masses of extra large envelopes came flooding through the letterbox with all types of strange paperwork, some dating back 100 years, there were plans sketches, copies of neighbour disputes and all sorts of detailed local information and planning information… If that was not all enough, if you are buying a flat, it is more than likely to have a lease agreement between the purchaser and the freeholder, another agreement with the management company who looks after the everyday running of the block and gardens etc…It is probably more paperwork than we all receive in the average year through our letter boxes!
I know I thought WHAT AM I DOING HERE… Signing an agreement to take the responsibility of whatever it said in the lease but more importantly signing up for a commitment for 25 years to make the mortgage payments every month, as well as a monthly service charge for the upkeep of the block…
Well I must say I am very happy I made that decision to go ahead all those years ago, as property is now my main business, however I feel very passionately for first time buyers who can be very misinformed when it comes to buying their first home. There are two main initial contacts, the agent and the mortgage broker or mortgage company, not all estate agents are bad (I was one for 10 years) however I still constantly hear nightmare stories from a lot of first time buyers who were given wrong or misleading information, sadly it is not just estate agents who can mislead new buyers, many mortgage brokers receive generous commissions from the mortgage companies for new business so it is imperative that you are made aware of all the costs and commissions from the mortgage company and mortgage broker.
We in the UK love property, I could confidently say that we are actually obsessed with it and most of us want to own our own home, it amazes me that people spend more time looking at a new car or planning a holiday than we doing planning the biggest financial purchase of our life’s…
Without sounding too old, in days gone by, if you wanted to buy your first home, you would SAVE SAVE SAVE and then (and only then) you would speak to your local bank manager and they would arrange the mortgage and deal with any issues as they arrive (I am a fan of personal contact which sadly we seem to be losing through call centres) nowadays or up until now, you could fill in a basic form and the next thing you know, you are a home owner, yes it is an amazing feeling and makes you feel so independent but I do not believe that we as a nation should be pushing all our young school leavers to be instant home owners, nor do I believe that buying and having the responsibility of a mortgage is a must for everyone…
My initial advice for anyone thinking of buying for the first time is to be totally realistic about what you can and cannot afford and stick to it! You must not be seduced by low mortgage rates that will expire within a year or so… Work out how much your payments will be to start with and will be at the end of the initial term… It sounds really boring but YOU MUST READ THE SMALL PRINT… Lots of mortgages revert to higher rates and awkward lock in periods that mean you are stuck paying a much higher amount for anything up to 5 years!!! CAN YOU AFFORD IT?
I totally understand that money is tight when purchasing a property for the first time, however… whatever small amounts you can save, put away in a savings account, just in case you lose your job or run into difficulties at a later stage…
Once you have your budget in place and hopefully a mortgage offer in principal, make a detailed list of everything you want from a property, research the area and type of property you are looking for a minimum of three to six months at least, this will get you used to the local agents and hopefully establish a trusting relationship, it will also get you familiar with the local prices and what properties are selling for at that time, I would also advise anyone buying to try and build a good relationship with the vendor (person selling) again it is all about personality and trust, the vendor is more likely to get the place cleaned and even leave a few goodies if they like the person buying…
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