Buying Guide

What are the costs?

Legal Costs

The cost of conveyancing will be influenced by several factors:

• Not all solicitors charge the same
• Stamp Duty increase at different rates. Click here to instantly calculate the Stamp Duty
• Land Charges (Local Authority) Search - Varies according to the local authority. Typically £100 to £120 for a standard search.
• Land Registry All property transactions are now registered with the Land Registry. The cost of registering your transaction will vary according to the purchase price, which varies from £150 - £500.
• Mortgage Indemnity Guarantee Premium - Some lenders require an insurance policy to cover any amount borrowed in excess of 75% loan to value. The amount is either taken as a one-off payment, or sometimes it may be added to the monthly payments.
• Buying leasehold property can sometimes add to the costs

Tip: ask your solicitor for a breakdown of your estimated costs.

We have established strong ties with a selection of local solicitors who have consistently provided our clients with excellent levels of service at reasonable prices. We would be happy to recommend them to you and arrange for you to have a free quotation and consultation of the services they provide. Please call us on 01992 637777.

Mortgages

Financing your home

Financial services are thoroughly regulated and only those who are suitably qualified should give advice. We can introduce you to our independent financial advisers who will find the best mortgage deal for you. Your advisor will ensure that all the options available to you are thoroughly explained ensuring that you fully understand there recommendations.

If your Thinking of Buying or Selling a Property in Cheshunt and Surrounding Areas - FOR FREE IMPARTIAL ADVICE PLEASE CALL 01992 637777

It is preferable to consider mortgage options before you look for your new home. This way you’ll have a good idea of how much you can pay for a property and what the monthly cost will be. The best time to apply for a mortgage is likely to be when you have actually agreed your purchase, thereby ensuring you will be certain that you have the best deal that is available to you at that time. If however, you intend approaching only the one lender it is advisable that you apply for a mortgage certificate from them straight away in order that you be prepared when you find the right house to buy. Before issuing a certificate, the lender will probably take up references and make credit enquiries.

Mortgage Types

Repayment

As you pay off your mortgage every month you pay off both the capital (money you borrowed) and the interest (a charge for the Loan). You usually pay off mostly interest in the early years and then gradually more of the capital debt.

Interest Only

Only interest on the loan is paid to your lender. You will need to have a separate savings plan in order to pay off the balance of the loan at the end of the mortgage.

Combination

Some lenders may allow you to combine both repayment methods.

Flexible

These allow you to pay in extra amounts to reduce your outstanding loan or build up money you can draw on in the future. This means you can vary payments and take payment holidays. Interest may be charged during the payment holidays period but ultimately you could pay your mortgage off early.

Buy-to-let

Buy to let mortgages are only available for properties which are to be let out. Usually every type of mortgage such as variable, fixed and tracker mortgages can be made available - subject to the lenders deals at any time. Currently the maximum loan to value is normally 85% and there are various lender calculations used to ensure that the rental income you will receive will be sufficient to service your mortgage loan. We will be able to explain in detail how these lenders vary with their calculation.

Interest rate types

Standard Variable Rate

Mortgage payments go up and down in line with the standard variable base rate set by that particular lender. Each lender may have a slightly different standard variable rate which they set after the Bank of England has set its interest rates.

Capped Rate

Similar to a standard variable rate, but the rate will not go above an agreed limit for a guaranteed period. If interest rates fall below that set level, your rate will also fall, but never rise above the agreed level.

Fixed Rate

You will pay fixed payments for a guaranteed period. This rate will usually change to the lenders standard variable rate at the end of the guaranteed period.

Discounted Rate

Starts with a discount off the standard variable rate, for a limited period. Usually reverting to the lenders standard variable rate.

Tracker

A tracker mortgage will track the Bank of England base rate. The Bank of England base rate is set monthly by the monetary policy committee. If your interest rate chosen tracks the Bank of England base rate you will be subject to the rises and falls in line with base rate changes as and when they happen. For example some lenders may charge slightly above or slightly below the Bank of England base rate.

Other Costs

Solicitors

You will need to pay for a solicitor or licensed conveyancer to carry out the legal transaction on your property such as preparing draft contracts, applying for searches and reporting to the lender on the title of the property.

They will ensure that the property is legally yours on completion and look out for any issues that may affect it.

