Things you need to know before buying a property in the UK using mortgage

Things you need to know before buying a property in the UK using mortgage.

 

There are over 300 regulated mortgage  lenders and administrators in the UK. The Financial Conduct Authority (FCA) is responsible for prudential supervision of all other types of firm including mortgage administrators and other lenders which do not take deposits. During the last quarter of 2016 (October – December) , the FCA reported that  £62.8 billion worth new residential loans were advanced to clients all over the UK eventhough the figure represented a slight drop of 2.6 percent compared to the previous quarter (July – September).Meanwhile, the  value of all outstanding residential loans was at £ 1,337.8 billion and 31 percent of these still pay interest at rates of BBR + 3 percent or higher.

 

This stats clearly shows that folks are relying on mortgage lending across the UK to acquire new homes for their families and it is crucial to understand some of the key decisions you need to know when you want to borrow money to buy a house.

1.Mortgage lending – There are two types of loans in mortgage lending, regulated and non-regulated loans. Regulated loans are those  loaned to individuals and are secured by a first charge on residential property to be used by the borrower or a close relative.Non-regulated loans are all other mortgage lending to individuals that are not regulated such as buy-to-let lending. Mortgage lenders use two main measures when they are lending to their clients.The first one is the loan-to-value where the loan is calculated as a percentage of the value of the property while the second measure is the income multiple where the loan is defined by the borrowers main income.Credit history is also now being used more and more as well when determining a new loan application.

 

2.Communications – Always communicate to your lender in writing and keep copies as evidence of notification and authorisation.

 

3.Other occupiers – You must always provide a list of people who are not party to your mortgage but will live at the property .It’s also important to obtain a signed deed or form of consent from all occupants who are 17 years old or over.Usually rights and interests of persons who are not party to a mortgage but will be in occupation of the property always affect the rights of building societies and lenders so it’s important to disclose upfront.

 

4.Valuation – Double check the valuation report and ensure that there are no discrepancies in the way the property has been described and the property title in other conveyance documents. Assumptions stated by the valuer like tenure , easements, boundaries and restrictions are vital information that you need to be sure about.

5.Properties let at completion – People take mortgages to buy new homes which they live in with their families or let to others and earn income on them.When you want to take a  buy-to-let property using mortgage , always let your lender know the purpose of the mortgage so that they can help you comply with a sea of different policy guidelines.

 

Buying Properties in UK

Buying property in UK is same as buying it in any other country but of course, there are a few things that you might need to know before you set out on your property hunt and if you want it to come easy, there are a few steps you can follow to get the whole process simplified. You can always use the assistance of property cash buyers who would fetch you some best property options making the process all the more easier for you. But even in that case, a little homework is required to be done!

The first thing that you need to do is set a budget and if there is an involvement of a mortgage, make all the necessary arrangements as soon as possible.
Once you have selected a property and decided on it and have also made a verbal offer to the vendor’s agent and have got it accepted then what will happen next? The agent will submit the offer to both solicitors through the Memorandum of Sale.

The seller’s solicitor will contact your solicitor providing him with a copy of the seller’s title. Your solicitor will have a chance to raise enquiries on the title provided and all the other matters that he may consider relevant. The solicitor will also put in hand all the usual local searches that he might consider important.
Mortgage offers tend to be slower so you have to be patient with this one.

This work is basically the part of the pre-exchange of contracts that states that neither the seller nor the buyer is committed in any way whatsoever and either party can still withdraw from the transaction made. Once this work is completed and all the necessary mortgage offers have been received by you, it would be the time to discuss the completion dates. After the final agreement, there will then be an exchange of solicitors’ contracts. After this step of the proceeding, you’d be asked to pay 10 % of the total purchase price. And once this has been done, neither party can withdraw.

An important thing that you must keep in mind is that if you decide to withdraw after the contracts have been exchanged, you will not only lose your deposit but there is a chance that the seller sues you for the losses that he might suffer. It is, therefore, advisable that you do not exchange contracts until you are fully satisfied with the property you are about to purchase and able to proceed financially.

On the date of completion, the solicitor will make the required arrangements to settle the remaining sum of money for the property purchase and then get the title registered at the Land Registry and send you evidence of registration made.

This will mark the completion of your journey to make the purchase of our choice and too through a legal proper channel.
Thereafter, the property belongs to you and you can now take the possession of the keys!

Source: www.propertycashbuyers.com