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Articles
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While the
information researched is believed to be correct, Jump Mortgages Ltd accepts
no responsibility for its accuracy or the accuracy of information contained
in referenced websites -
The Palace Mag, June 2007 -
HIP replacement
The long anticipated Home Information Packs, which were meant to come
into force on June 1st, 2007, have seen yet another change. As the last
edition of The Palace Mag was going to print, the government did a u-turn.
The long-anticipated packs will be delayed until August 1st, 2007.
Furthermore, not all properties will initially be subject to the new
legislation. To begin with, only properties with 4 bedrooms or more will be
required to have them in place when being placed on the market.
As well as throwing things into turmoil for vendors and buyers alike, this
last-minute decision has also affected hundreds of people who have spent
countless thousands of pounds setting up companies and training to become
qualified to assemble these packs.
Home Information Packs are meant, perhaps ironically, to ease the process of
purchasing a property. Effectively, some of the legal and other work will
have to be completed before the property can be placed on the market. In
theory, this should cut a couple of weeks off the process and thereby reduce
the chance of being gazumped. Importantly, the cost will be borne by the
vendor, and should be a few hundred pounds.
For up to date information, check the government’s website at
www.homeinformationpacks.gov.uk.
The Palace Mag, May 2007 -
Home Information Packs
Home Information Packs are set
to become the law of the land on June 1st, 2007. Craig Brown of locally
based Jump Mortgages tells us more.
These packs are intended to make the home-buying process run a little
smoother and will be relevant to you if you are planning to sell your
property or buy a new one.
Effectively, some of the legal and other work will have to be completed
before the property can be placed on the market. In theory, this should cut
a couple of weeks off the process and thereby reduce the chance of being
gazumped. Importantly, the cost will be borne by the vendor, and should be a
few hundred pounds.
Packs are currently expected to contain terms of sale, evidence of title,
results of searches and lease-hold documents where applicable. The new
addition to the process is an energy performance certificate, which will
grade the property's comparative energy efficiency. You may also opt to have
a Home Condition Report conducted, which is a form of survey, but this is
not mandatory.
After June 1st, 2007 any new property to the market must have a completed
pack to show any potential buyer. However, if a property is already on the
market before June 1st, they will not be required to have a pack as long as
the property is sold by December 31st, 2007.
Anecdotal results from Denmark, the only other EU nation o have a similar
system already in place, have been quite positive. It should be noted
however that their system also requires the seller to have a survey done,
while in the UK this will not be compulsory. Most estate agents will have
access to HIP providers. You can also hire one independently. There are
already a number of online sources for instructing HIPs.
For more information, look at the government's site at
www.homeinformationpacks.gov.uk.
The Palace Mag, March 2007 - Preparing
for a Purchase
As most locals can confirm, the
CP real estate market has hotted up to the point where properties are on and
off the market in a couple of days, or even less. This, of course, makes it
difficult to get your foot onto the ladder, but there are a few things you
can do to improve your situation.
Sort out your finances. Before you even set foot in the door of local estate
agencies, ensure that you have pre-approval for your mortgage from your
lender of choice. This can be obtained from either your bank, or for greater
choice, from an independent mortgage advisor.
Ensure you are chain free. In some cases, this is easier said than done. If
you are currently renting, then you are off the hook. If you are buying and
selling at the same time, consider the possibly of decamping to the home of
a friend or relative in the event that your sale date and purchase date do
not match perfectly.
Look at a variety of sources for property. Obviously, local estate agents
have a plethora of properties on offer. Most of their properties can be
found on
www.ononemap.com and similar sites. Self-selling services are also
becoming more popular. Try
www.houseladder.co.uk,
www.halfapercent.com and
www.houseweb.com for properties that may not be listed on the high
street.
Purchasing during the summer
So you think buying property in the UK in the summer is a bad idea? Think
again. There are three main peaks in the year when most house purchases get
started. The spring sees an abundance of potential buyers crawl out of their
caves to scour the countryside for more suitable abodes. Also, early autumn
sees a rush as people return from holidays and ‘get back to business’.