Application Fees

Some mortgage lenders now charge an application fee to cover their initial administration costs. Fees are especially common with limited offers like fixed-rate deals and may not be refunded if your purchase falls through.

Cashback Feature

You would receive cashback after completion. There may be an early repayment charge or a requirement to repay the cashback on early repayment during a specified term.

Higher Lending Charge

If you want to borrow more than 75% of the purchase price or valuation of your home, the lender may impose what is known as a higher lending charge. This is effectively insurance, for the benefit of the lender should you default on the loan.

Stamp Duty

Stamp duty is a tax on buying property, and generally applies to all residential properties worth over £125,000. It is 1% of the value up to £250,000, 3% up to £500,000 and 4% thereafter.

Finding your perfect home

Register with Woodhouse Property Consultants

To find your ideal property, we need to know as much as possible about your requirements. You can register with us either online, by phone or by visiting our office, where a member of staff can assist you with your search.

Once we have a clear understanding of your requirements your details will be stored on our state of the art estate agency software where you will be matched to properties that meet your requirements.

Details of properties can be sent to you by Text/SMS, Picture Messaging, Email or in the Post.

Online Area

All our properties are available on our website which is updated continuously. Once you have registered with us, you will be provided with a unique personal login code enabling you to access to your details. You will be able to save favourite properties, request viewings, access all features such as virtual tours, 3D walkthrough, view full property details, and change any of your details or requirements.

Our website allows you to have instant contact with our negotiators ensuring your requirements are dealt with instantly.

Viewing Properties

Here are some useful questions:

• Why is the owner selling?
• How long has the property been available on the market?
• Has a survey been carried out? Is the house structurally sound?
• Has any work has been done to the house? If so, when? Are there any guarantees/receipts?
• If there has been structural work, did they obtain Building Regulations consent?
• If the house has been extended, did the owner obtain Building Regulations consent?
• What is being left – carpets/curtains/white goods?
• Has the owner found somewhere to move to? If so, when will they be moving out?
• What are the neighbours like?
• Have there been any other offers?
• What is the Council Tax band?

Making an Offer

When you have found your ideal property we will present your offer to the seller in written and verbal form. Sometimes a degree of negotiation will occur between the buyer and seller to agree a final price. Until the contract has been signed there are no legal obligations for either party to fulfill completion. When you are ready to make an offer, telephone the Woodhouse sales office that arranged your viewing and speak to one of the team. The offer must be put forward to ourselves, never directly to the owner. We will need to know your purchasing position and information on who will provide and arrange your mortgage (if applicable) and details about the mortgage. It is usual to have between 5% and 10% deposit available on exchange of contracts. Any timescale requirements must be conveyed at the first point of offer. If there is another party making an offer on the same property you will be informed, however we are unable to divulge the specifics of other party. Most houses are sold as links in chains and the best way to ensure a chain progresses smoothly is through good communication. Stay in regular contact with your solicitor and estate agent to make sure everything possible is being done to speed things along.

Once the offer has been accepted

At this point your finances must be in place and you will have instructed a solicitor to act on your behalf throughout the conveyancing process. A survey will have been instructed by your mortgage company to ensure the property is worth the price you have agreed to pay and is structurally sound.

You will be ready to exchange contracts once the survey has been carried out, your solicitor is happy with the paperwork and you have received your mortgage offer.

Exchange of contracts

This is both parties formally signing an agreement to proceed with the transaction making it legally binding. It is usual for a deposit of between 5 and 10% of the purchase price to be paid at this stage, and a completion date will be set. Now you should start preparing for the move - arrange a removal company, notify banks, utilities, insurance etc.

Completion of sale

The final paperwork is signed by both the buyer and seller, your mortgage company pays the seller the agreed price and you pick up the keys to your new home!

Moving Costs

It is a good idea in the beginning to make a list of all the costs involved with moving in order to ensure you are financially prepared:

• Mortgage fees
• Financial advisor fees
• Mortgage Indemnity Guarantees (MIG)
• Survey fees
• Legal fees
• Removal costs

Jargon Buster

Advance

Another word for mortgage. You may also find reference to 'principal sum' and 'capital sum', which also refer to the mortgage, as does the term 'legal charge'.

