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Property Buying - Protocol
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Is this the new baked beans south african les thread?
I really do not feel you are in a position to buy. You cannot get a 100% mortgage, so you need a deposit of at least 5% if not more. You will need money for solicitors and possibly stamp duty as if you are a legal owner of the house you are in you may not be classed as a FTB. I wouldn’t take something your brother recons as truth, do some research!
You also need to think about life insurance, home insurance, council tax, as well as savings for emergencies. How old is the boiler, new ones are not cheap. Etc
You also need to think about life insurance, home insurance, council tax, as well as savings for emergencies. How old is the boiler, new ones are not cheap. Etc
Thanks, do you think the mortgage lender would give me the full amount in cash so I could effectively walk up to the vendor as a cash buyer?
That's not how it works, a cash buyer is someone who doesn't need a mortgage to buy the house
No, a mortgage lender will never give you cash. You never see the money. It’s only released to your solicitor. I’m beginning to think this is some sort of joke thread now
I think you’ve misunderstood how a mortgage works … they don’t just give you the money! It’s a very complicated process and you’re not a cash buyer at any point.
Thanks for the replies. I'm going to show this thread to my brother as I think he will find this useful too. The property I am looking at is under £100,000, would stamp duty not apply? Also, the current house is in my father's name as his name was on the books when my mum died (even though he's not paid a penny towards the house in 20 years 
). My uncle is on my father's side and also owns another property which my father lives in (just to confuse things). It's a real brain spinner I know. I'll be glad when it's all done with.
). My uncle is on my father's side and also owns another property which my father lives in (just to confuse things). It's a real brain spinner I know. I'll be glad when it's all done with.If you don’t have the full cash in your own bank account, as cash not a loan you won’t be a cash buyer. The mortgage goes from your bank, to your solicitor to the sellers solicitor and then either to a bank or the seller.
I’d suggest speaking to a mortgage advisor to understand What you’re actually able to afford
I’d suggest speaking to a mortgage advisor to understand What you’re actually able to afford
We're in the process of buying out first home and our mortgage advisor asked to see proof of funds before applying for our mortgage in principle? Once we made an offer on the property, the estate agent also wanted to see proof of funds.
The property we bought was less that we could have borrowed from the mortgage lender, but the lender wanted a minimum of 10%. For example. if the lender told me I could lend up to £100,000 and I bought a property for £90,000, that does not mean the bank are still going to give me 100k just because of my affordability. They would lend me 90% of £90,000 which is 81k and I would still need to put 9k of my own money down.
The property we bought was less that we could have borrowed from the mortgage lender, but the lender wanted a minimum of 10%. For example. if the lender told me I could lend up to £100,000 and I bought a property for £90,000, that does not mean the bank are still going to give me 100k just because of my affordability. They would lend me 90% of £90,000 which is 81k and I would still need to put 9k of my own money down.
I will have around £60,000 deposit to put towards it, so if I buy a house for £90,000 (which is the price at one I've looked at), I'd probably need to borrow around £50,000 at the most, to allow for conveyancing and other red tape.
The mortgage broker said to me that her words "she's done me an Agreement In Principle with Barclays and is meeting me next week to discuss proof of funds which may or may not change things". She hasn't mentioned a credit check but I think Halifax did a credit check when I applied with them. I go rejected from Halifax as my income was too low. They discount 40% of your income apparently.
I believe most lenders will only lend enough for purchase price however I may be wrong. So if you have 60k deposit, and the house is 90k, they will only lend you 30k. However, it is your choice to not put down all of the 60k. You could put down 40k, borrow 50 from the lender and then use the 20k you have left over to renovate. The more you put the less your repayment will be of course so entirely up to you, like others have suggested a mortgage advisor or financial advisor would be your best bet!
You have to have the money for fees in cash, so it would have to come out of your cash not the loan.
You’ll have to go through a filk credit check for a mortgage
You’ll have to go through a filk credit check for a mortgage
Interesting. So if I offer more than the purchase price it would come out of my own pocket then. The redecoration is something I could do once I get evened out. My main priority is getting my foot on the property ladder. Honestly people on this thread have been more help than my mortgage advisor has been so far. I wasn't able to get hold of her at all last week. I'd ask my father for advice but he's too busy with his new girlfriend and my brother's have never bought property before.
Ok, I'll play along.
So you have already talked to a mortgage broker? You didn't mention that before.
As others have said, you can't use the mortgage funds to pay for fees. And there's no way on God's Earth that conveyancing would come to £20,000 on a £90,000 purchase
I've never heard of any lender "discounting" your income by 40%
Discounting it for what reason?The lender works on the lower of the two - purchase price or valuation figure from a surveyor.
