Buying
a House - Mortgage Information
What
is Involved in Buying a House?
The
first thing you need to decide when you buy your new home is what
sort of area you want to live in. Make a list of the things that
matter, such as: having a good school nearby for your children,
good or convenient local transport links and shops or restaurants.
The
following list includes a number of factors likely to assist you
in making your choice of where to move to:
- Distance
from Work and travelling time
- Distance
from Amenities (Schools, Shops, restaurants, hospitals and transport
links)
- Quality
of Amenities
- Local
environment rural or urban
- Relative
cost of housing
Steps in the legal work of buying a property
Although
it is impossible to give a precise idea of how long the legal work
involved in buying a property takes, it is possible to offer guidelines.
From having an offer accepted to exchange of contracts can take
up to seven weeks and from exchange of contracts to completion can
take up to four more weeks. However, if there are any problems the
time taken may be longer.
Enquiries
made by the solicitor or, in England and Wales, licensed conveyancer
Once
you have instructed the solicitor or, in England and Wales, a conveyancer,
the seller’s solicitor or the licensed conveyancer draws up
a contract which will eventually be signed by you and the seller.
But before the contract can be signed, your solicitor or licensed
conveyancer must make sure that there are no problems with the ownership
of the property, rights of way, access, or future developments in
the area that might affect the property. This is called ‘making
enquiries and searches’. The solicitor or licensed conveyancer
makes the enquiries and searches.
local searches
These
are enquiries made to the local authority (or in Northern Ireland,
the appropriate government department) about any matters which affect
the property which involve the local authority, such as whether
there is a compulsory purchase order on the property. Local searches
also include questions about any proposed changes or development
in the area that might affect the property such as roads, housing,
shops. During the local search, the local Land Charges Register
(Registry of Deeds in Northern Ireland) is also checked. This gives
information about any matter which affects the property such as
tree preservation orders, if it is a listed building or in a conservation
area; and enquiries made to the seller by the solicitor or, in England
and Wales, a licensed conveyancer. These are a set of standard questions
about the property, boundaries, neighbour disputes and fixtures
and fittings that will remain in the property. There may also be
additional questions that the solicitor or licensed conveyancer
thinks are necessary, such as the transferability of guarantees
for any work done on the house, for example, a damp proof course;
and from the Land Registry.
Arranging to pay the 10% deposit
Whilst
the solicitor or, in England and Wales, a licensed conveyancer is
making the enquiries, you should sort out how you will pay the deposit
that has to be made when the contracts are exchanged. This deposit
is usually 10% of the price of the home. However, it is sometimes
possible to come to an agreement to pay a smaller deposit. If you
are also selling a house it is usually possible to put the 10% deposit
on the property being sold towards the deposit on the property you
are buying.
If
you are unable to provide the 10% deposit it is possible to use
a ‘deposit guarantee scheme’. Your solicitor or licensed
conveyancer can arrange this with an insurance company. If raising
the deposit may be a problem, you should discuss the options with
your solicitor or licensed conveyancer.
Alternatively,
you could consider borrowing the money for the deposit from elsewhere,
for example, from relatives or a bridging loan from a bank. However,
the amount of interest you will have to pay for a bridging loan
will be high and you should check how much this arrangement will
cost.
Insuring
the property
You
should make sure that buildings insurance is arranged from the date
of exchange, because once contracts have been exchanged you are
responsible for the property. You may be able to get information
on buildings insurance from your mortgage lender, solicitor or,
in England and Wales, a licensed conveyancer.
Exchange of contracts
The
final contract between you and the seller is prepared when:
- the
solicitor (or licensed conveyancer) and you are satisfied with
the final outcome of all the enquiries
- any
surveyor’s report has been received and any necessary action
taken
- the
formal mortgage offer has been received
- arrangements
about the payment of the 10% deposit have been made
- the
date of completion has been agreed
You
and the seller each have a copy of the final contract which you
must sign. These signed contracts are then exchanged. At exchange
of contracts both you and the seller are legally bound by the contract
and the sale of the house has to go ahead.
You
should make arrangements for the supply of gas, electricity and
telephone service and make sure that the seller is arranging for
final meter readings to be made.
Completion
Completion
of the purchase usually takes place about four weeks after exchange
of contracts. On the day agreed for completion:-
- the
mortgage lender releases the money
- the
deeds to the property are handed over to your solicitor or licensed
conveyancer
- the
seller must hand over the keys and leave the property by an agreed
time
The
solicitor or licensed conveyancer (in England and Wales only) will
usually send their account to you on, or soon after, the completion
date.
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Citizens Advice
All Rights Reserved
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