Assignment

Certain items, such as leases and endowment policies cannot legally be sold, only assigned or reassigned. It amounts to the same thing: ownership is transferred in return for payment.

Bonuses

In the context of an endowment policy, it is the bonuses that will give you the profits at the end of the term. This is why it is important not to cash in an endowment in the early years.

Capped Rate

The interest rate charged on this type of mortgage will not rise above a certain level – the cap – within a certain period.

Charge

A charge against a property means that there is a debt. Usually the main charge will be that of the mortgage lender. However individuals can place charges against a property following a County Court Judgement. Before buying, a conveyancer should check against the Land Registry’s Charges Register for all charges, as the new owner will be liable if they are not discharged prior to sale.

Completion Date

The day upon which all moneys are paid and the keys are handed over.

Contract Deposit

A sum of money paid upon contracts being exchanged. Usually 5% to 10% of the contract purchase price. If selling another property at the same time, it might be possible to pass onto your vendor the contract deposit that your purchaser pays to you. Check this with your solicitor.

Conveyancing

The process of transferring the ownership of property from one person to another.

Covenant

A legally enforceable written promise relating to property documents, including leases. A restrictive covenant may bar certain activities such as extending a property. In leases, covenants may require floors to be carpeted so as to reduce noise levels for others, for example.

Discounted Rate Mortgage

A mortgage with a variable interest rate but discounted for a set period.

Disposable income

Income that is left after paying your mortgage, life assurances/pensions and other living expenses.

Draft Contract

The document that is prepared by the vendor’s solicitor setting out the Title for the property that is to be sold together with the terms of sale.

Early redemption penalty

Where a mortgage is for a fixed or capped rate of interest, or where it is discounted, there is usually a penalty to pay in the event that the mortgage is repaid before a set period of time.

Easement

The right of one person to use someone else’s property in certain circumstances. These usually occur where there is a need for access roads, drainage, telephone lines over another’s property.

Endowment Linked Mortgage

The borrower pays interest only to the mortgage lender. The Endowment is a form of life assurance policy with a built-in investment element that is designed to pay off the principal sum when it matures. It should be noted, however, that endowments are not guaranteed to be worth enough to pay off the principal sum on maturity.

Equity

The net value of a mortgaged property after the deduction of charges/mortgages.

Exchange of Contracts

Once the parties are satisfied that the Title is good and all of the other terms of the sale/purchase are understood and the necessary funding is in place, then both parties sign their part of the contract. Following this each solicitor sends their client’s part to the other side’s solicitor. Signing a contract does not bind a party to a sale or purchase. But once contracts are exchanged then the transaction becomes legally binding. On exchange of contracts the purchaser is responsible for buildings insurance.

Fixed rate

The interest rate is fixed at a certain level for a specific number of years. After that interest is charged at the variable rate unless the lender agrees to another period of fixed interest at the rate that is appropriate at that time.

FTB

First time buyer.

Gazumping

Raising the price of a property or accepting a higher offer after having accepted an offer from a potential purchaser.

Gazundering

Lowering the amount of an offer to a vendor, usually just before exchange of contracts.

Guarantor

Someone who guarantees another’s mortgage payments. If the borrower is unable for any reason to repay their mortgage, the guarantor will have to make the payments on their behalf, or possibly face having any property they put up as security repossessed by the lender.

House Doctor

An American idea and a recent import to the UK- someone who has expertise in presenting residential property to the market in order to make it more appealing to potential buyers. The intention is, of course, to boost the property’s value. This relies upon the fact that most of us totally lack imagination but know what we like when we see it!

(ISA) individual savings account

A tax-free investment scheme that has replaced Peps (Personal equity plans).

ISVA

The Incorporated Society of Valuers and Auctioneers.

Joint tenancy

When two or more people own a property in common, and wish the share of any one who dies to pass automatically to the survivor(s). In contrast, see ’tenancy in common’.

Land Charges Search (charges stated below might vary according to the local authority)

Local authorities carry out official local LAND charge searches for solicitors and licensed conveyancers on behalf of purchasers. These searches are on the land as described or marked on a plan as submitted. Most searches for residential properties are "standard" ones. These reveal the local land charges register items - developments, extensions planned to neighbouring property, highways changes immediately affecting the property (if any). There are a further 22 optional enquiries which may be asked for an additional £6 (approx.) each and for a fee of £15 (approx.) the council will answer further questions as required. A further option would be to search on the adjoining land and the fee for an extra parcel (submitted at the same time as the search) would be £10.20p (approx.).