Example
Purchase price - £100,000
Valuation - £90,000
The lender would base all their calculations and what they would lend you on the lower figure. If you want to pay £10,000 over what a qualified surveyor says the house is worth then that's your look out and the lender will not subsidise you to do that.
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Also worth considering future proofing. If you’ve got a £60k deposit it might be worth looking for something a little bigger and borrowing more, as in the long run that would probably be cheaper than buying a small place now, then in a few years time needing more space and then having to pay again for financial advice, stamp duty, solicitor fees plus also estate agent fees for selling this place
They won’t just give you cash 
the house is basically their security for the loan, if you don’t make your repayments they will take the house. That’s why they will need to do a mortgage valuation on the property, to make sure it’s worth what they’re lending you and their loan is covered.
Is your uncle a cash buyer or is this purchase dependant on him selling something?
It’s a good idea to get your head around the concept of chains so you can understand where you fit in to the process and all the possible pitfalls and problems that may be out of your control.
Don’t rely on your brother for financial advice. Email a solicitor asking for a conveyancing quote, tell them all about the situation with the house you’re in, and the value of what you want to buy, and they will give you a breakdown of conveyancing fees and stamp duty. If the current ownership of the house you’re in is convoluted there will be additional legal fees.
I think you may have underestimated this process but it’s good that you’re seeking understanding and clarity. You’ll get there
you just need to walk before you run. (assuming you’re not trolling)
the house is basically their security for the loan, if you don’t make your repayments they will take the house. That’s why they will need to do a mortgage valuation on the property, to make sure it’s worth what they’re lending you and their loan is covered.Is your uncle a cash buyer or is this purchase dependant on him selling something?
It’s a good idea to get your head around the concept of chains so you can understand where you fit in to the process and all the possible pitfalls and problems that may be out of your control.
Don’t rely on your brother for financial advice. Email a solicitor asking for a conveyancing quote, tell them all about the situation with the house you’re in, and the value of what you want to buy, and they will give you a breakdown of conveyancing fees and stamp duty. If the current ownership of the house you’re in is convoluted there will be additional legal fees.
I think you may have underestimated this process but it’s good that you’re seeking understanding and clarity. You’ll get there
you just need to walk before you run. (assuming you’re not trolling)
I would recommend getting everything laid out with the appropriate people right at the start - it’s taken 5 pages of stellar advice for you to tell us your actual position so that’s maybe why people aren’t taking you seriously.
I hope this is a genuine thread. There are often threads started where people appear to get a thrill from the attention so I don’t think people can be blamed for being suspicious. That’s also not giving someone a hard time in my opinion.
That's a relief. I'll have more money to use for the deposit then. I had to speak to a mortgage broker to get the Agreement In Principle, no way would I even think about making offers if I hadn't got that!! LolAnd there's no way on God's Earth that conveyancing would come to £20,000 on a £90,000 purchase
I hope that people don't think that! As I have said from the start I am a first time buyer and have not been given much information from the bank/mortgage broker. Until today, I'd not heard of conveyancing or the fact that the lender won't go above the asking price, even if my Agreement In Principle allows for it. I know feel more informed and empowered in what to do. It's also put my mind at ease somewhat with regards to being outbid (as most buyers use mortgages, so they won't be able to go higher than asking price without dipping into their own pocket, unless they have savings).
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Don’t be too focused on being outbid. Bids are pretty much meaningless. What’s more relevant is a buyers position. Vendors would rather go for a lower proceedable offer than a higher pie in the sky bid.
The best thing you can do is get all your figures, house sale and paperwork in order and introduce yourself to the agents as a serious contender who knows what they’re doing and where they’re at. Once you’ve done that actually go in to the various offices so they can put a face to a name and you will spring to mind when they’re looking for buyers.
If you’re seriously in the running they won’t let you get out bid, they will want to get the vendor a sale at best possible price even if that means trying to get you into a bidding war.
A lot of agents won’t really want to engage with you until you at least get your sale well under way and can provide evidence of this, it sounds like there are months to go with your uncle purchasing, solicitor etc, so tell him to get a move on
The best thing you can do is get all your figures, house sale and paperwork in order and introduce yourself to the agents as a serious contender who knows what they’re doing and where they’re at. Once you’ve done that actually go in to the various offices so they can put a face to a name and you will spring to mind when they’re looking for buyers.
If you’re seriously in the running they won’t let you get out bid, they will want to get the vendor a sale at best possible price even if that means trying to get you into a bidding war.
A lot of agents won’t really want to engage with you until you at least get your sale well under way and can provide evidence of this, it sounds like there are months to go with your uncle purchasing, solicitor etc, so tell him to get a move on
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