I moved into my house just over two years ago now, and although I document my DIY progress on a weekly basis, I don\u2019t often talk about the process of buying the house itself. However, it\u2019s something lots of my followers ask me about and it\u2019s definitely a topic I wish I knew more about at the time, so I\u2019ve teamed up with The Nottingham (who are my mortgage provider) to answer my most frequently asked questions when it comes to property purchase. <\/p>\n\n\n\n
From saving for a deposit to working out just how much of a deposit you\u2019ll need, hopefully this blog post will answer some of your top questions when it comes to property purchase. Let’s get stuck in…!<\/p>\n\n\n\n
1. I\u2019ve been working towards a 10% deposit but now I\u2019m hearing it has to be at least 20% deposit, is this true? \/ I\u2019ve just put down a 15% deposit on my house because of Covid, is this the same with every mortgage provider?<\/strong> The mortgage deal that you will eventually end up on is dependent on lots of things like your personal credit history, the price of the property you want to buy, where you are in the country, whether you\u2019re buying with another person and how much deposit you have. <\/p>\n\n\n\n The more deposit you have, the more mortgage deals you will have access to, regardless of the current circumstances, this has always been the case. It\u2019s easy to get caught up in the cost of a deposit, but a lot of people forget to consider the cost of monthly repayments too. To answer the question \u2013 we did something in the middle but there\u2019s no right or wrong answer, it\u2019s totally up to you and how you can handle renovation work! We bought a property that was well priced but also didn\u2019t need an awful lot of work, just cosmetic, so we didn\u2019t have to fork out for costly renovations as soon as we moved in.<\/p>\n\n\n\n 3. What are the best areas in Liverpool for a first time buyer? We originally looked around the city centre and South Liverpool, but the apartments and terraced houses in that area were really expensive and lots needed a lot of work. Where I live is well priced, not too far from the city centre via bus or car, has a lovely little village full of restaurants and bars, an amazing park on our doorstep and it\u2019s in a great catchment area if you have children. 6. What would you advise to save on top of a deposit for solicitors costs etc.?<\/strong><\/p>\n\n\n\n If you\u2019re a first time buyer then you will need to save for your solicitors\u2019 costs, surveys, valuations and other fees as well as potentially moving costs and furniture for your new home. This can be up to \u00a35,000 on top of your deposit. We budgeted an extra \u00a31,500 just for our solicitor fees and surveys when we first bought. <\/p>\n\n\n\n If you\u2019re selling and buying in a chain you will need to also budget for estate agents fees if you are using one and a second lot of solicitors\u2019 fees for the sale of your property too. Plus if you are completing on a house purchase next year after 31st<\/sup> March and you are not a first time buyer or buying a property under \u00a3125,000 you will have to pay Stamp Duty too. I\u2019ll leave a link to the GOV.UK site here<\/a> about Stamp Duty for anyone buying who may need to pay it next year. <\/p>\n\n\n\n 7. What\u2019s better – fixed term or variable rate mortgages? <\/strong> 8. How long did it take you to save for a deposit – I\u2019m finding it really hard to save?<\/strong> <\/p>\n\n\n\n We didn\u2019t decide to start saving for a house, to be honest, we\u2019d just decided one day that we were fed up of city centre living and renting a flat, so explored our options as to how we could make it work. We had some savings in place for our upcoming wedding (including some cash that was gifted to us from our families for the wedding) so we decided that we would use the wedding money to purchase the property, and top up the wedding savings after we moved in. We moved in in September 2018 and got married in October 2019, so it all worked out in the end! The Nottingham has a handy guide on how to save for a deposit here.<\/a><\/p>\n\n\n\n 9. Where did you start when you decided to buy a house?<\/strong><\/p>\n\n\n\n We went online to fill out a Mortgage in Principle form to work out how much we could potentially borrow (based on factors like our current earnings and outgoings but this depends on what the lender wants to see). Initially, we looked at buying an apartment in central Liverpool but ultimately decided we wanted to get out of the city and we really, really wanted outdoor space. From here, we booked viewings in another area we initially wanted to live in (South Liverpool) and after a few weeks of viewing houses that were well out of our price range based on their condition, we went back to the drawing board to decide what to do next. I\u2019d always wanted to look at the area I live in now as I grew up and went to school here, but Guy wasn\u2019t so sure, so after every viewing in the area we\u2019d head into the local village to have a drink or go for dinner to get a feel for the suburb. Guy ended up really liking it, especially the huge park and nature reserve which is about four minutes away from our house, and not long after we viewed the house we live in now. We put an offer down the next day and it was accepted – and that\u2019s where the ball started rolling. <\/p>\n\n\n\n 10. Advice on where to start to buy a property in an area like London?