13 July 2023
Failing to organise your finances
Before you start looking for your dream home, it’s important to make sure your finances are in good shape and ready for your mortgage application. The best way to get a clear overview of your financial health is to obtain a copy of your credit report, which includes a credit score. As this is something a bank or building society will check before offering you a mortgage, it’s good to get an idea of where you stand (and how to improve, if necessary).
There are two ways to see your credit report. Under the Consumer Credit Act, you can write to one of the credit reference agencies (such as Experian or Equifax) and ask to see your file for a small fee. Alternatively, you can check your file online. Both Experian and Equifax offer a free 30-day trial, after which point, you’ll need to pay a monthly fee for continued access.
If your credit score comes back lower than you’d hoped, there may be some simple things you can do to improve it. Keep an eye out for any mistakes in your report and be sure to contact the credit reference agency should you spot anything that requires correction. You can also notify them if you spot any information that, although accurate, no longer reflects your current situation.
Forgetting to factor in extra costs
There are a number of additional costs that need to be factored into your overall budget. These include:
Solicitor’s and mortgage arrangement fees
When doing your research to find the right solicitor, there are a few useful questions to ask. One of these questions is how much they charge for their services. Legal fees can vary, so it’s a good idea to understand exactly what is covered by the quote your solicitor gives you. You may also need to factor in stamp duty, depending on the purchase price of your new home.
It’s not just the monthly mortgage payments you need to plan for. Lenders charge what’s known as an arrangement fee for pre-approved mortgages, or a booking fee for fixed or capped rate mortgages. These fees can vary from lender to lender, so it’s worth doing your research. Your lender may also require you to pay for a valuation of the property, to ensure that it’s worth what they are lending you (and therefore can be considered sufficient security against their loan).
Buildings insurance
Your mortgage lender will require you to take out a buildings insurance policy on your new home. They will also advise that you take out life insurance, to ensure that they are able to recoup the value of their loan in the event of your death.
Not paying attention to the finer details
It’s a good idea to bring a friend or family member with you to any property viewings, as an extra pair of eyes can be very helpful. Ask plenty of questions and consider more than just the aesthetic features of the property. Walls can be painted, and carpets can be changed, but it’s important to think about the costs of running and making more significant improvements to the property.
Have the older plumbing and electrics been updated? Has the boiler been serviced annually? Has the roof undergone repairs, and does the property have cavity wall insulation, double glazing, and a good energy rating? These are all good questions to ask, as energy efficiency has a huge impact on the cost of running a home. Also, if it seems likely that the property will soon need a new roof or boiler, that’s a significant cost you’ll want to factor in.
Buying a new build home comes with many benefits, but a big one is the reassurance of knowing that everything is brand new to you. All Morrish homes come with a ten-year National House Building Council warranty, a comprehensive warranty that sets the standard for UK housebuilding. We also offer our own two-year warranty to cover any “snagging” issues, and any appliances installed throughout the property will be covered by their own separate warranties.
Brand new fixtures and fittings, as well as double glazing and advanced heating technology, mean that you’ll enjoy improved energy efficiency and reduced running costs.
Being unrealistic about what you can afford
If you’re renting in an expensive area, chances are you may be priced out when you come to buy. Before you opt for a cheaper, less appealing area, it’s worth remembering that it’s better to buy for the neighbourhood than the house. You can always make improvements to your home, but there will be little you can do about the area it’s in.