Another very busy time is shortly after the Christmas holidays for much the
same reason as in the autumn.
Why not choose a time when all of the professionals involved are hungry for
work? Firstly, estate agents. Yes, some of them will take their holidays at
this time, but the offices remain manned with staff sifting through
databases looking for people to call. What a great time to be put on active
client lists and get them to work for you. Mortgage advisors also face a dry
spell, particularly in the month of August, when they encounter little or no
new business. It’s an ideal time to call and get your finances in order,
even if you do not plan to buy for the next few months or so. If you do go
ahead with a purchase at this time, though, make sure your advisor isn’t
taking holidays at a time when you will need them the most. Work also tends
to dry up for conveyancing solicitors as well. You may actually have
slightly more negotiating power during this period, as they are looking to
bridge the gap until autumn. When choosing a solicitor, it is also important
to make sure they are not about to take holidays. If they do, your file will
likely be passed to one of their colleagues to deal with. This colleague
will already have their own cases to deal with and yours runs the risk of
being placed in the ‘later’ file. Perhaps get quotes from a couple of
different firms so that you have a backup when the time comes. Finally, the
mortgage lender that you choose, particularly if it is a bigger one, will
have lots of staff on hand during the summer twiddling their thumbs. Many
people believe that buying a property in the UK is only slightly less
complicated than performing dental surgery on a crocodile, however, with
proper preparation and advice, this process can become much less daunting.
Here are a few steps that you can take to put yourself in the best possible
position for when the time comes.
Budgeting for a home purchase
There are a number of things that you need to consider when budgeting for a
house purchase.
There will likely be a product fee from the lender (usually called a booking
fee or arrangement fee), normally amounting to between £500 - £700. This is
an administrative fee for the processing of the mortgage. Many lenders allow
you to add this fee to the main loan, thereby reducing short-term cash
requirements.
There will be a valuation or survey fee. This must always be paid up front.
A basic valuation should be £300 - £500, while a more thorough Home Buyer’s
survey will be £600 - £800, depending on the price of the property.
Legal fees. This is the money that you must pay your solicitor for acting
for you. I have also included fees that your solicitor incurs on your
behalf.
Solicitors usually also work on a sliding commission depending on the price
of the property. A good solicitor should be no more than £1000 + VAT, but
again this will depend on the price of the property. Bear in mind that cheap
is not always best. Ask around for personal recommendations.
Disbursements. These generally refer to costs that solicitors incur on your
behalf. These generally come to around £400 for searches with the local
council.
Stamp Duty. Technically speaking, this is a disbursement, but because it is
so large deserves its own category. Properties from £0 to £125,000 incur no
stamp duty. From £125,000 to £250,000 the rate is 1% of the purchase price,
from £250,000 to £500,000, it is 3%. Anything over that is 4%. I should note
that this tax is not staggered like income tax. If the property costs
£250,000, the tax is £2,500. If the property costs £250,001, the tax is
£7,500.
Preparing in advance for a purchase
Put yourself on the radar. When you eventually make a mortgage application,
the lender will check your credit. This means if you have never had a loan
or credit card in the UK, you could encounter problems. Credit cards are not
the best option for everyone, but if you feel you are responsible enough for
the challenge, it may be right for you. You can make small purchases with it
in order to build up your credit rating. Also, the lender will check to see
if you are on the voter’s role as a means of proving your residential
history. Even if you are not a UK citizen, it may be possible to vote for
local elections, depending on your circumstances. Check with your local
council for details. If you do manage to get on the voters role, update your
details with the appropriate council every time you move.
Save for a deposit. There is no hard and fast rule, but generally 10% will
give you access to very good deals. Less than 10% is often also possible,
but the rates are generally not as good.
Check to see if you are eligible for an affordable mortgage. Independent
brokers are probably the best option, particularly those who deal with
foreign nationals on a regular basis. Independents generally have access to
the greatest number of lenders.
Regarding visa issues; you are who you are. You may feel that your visa
situation or job status puts you out of the running for a mortgage. This may
not necessarily be true as lenders have widely varying criteria for
applicants. Again, check with an independent broker. You may be surprised as
to what they can come up with.
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