<\/strong><\/p>\n\n\n\n London is very competitive and you need to be on it in terms of viewings and offers but the process of buying in London is very similar to buying anywhere, it all starts with looking at what you can afford with how much deposit you have and then how much you can pay on your monthly repayments. Of course, London is notoriously more expensive but the premise is exactly the same but you might need to be prepared to jump on any house that you think you might be interested in as they will fly out really quickly. <\/p>\n\n\n\n 11. Did you make use of any schemes like Help To Buy?<\/strong> <\/p>\n\n\n\n We didn\u2019t use a Government scheme like the Help to Buy scheme but we did use the Government backed Help to Buy: ISA to make back some of the funds for our deposit. It was really helpful in topping up our funds, and the bonus ended up covering the majority of our solicitors\u2019 costs. <\/p>\n\n\n\n The Help to Buy: ISA isn\u2019t open to new applications anymore but the Lifetime ISA is \u2013 this is a savings account that The Nottingham offers where you can get up to an extra \u00a31,000 towards your house deposit each year. The premise is similar to the Help to Buy: ISA where you get a free 25% Government bonus on your savings but the difference is that it gets paid into your account after you deposit money into it, unlike the Help to Buy: ISA – when you would have to claim it when you\u2019ve completed your house purchase. <\/p>\n\n\n\n
Since the pandemic, it has become increasingly hard to find lenders who will accept just a 5% and sometimes even a 10% deposit but it can happen. It really depends on everyone\u2019s personal circumstances and the range of mortgages that are available to them. <\/p>\n\n\n\n
2. I\u2019m a first time buyer – should I buy super cheap and renovate, or buy the best I could possibly afford? What did you do?<\/strong>
This was a big one for me – Guy and I have a rule in our house that all of our bills and outgoings (mortgage repayments, utility bills, food, etc.) should be less than only one of our salaries. We\u2019ve tried to make it so that if the worst happened and one of us were to lose our jobs, all of our necessities would be covered, so we thought about this when we looked at different properties at different price points. <\/p>\n\n\n\n
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It all depends on what your needs and wants are and as a first time buyer there are usually some compromises but I live in West Derby, which I\u2019d really recommend as a first time buyer! <\/p>\n\n\n\n
4. When it comes to your remortgage, did you stay with the same company or move?<\/strong>
We stayed with The Nottingham as they offered us the best deal on the market at the time so we were very glad to stay with them. I\u2019d always advise looking around to compare different deals when you come to remortgaging and exploring what other providers could offer. The Nottingham has a section of their business called Nottingham Mortgage Services where they search over 60 lenders to find the right mortgage for their customers. So, even if you go to The Nottingham for a mortgage like we did, you might not end up with one of their products!
5. What was the process of remortgaging like – was it simple?<\/strong>
It was really simple for us as they already had all of our information from our current mortgage. For us, it was all done over email and a quick call to go through our documentation. I was so relieved as I thought it\u2019d be such a long process but it was so quick and easy. If you have more requirements like changing the term, borrowing more money or if you\u2019re changing provider it will take longer though. The Nottingham has lots of guides on how long remortgaging can take and a guide to remortgaging fees too here<\/a> and here<\/a>.<\/p>\n\n\n\n
There isn\u2019t a \u2018better\u2019 one exactly; it\u2019s what\u2019s best for you and your situation. A fixed-rate mortgage is where you pay the same rate of interest for an agreed period, after which a new rate will kick in. A variable rate means that as the market changes, your mortgage interest rate can change too and therefore your monthly repayments could change too. We\u2019re on a Fixed Rate because we like to know exactly how much we\u2019ll be paying each month and so far they have been the best deals for us when we\u2019ve chosen them. Again, The Nottingham has a great guide on this on their website which explains all the different types of mortgages – check it out here<\/a>.<\/a><\/p>\n\n\n\n