Land Registry

The Government department responsible for keeping and updating details of all registered properties. '’Office copies'’ containing details of ownership and charges are readily available in writing and, nowadays, also available online to subscribers.

Lease

A contract for the occupation of a property.

Lessee

Leaseholder – the owner of a leasehold property.

Lessor

Landlord – the person who grants a lease and enforces its terms.

Loan-to-value

The ratio that expresses the size of loan that can be borrowed as a percentage of the valuer’s valuation of the property. For example, most lenders will grant up to 95% of their valuer’s estimate of its value – the remaining 5% deposit to be found by the borrower. Some lenders will advance 100% of loan to value, but usually charge a higher interest rate.

MIGP

Mortgage Indemnity Guarantee Premium. This is an insurance policy designed to protect the lender from any loss of money if your home is repossessed and sold for less than the value of your mortgage. You may have to buy this insurance when you take out the mortgage if you have a large loan-to-value ratio – usually if you are borrowing more than 75%. MIG can be expensive, often costing more than £1,000. Some lenders spread the premium over the term of the mortgage, others make no charge for it. Although you may pay for this insurance, any money that is paid out by the insurer goes to the lender.

Mortgage Offer

The formal offer of mortgage defines the amount that is to be paid together with all other terms of the loan, including the term and initial interest rate etc.

NAEA

The professional body for estate agents – The National Association of Estate Agents.

Net Profits

A self-employed person’s income is taxed according to their net profit after deducting legitimate business expenses. The amount that a self-employed person might borrow is usually calculated according to the level of their net profits. Thus, a creative accountant who succeeds in reducing a client’s tax liability might also inadvertently reduce the borrower’s borrowing ability.

Office Copy

Entries For every land transaction in England and Wales, the Land Registry records details of ownership and charges onto a certificate called the 'Office copy'. Whereas every transaction once might have entailed having to examine a pile of old transfers in order to establish good title, today the certificate from the Land Registry significantly reduces the amount of investigation that is necessary and, thus, the chances of error.

OEA

The Ombudsman for Estate Agents - the independent Government-backed body that exists to protect the public from rogue estate agents. Only 25% or so of UK estate agents are members. Check that you are dealing with an OEA member before complaining. If you want to make a complaint against a non-member then the OEA will not be able to help!

PIA

Personal Investment Authority – from March 2000 this will be known as FSA – the Financial Services Authority.

Preliminary Enquiries

Important questions asked by the buyer’s solicitor of the vendor’s solicitor before contracts are exchanged.

Additional Enquiries

A buyer’s solicitor sometimes needs clarification of answers provided to Preliminary Enquiries, or they may simply think it appropriate to ask extra questions.

Replies to Preliminary and Additional Enquiries

The vendor’s solicitor’s replies to the questions raised. Often it will be necessary to ask a vendor to assist in responding.

RICS

The Royal Institution of Chartered Surveyors.

Self-Certification

Commonly for self-employed people with a large deposit but limited earnings track record. (Inaccurately) known as a "non-status" mortgage. Some lenders will accept the applicant’s assessment of their net profits.

Stamp Duty

A tax paid by the purchaser. Please visit www.stampdutycalculator.org.uk to calculate the stamp duty payable.

Subject to Contract

For the entire period between a sale/purchase being agreed and exchange of contracts, the transaction remains "subject to contract" which means that it is not legally binding upon either party to proceed to exchange of contracts. Either party is legally entitled to withdraw or amend the terms of the agreement for any reason.

Tenancy in Common

If one person dies, his or her property rights pass on according to their will.

Term Insurance

A form of life insurance taken out exclusively for the period of a mortgage to protect the lender in case of the death of the borrower. This is an inexpensive form of insurance, however there is no investment element built into it. Thus, if the insured person lives then there will be no return on the premiums paid.

Title

This is the right to ownership of a property. Title Deeds are the documents conferring ownership of land or property. In the vast majority of cases, where the land is registered, the Title Deeds will be the Land Certificate or the Charge Certificate issued by the Land Registry.