It is a significant accomplishment to move into your first house, but at the same time, it can feel overwhelming.
There is a lot to learn before you get the keys to your new house, including how to choose the right neighborhood and the right property, how to organize your finances, and how the process works. Before you get the keys to your new house, you will need to learn all of this information.
Fortunately, we have collaborated with Steps To Buy NI to bring you this 10-step instruction that will assist you in getting off to a strong start in the purchasing process.
1. Analyze the Positives and Negatives of the Situation
A house is a sizable investment that, over the course of time, can increase in value and offer remarkable protection. Nevertheless, you can’t just walk away from the ship. Because you will not have a landlord to whom you can turn in the event of a problem, you will be responsible for the continuous maintenance of the property.
It goes without saying that this also means you have more freedom to do as you please, and the payments on a mortgage are typically more stable than rent payments.
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2. Look for the entrance that is the least circuitous
When we hear the phrase “home ownership,” the vast majority of us automatically think of a debt; however, acquiring a mortgage is not the only way to become a property owner. There are four that stick out as being particularly notable, and they are as follows:
Mortgage: A mortgage obtained from a bank or building society will typically require a down payment of between five and ten percent of the purchase price. The borrower will then be responsible for repaying the debt plus interest over the course of a predetermined amount of time. Send in your application by going through a financial organization or a consultant.
Buying shares is another option to consider, which could end up being more cost-effective. You can purchase a section of the property with the money you have borrowed, and then you can rent out the remaining space. As more funds become available, additional tracts of property can be purchased to expand the existing holdings. It is recommended that those with lesser incomes, those who do not qualify for a conventional mortgage, and those who are unable to afford a sufficient down payment select this option. Co-proprietorship and Fairshare are two companies in Northern Ireland that provide the option of shared proprietorship.
Tenants who have been living in their current homes for at least five years and who are currently renting from the Housing Executive or a Housing Association may be qualified to purchase their homes through the Right to Buy program, which is also referred to as the House Sales Scheme. You may be eligible for a discount on the purchase price of the property as an incentive to complete the transaction. Get in contact with the Northern Ireland Housing Executive if you are interested in learning more.
A rent-to-own agreement is a great way to get your foot in the door if you are currently renting but would like to ultimately buy the house you are living in. If this describes your situation, read on. It is possible for a rental agreement for a newly constructed home to include an opportunity to purchase the home after three years. There will be additional information provided in the co-ownership agreement.
3. Put some order into your financial situation
If you’ve already made up your mind and the significant change is just around the corner, it’s time to sort out your resources.
First things first: straighten out your budgetary situation. How much money comes in and how much money leaves each month is the question. When you apply for a mortgage, your lender will inquire about the record you keep, so it is in your best interest to become acquainted with it.
The following action that you should take is to get started setting money aside for a down payment. Put some money aside on a monthly basis, and make it a point to keep the 5–10% rule in mind. Indeed, achieving that should be your top priority.
It is essential to keep in mind that, in addition to the original payment, there are additional fees that need to be taken into consideration. In addition, there is the Stamp Duty that needs to be taken into consideration, as well as the expenses of solicitors, movers, decorators, and furnishings, unless this is your first time purchasing a home. (This rule is only applicable if the price of your first home is less than $300,000)
4. Uncover the Perfect House for You
The most common ways to search for a new residence are through the use of real estate brokers and internet postings. Important aspects to consider include the property’s position as well as the conveniences, loved ones, and professional networks to which you will have ready access.
When you’ve found something that you like, it’s essential to think about whether or not it has enough room for all of your needs once you’ve made that discovery. Is there a substantial amount of maintenance or remodeling that needs to be done, which would subsequently require an investment of money? When you switch on the lights and the heating system, do you find that they function appropriately? You should, at your earliest opportunity, get a copy of the EPC, which stands for the “Energy Performance Certificate.”
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5. Putting in an Application for a Mortgage
Once you have a solid idea of the boundaries of your financial plan, you should get started searching for a mortgage lender. Have a conversation about your plans for the future with a mortgage broker, financial advisor, or financial organization.
You will be given an Agreement in Principle that details the highest possible loan amount that the provider is prepared to consider. This amount will be communicated to you. At this point, a purchase and sale agreement might be reached.
Before moving forward with the transaction, the provider will want to verify both your income and the amount that you spend each month. If you are self-employed, they may request pay stubs or bank statements dating back as far as two or three years. In general, they will ask to see pay stubs or invoices dating back three months.
Once the lender has received and processed all of your documentation, they will then perform an appraisal.
After that, the provider will present you with a mortgage package for your consideration.
6. Make Sure That Your Name Is on the Paperwork
After completing the contract, you will not have the option to easily withdraw from the agreement. Even though putting your commitment in writing by signing a contract is a required step, that does not immediately make you a member of the organization. If you are at the very bottom of the chain, the transaction might not be finalized for several months; however, the closing date will be specified in the contract that you execute.
When purchasing a house that has been on the market for some time, the purchase agreement is typically finalized a few weeks before the scheduled closing date. It could take a few weeks or even a few months to finish constructing a new building from the ground up.
Before beginning the renovations to the property in accordance with your specifications, the contractor or developer may demand a written contract as well as a deposit equal to five to ten percent of the overall cost.
After you have signed the contract, another thing that you will need to take care of is getting building insurance. Your banker will want to see evidence that you are covered before they will release the funds to you.
At some point in time, your attorney will ask you to sign the necessary documents.
7. We Are Right at the Finish Line
You’ve finally gotten to the heart of the matter, but there’s still plenty more work for you to do. Obtain coverage under your homeowner’s insurance policy before the completion of the endeavor. Start packing a few boxes as soon as you have some spare time so that you can reduce the amount of stress you feel the night before moving. In order to get ready for your move, make sure to schedule a moving truck and get the utilities set up in your new house as soon as possible.
All of the money should be sent to your solicitor. This amount will cover not only the down payment, but also the commission paid to the real estate agent, the stamp duty, and the expenses incurred by the solicitor. (if applicable).
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8. It Has At Last Arrived!
Find out where you can pick up the keys and at what time before you need them. The majority of the time, the developer or the real estate broker is the source of this information.
Have the utility meters read and recorded on the day you move in. This is one of the most important things you can do to prevent getting a surprise charge a month or two after moving in. If you do this, you won’t have to worry about it.
Check to see that everything, including any furniture you brought from your previous house, is located where it should be. In that case, you need to contact your attorney as soon as possible.
9. You Are, Without a Doubt, Admitted
You are in luck because you made it! But keep yourself right straight off the bat with a few admin musts – make a list of matters where you need to change your address (banking, phone bills, car registration to name a few), let Land and Property Services know you’ve moved in and that you’re the new ratepayer on the property, and if you’ve moved into a new build, have a quick check for ‘snags’ and draw up a list for the builder.