Moving into your first home is an important milestone, but it may also feel overwhelming.
There is a lot to learn before you get the keys to your new house, including how to choose the right neighborhood and the right property, how to arrange your finances, and how the process works.
Fortunately, we’ve teamed up with Steps To Buy NI to create this 10-step guidance to help you get started on the right foot.
1. Evaluate the Benefits and Drawbacks
A home is a substantial expenditure that, with time, can grow and provide excellent safety. Yet, you can’t just abandon ship either. Having no landlord to turn to in the event of a problem, you’ll be liable for the property’s upkeep on an ongoing basis.
Of course, that also means you have more leeway to do what you please, and mortgage payments tend to be more secure than rent.
2. Seek out the most direct entryway
Most of us immediately think of a debt when we hear the phrase “home ownership,” but that’s not the only way to become a property owner. There are four that stand out the most, and they are as follows:
Mortgage: Typically, a mortgage from a bank or building society will require a down payment of between five and ten percent of the purchase price, with the borrower repaying the loan plus interest over a set period of time. Submit an application through a banking institution or advisor.
An alternative that may be less expensive is to purchase a share. Using a debt, purchase a portion of the property and then lease out the remaining space. Additional portions of the land can be purchased as funds become available. People with lower incomes, those who don’t qualify for a conventional mortgage, and those who can’t afford a large enough down payment should consider this choice. Shared ownership in Northern Ireland is offered by Co-Ownership and Fairshare.
Housing Executive and Housing Association tenants who have lived in their units for at least five years are eligible to purchase their homes through Right to Buy, also known as the House Sales Scheme. As an incentive to purchase the land, you can qualify for a price reduction. To learn more, get in touch with the Northern Ireland Housing Executive.
If you’re currently renting but would like to eventually purchase the house you’re living in, a rent-to-own agreement can help you get a foot in the door. A new construction rental agreement may include an option to purchase after three years. There will be more details in the co-ownership.
3. Get Your Financial House in Order
Get your finances in order if you’ve already made up your mind and the big shift is imminent.
Start by getting your financial house in order. How much money is flowing in and going out each month. Keep a record and get familiar with it because your lender will inquire about it when you apply for a mortgage.
The next step is to start putting money aside for a down payment. Put aside a little each month and try to keep that 5-10% number in mind. Indeed, that is your ultimate goal.
It’s important to remember that there are additional fees to consider beyond the initial payment. Other than if you’re a first-time buyer, there’s also Stamp Duty to factor in, as well as the costs of solicitors, movers, decorators, and furnishings. (Only applicable if the cost of your first house is below $300,000)
4. Discover the Ideal Home
Real estate brokers and internet listings are the two most common methods of finding a home. Both the property’s location and the amenities, family, and institutions that you’ll have easy access to are crucial.
Once you’ve discovered something you like, it’s important to consider whether or not it has adequate space for your requirements. Is there a need for significant maintenance or remodeling, which in turn would necessitate a monetary outlay? If you turn on the furnace or the lights, do you find that they work properly? Get a duplicate of the EPC (Energy Performance Certificate) at your earliest convenience.
5. Making a Mortgage Application
Start looking for a mortgage lender once you have a good notion of your budget’s limits. Discuss your future goals with a financial institution, mortgage broker, or financial advisor.
You will be provided with an Agreement in Principle that specifies the maximum loan amount that the provider is willing to consider. A selling agreement can be reached at this time.
The lender will want to see proof of your salary and your monthly expenses before proceeding. Typically, they will ask to see three months’ worth of pay stubs or bank bills, but may go back as far as two or three years if you’re self-employed.
The lender will conduct a valuation once they have accepted all of your paperwork.
A mortgage deal will be sent to you from the lender after that.
6. Put Your Name on the Papers
You are unable to simply back out of the deal after signing the contract. While committing by writing a contract is a necessary step, it does not automatically make you a part of the organization. If you’re at the bottom of the chain, the transaction may not close for several months, but you’ll know that date when you sign the contract.
When purchasing an established home, the purchase agreement is typically signed a few weeks before the closing date. It may take several weeks, or even months, to complete a new construction.
Before having the property renovated to your specifications, the contractor or developer may require a signed contract and a deposit of 5-10% of the total price.
Building insurance is another thing you’ll need to take care of after signing the contract, as your lender will want to see evidence of coverage before releasing the funds.
Eventually, your lawyer will ask you to autograph the paperwork.
7. We Are Down to the Wire
Now that you’ve reached the meat of the matter, you still have plenty to do. Obtain homeowner’s insurance coverage before the project is finished. If you want to avoid stress the night before, start packing a few cartons as soon as you have some free time. Prepare for your move by scheduling a moving truck and setting up your utilities in your new home.
Send all of the money to your attorney. This will cover not only the down payment, but also the estate agent’s commission, stamp duty, and solicitor’s costs. (if applicable).
8. It’s Finally Here!
Locate the key pick-up location and time ahead of time. Most of the time, this comes from the developer or real estate agency.
One of the most important things you can do to avoid getting a surprise charge a month or two after moving in is to have the utility meters read and recorded on the day you move in.
Verify that everything is where it should be, including any furnishings from your prior home. If not, you should tell your lawyer right away.
9. Yes, You Are Accepted
Good news, you made it! But keep yourself right straight off the bat with a few admin musts – make a list of matters where you need to change your address (banking, phone bills, car registration to name a few), let Land and Property Services know you’ve moved in and that you’re the new ratepayer on the property, and if you’ve moved into a new build, have a quick check for ‘snags’ and draw up a list for the builder.