Before you buy your house, you should…
Buying your own place is one of the biggest milestones (and transactions!) you will experience in your life. It’s exciting – but it can be nerve-wracking, too. Therefore, it’s important that you think about as many factors as possible, before you ask your solicitor to make that offer on your behalf.
Work out how much you can afford on monthly bills
It’s time to budget and track your spending! Having a good idea of your current income and expenditure will give you an idea of how much you can afford to spend each month on mortgage repayments.
On top of the obvious costs of living, like food for example, you must take any subscriptions and memberships into consideration. Can you cut out or cut down on any of these?
You must also consider your social costs. Do you still want to be able to go to the pub every weekend or are you happy to pay a bit more towards your house and spend weekends in? You may also be able to cut your travel costs, therefore leaving more money to play with for monthly repayments, if you consider different locations.
Protect your financial input if you’re buying as a couple
(that’s a cohabitation agreement)
Buying property with your partner is an exciting step in your relationship. It’s easy to get caught up in the “dream home” chats and Pinterest-boarding. However, it’s important to know what could happen to your share of the investment if your relationship was to turn sour.
If you and your partner break up down the line and decide to sell the property, you may assume that you would get back your share of the deposit. Unfortunately, this doesn’t always happen! To protect your contribution to the house, you and your partner can sign a cohabitation agreement. We hope that you’ll never have to refer to the document in the future but having it will give both of you peace of mind and help to avoid potential conflict.
Consider putting money aside to renovate or decorate
Once you buy your new home, you’ll want to put your own personal stamp on it. This could mean trips to The Range, Ikea, and Homebase – so make sure you have a plan in place for how to pay for these changes!
It’s possible to make the place your own on a budget too – there are plenty of local charity shops selling upcycled furniture and decorative pieces to deck out your new abode with.
Aside from the aesthetics, having a budget for large-scale purchases like a new boiler or bathroom suites is advised. Having this put aside from the get-go means that you are ready for any unexpected costs as they arise. And, if you don’t need to make any large purchases or renovations immediately – you can then always add this cash to your decor budget!
Remember additional fees (like Land & Buildings Transaction Tax)
Land & Buildings Transaction Tax (LBTT) is the Scottish equivalent of Stamp Duty. It’s important to be aware of fees, like LBTT, before making a purchase. At the moment, the rate of LBTT is 2% on purchases between £145,000 and £250,000, increasing the higher the value of the property. If you are a first-time buyer, you can avail of a higher tax bracket – where you don’t have to pay LBTT unless your property exceeds the value of £175,000!
If you already own a property, and are looking to buy another, don’t be surprised when you are asked to pay the Additional Dwelling Supplement (ADS). This is a tax levied on those buying an additional property to the one they already own, whether it’s a private residence or a buy-to-let property. This tax is charged at 4% and is payable on the price of the additional property if you pay over £40,000 pounds for it.
Get a mortgage agreed in principle
A Mortgage in Principle is an estimation from a lender of how much money you can borrow to buy a house. Having a mortgage agreed in principle before starting your property-buying journey gives you an idea of how much money you have to spend on your new house. It also shows property sellers that you are organised and serious about buying, as it reduces the potential for timewasters.
There has been a lot of scaremongering in the news recently, which can put off even the most enthusiastic of buyers. Therefore, we recommend speaking to a few different mortgage brokers to get the full story. It’s not all doom and gloom; lenders are still lending, and buyers are still getting mortgages!
Get a feeling for areas you hadn’t considered
We get it – location is important and can be a highly influential factor in choosing your new home. You may have your heart set on a certain postcode, but it’s important to get out and about and check out other areas within your price range, too. Spend time in parks and go in search of quirky cafes to assess the noise and traffic levels in an area.
Research the local bars and restaurants to determine if the nightlife will suit what you’re looking for. Similarly, speak to friends and family and ask them if they have any recommendations for things to do that will give you a real feel for what could be your new stomping ground.
Are you the outdoorsy type who prefers hillwalking to throwing shapes in the local clubs? Get your walking boots on and explore the countryside! If you start to fall in love with an area you hadn’t first considered, think about whether you need to commute for work. What will the travel times be like? Are there decent public transport links?
Exploring new areas can give you a real feel for what life would be like there. You may find yourself ripping up your original plans and searching for a property somewhere new.
Make sure to visit areas that you like at different times of the day
Visiting areas at different times of the day gives you an idea of how busy the place gets in the mornings, or at night. What could seem like a tranquil escape during your lunch break may turn into an Ibiza weekender come 10pm! On the same note, make sure you visit both on weekdays and at the weekend. This can give you a feel for different activities that may be held in the area at different times of the week. Visiting the area at different times can give you a more well-rounded opinion of the locality and help to cement your property purchase decision.
So, there you have it. When you’re buying a property, there is more to it than the number of bedrooms or the size of the garden. There are so many things to think about before you part with your deposit. Remember to speak to friends and family to get their opinion on what it was like when they bought their home. They may have a few tips from their own experience too!
For straightforward legal advice on the property purchase process, contact our conveyancing team using the form below, or give us a call on 0131 555 7055. If you’re looking for your new home, Watermans also have a range of properties for sale.