Buying a flat for the first time (in Scotland) - how do you do it??(7 Posts)
This may seem really really stupid, but please bear with me.
Through a combination of savings and a (very much appreciated and generous) gift from a grandparent, DH and I are hoping to be in a position after Christmas where we can buy our first flat. We live in Edinburgh, and are renting at the moment.
I have no idea how to go about it at all. We should have £15-20k, but I haven't got the faintest idea how much that means we could put down as a deposit. Ideally, we would probably need £15 or £16k for a 10% deposit, but I know we will need money for legal fees and stamp duty and all that stuff, and I don't know how much to set aside for that. If it turns out it's loads, and we would need another £5-10k or something to cover it on top of £15k for the deposit, I'd like to know so I can work out how long/hard we need to keep saving.
If/when we do have enough money, I don't know how to get the ball rolling. Do you just go to the bank and talk to them about mortgages? Should we go to a mortgage broker? Is getting a mortgage likely to be really difficult? We have full time permanent jobs and no debts, apart from our student loans. How do you appoint a solicitor? Do you just find one in the yellow pages? How long does the process usually take? We are renting on a six month lease at the moment (expires in April) but if we do decide to buy I would like to change that to a rolling tenancy instead.
Basically, I've got no bloody idea. Our parents all live in England where the system is different, and in any case bought their houses many years ago so can't offer very much practical advice. All our friends either don't own homes, or own them in England.
Any advice would be much appreciated!
I would strongly suggest you go and have a chat with a solicitor as a first step. As you will probably have gathered, in Edinburgh most properties are bought and sold via solicitors rather than estate agents. They will be able to advise on what they're likely to charge for buying a property in the price bracket you're looking at. Ask colleagues at work if they can recommend someone: IME you want a firm near your work so you can pop in to sign papers etc quickly and easily. Have a look at the ESPC website too to see what areas you might be able to afford.
For mortgages, I'd avoid mortgage brokers like the plague as they push whichever products give them good commission. I think you're better doing the research yourself to see what deals are out there but it is quite confusing at first. The money saving expert website has a good guide to mortgages, including links to online calculators and clear explanations of how to compare best buys.
Good luck, it's an exciting thing to do, especially when you can focus on the buying and don't have to worry about selling at the same time.
congratulations on getting a deposit together.
the amount of stamp duty depends on the price that you pay for a property. that is normally the biggest expense (but not always).
so first thing is to check out espc.com and see the prices of the flats in the area you want to buy. then go on to (say) nationwide.com and use their loan calculators to see what they might be prepared to lend you. hopefully those figures might land fairly close together. the nationwide site will have another calculator to say how much ltv (loan to value) you need - ie how much deposit compared to price of property - to get their deals. the lower the ltv normally the better deal on fees/interest rate.
so a quick bit of googling should get you:
- likely property price
- likely stamp duty (check which rate applies on directgov website as you may be in the zero rated category from the figures you mention )
- likely amount you would be loaned
- fees payable to get that loan and likely interest rate/monthly payment to check you can afford that.
on top of that allow for about 700-1000 for a solicitor/searches, maybe 1000-1500 for a survey if the mortgage co do not accept the provided hip (oir you negotiate a lower/different price), moving costs, furniture.....
so you then ask around for solicitors and ask a few for fee proposals (see the thread i started a while back on the edinburgh board for suggestions). appoint the one you think will do a good job.
once you have found a place you instruct a solicitor to put in an offer for you. this is legally binding in scotland and normally you have a mortgage in place (but i think that in this slow market this is not always the case) so if your offer is accepted you solicitor "completes missives". apparently this takes a couple of weeks and is the same as "exchange of contracts" in england. the sellers then have to find somewhere to buy/go and you agree a date for completion - probably as part of the missives. then you complete and can move in!
as well as usual utility bills from renting you will have to pay buildings insurance and repairs etc. flats might have service charges to cover shared areas.
that is what i have gleaned from my research as we are planning a possible move to edinburgh so i am no expert.
I'd reccomend the centre for independant mortgage advice on Leith Walk. They were reccomended to us by three separate friends and so far they've been great, holding our hands and walking us thru it. They seem to have a bit of a bias towards nationwide, but we did our own research and decided that nationwide were a good organisation offering a good deal, so for the amount of advice we've had, we were happy with that. We've not completed yet, got three weeks to do that. All a bit scarey
Market seems a bit stagnant just now though. If you can wait, I think there will be more choice in spring ..
I am an expert on this having watched Location, Location, Location many times. According to Kirstie and Phil, you should go and view properties with guide prices in your range, get wildly excited about them, then suddenly remember that you need to make it offers over that guide and get very upset and despondent. You should decide to buy anyway and then add a random percentage over the guide price - they often recommend about 30% - and become wildly excited if you win (not knowing if there were any other serious bidders) or stamp your feet and blame the vagaries of the Scottish system if you don't .
Good luck (btw, I'd use a mortgage broker, it's much easier to get a deal that is appropriate for you that way - banks and building society mortgage advisers are working on commission too).
Yes the factor (company that takes charge of getting things done to keep the building safe and clean) will have a quarterly charge itself and then there are costs of said repairs and maintenance, so when you look at the money involved remember as well as council tax & utilities etc, there'll also be a regular amount going out each year to cover that.
I'd get cracking before the next wave of students start getting offers and their parents snap up properties for 2013-14.
I would use a mortgage broker, rather than a bank or building society as they have access to a lot more mortgages. Go and see them first before looking at any properties so that you don't get your heart set on a property that you can't afford. They will be able to recommend a solicitor to you as well. Once you have had a chat about finances, start viewing, remember to go more than once at different times of the day to get a feel for the place, parking etc
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