Problems with buying a home
Buying a house is the biggest financial decision you'll probably ever make and it's also one of the most stressful.
Buying a home is a complicated process and it can be daunting if you haven't done it before. You might run into problems with your mortgage, estate agents, surveyors or the property itself.
Problems with mortgages
Since the credit crisis, lenders have become particularly nervous about who they lend to and how much. This means all lenders will now want at least 10% of the property value as a deposit as well as proof that you are a reliable borrower.
For this it will look mainly at your credit rating - which is a personal history of how well you have managed all previous borrowing. If you are self-employed you will need at least three years' audited accounts to show proof of earnings, and will probably need an even bigger deposit.
The property itself might also present a problem when applying for mortgage. Some lenders are reluctant to lend on unusual properties, flats in a tower block or those with a short lease. If, after the lender has done a valuation survey, it decides the house or flat is worth less than the purchase price then they might not lend you all the money you applied for.
Problems with estate agents
Estate agents are normally hired to act on behalf of the person selling their house. They will show you (the buyer) round the property and act as a middleman between you and the seller.
They are legally obliged to pass on any offer to the seller but sometimes don't, for whatever reason. They might also pressure you into arranging a mortgage through their mortgage advisors, but you are free - and indeed it is a good idea - to arrange your mortgage independently.
Find out if the estate agent you are dealing with is a member of the National Association of Estate Agents. This is the industry body that sets down minimum codes of conduct.
Problems with surveyors
Once your offer's been accepted you should get a survey done to see if the property has any structural problems.
Some lenders are reluctant to lend on unusual properties, flats in a tower block or those with a short lease.
The surveyor's report will point out any issues you should be aware of before going ahead with the purchase. If the report doesn't mention any concerns and you have problems with the property after you've bought it, you might be able to claim compensation from the surveyor's indemnity insurance.
Problems with solicitors
When you buy a property you need to instruct a solicitor or conveyancer to do the legal work for you. Solicitors often appear to be taking too long to get things moving. If you think this is the case, don't be afraid to ask why and call them regularly for an update.
Ask for a quote for how much the legal work will cost before you commit to their services. If you later get the bill and it appears too high, check all the various costs are clearly itemised and ask the solicitor about anything you don't understand. If you're still not happy you can complain to the Council for Licensed Conveyancers.
Another issue with solicitors is negligence. If there's something that may affect the property's value, e.g. a new airport planned for nearby, and the solicitor didn't tell you then you might be entitled to compensation. In the first instance, take this up with the firm concerned. If you're not happy with the outcome, take your case to the Legal Ombudsman Service or Council for Licensed Conveyancers.
Problems with the property
The seller should clear the property of all their belongings before you move in. If they've failed to do so you can arrange to have their possessions removed and try to recover the money from them through your solicitor.
During the sales process, your solicitor should give you a fixtures and fittings list detailing everything the seller will leave behind, such as carpets and kitchen cupboards. If something has been removed that shouldn't have been then your solicitor should be able to resolve the problem with the seller's solicitor.
If house prices fall where you live your property might fall into negative equity. This is where your mortgage is more than the flat or house is worth. This is only really a problem if you want to remortgage or move house. Seek independent financial advice if this applies to you.
Thanks to CAB for help with this article.
By Emma Lunn
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