When approaching a bank or lender to look for a mortgage, preparation is essential so it is important to get advice beforehand. Many people will seek the advice of a mortgage broker, who can guide them through the application and help them to submit it to the banks and building societies. The banks need to see a solid saving record as, with the current economic climate, it is now more difficult to secure a mortgage.
Approval in Principal (AIP):
We would advise people to get “Approval In Principle” before they start looking for their home. An Approval In Principle (AIP) is an indication of the amount of money that a lending institution is likely to lend you to purchase a home. Once you have AIP you can then establish your budget.
Once an Approval In Principle is secured you can shop around with banks / building societies as you might get more money and a better rate and terms and conditions.
Get a feel for the market - visit a number of auctioneers to get details of properties on the market. Take away copy brochures and compare and contrast the properties on the market in your own time.
Make a list of essential features that you want in your new home, and use this as a bench mark to choose your target properties.
Always look for value for money when purchasing your home.
For those people who can secure a mortgage it is a buyers’ market so people should drive a hard bargain. Don’t be afraid to haggle.
Recent changes for first-time buyers:
It is important for couples - same sex or opposite sex - to be reminded about the changes in the Civil Partnership Act for cohabiting couples. Couples living together in an intimate and committed relationship for five years or two years if they have children together may acquire rights (e.g. maintenance and succession) if the relationship breaks down. For couples who are getting on the property ladder they need to give serious consideration to a cohabitation agreement which will regulate their affairs if the relationship breaks down.
The bank’s valuation report is not a structural survey and the valuer will not be checking for structural defects. The basic legal rule “caveat emptor” i.e. let the buyer beware applies. As a buyer you take the property as it stands and the seller is not under any duty to disclose any physical defects in the property. It is essential that you arrange a survey of the property by a suitably qualified professional such as an engineer. If the engineer reports that there is a significant amount of expensive work to be done on the house the buyer has to weigh up whether or not this house is a good choice. They will have to consider if the problems can be rectified and at what expense. One of the other common issues that arise, when the survey is done, is the discovery of an extension or shed that does not have planning permission.
One of the other innovations of the last number of years was the requirement for BER certificates for properties that are being sold or let. These certificates detail how energy efficient the house is. The house will get a rating of A to G depending on how it performs - very few properties will make a B rating and even less an A rating, but buyers need to get a house as high up on the scale as possible. With increasing running and maintenance costs and most likely carbon taxes on the way in the future people will need their homes to be more efficient.
It is vital, if you are building a house, to have a building agreement with the builder. The building agreement will fix the price of the build and the terms and conditions of the contract. One of the key clauses that need to be negotiated with the builder is the retention clause. The retention clause enables you to hold back a sum of money for a period of time to deal with potential defects or problems with the new building. e.g. six months after moving into the house.
If you are building a new house you should avail of guarantee schemes such as HomeBond and Premier Guarantee as they offer a structural guarantee and protection if a builder becomes insolvent.
There are a lot of properties on the market that have difficulties that need to be fixed and therefore when you agree to buy (or even before you agree to buy) you should ask your solicitor to check out the title. We have found an increasing number of problems over the last number of months that have wasted a lot of purchasers’ time (and patience) in trying to buy a house which the bank will not accept as security because of title problems – such as, planning issues, problems with roads and services or issues with management companies in estates.
It pays to consult us earlier rather than later.
If you are planning on purchasing property contact Joanne Fennessey at firstname.lastname@example.org or telephone 052 612 4344 / Freephone 1800 750 850.