MoneyNet by vidualnet.com

Estate agents, they are not the buyer’s friend… the seller, their client is who they are working for. So as much as you need to listen to the estate agent, know that they are trying to make the most amount of money from the sale because it impacts their commission. I don’t like estate agents, I think they charge way too much and are only interested in commission, even as seller. The fact of the matter though is you need them, so keep them on side and be nice, but always get a second opinion from an ally, a friendly.

Mortgage advisors (especially if they are aligned to an estate agent), my personal view on these cretins are they are con artists, they charge a fee to get you a mortgage (£500-£1000) on a product they get a commission on for selling to you (£1000 -£1500), on a product that they are affiliated with (so not necessarily the best product for you) and to achieve this they cast doubt and add fear to your dream of buying home... I have always gone direct to any major mortgage company and been £1000s better off. (I am sure there are good and honest mortgage advisors out there, this is just my experience and it has always been the same).

The mortgage company, start here even when you start thinking about buying, they should be the first people you talk to before ever contacting an estate agent, they are on your side and your friend, they might be scary but they are trying to protect their investment, they are really investing in you, so will protect you. I don’t think you can get anything better than from the main mortgage providers, well I have never found a mortgage cheaper in the broker market (brokers sell other providers products), so I’ve always used places like the Halifax, Nationwide etc. I contact them, talk to them, they will advise on the whole process. They are your biggest allies along with your solicitor.

Your solicitor, I would go to a private company, not one provided by the estate agent, though sometimes they can be useful, in specific scenarios, but they tend to work in conjunction with the estate agent, this only really works well when you are a seller. But your solicitor is your friend and ally, they are there to make sure things are legal and they have to protect you, if they are wrong, they are liable. So private company ones will do the best job for you.

Note though solicitors don’t actually charge that much compared to the time they are involved and only get paid at the end of the process, to make this worth their time they have lots of cases, this is why they are not very responsive as they maybe closing another deal, people get frustrated with this as it seems they are taking lots of time, they are not, be accommodating, the best way here is to start early and have clear timelines so they can plan their time around your deal, they will come back to you when they have news.

The sellers solicitor, you will not have anything to do with the sellers solicitor, you will not interact with them in any shape or form, that is done by your solicitor. I thought its worth noting so you know at least that they are involved in the process.

The sellers, this is interesting, because I’ve had different types, but I’ve found it’s a little bit like being in an airport where no one trusts anyone. But at the end of the day, they are just people in a system involved with the same people as you. I’ve found that being open and honest with the sellers outside of the people trying to get a piece of the pie works best. Stay in touch with them and keep a good communication bridge throughout will only make things easier.

Surveyors, this again is an interesting one, you have two types, which I will call the cheap one and the expensive survey, (don’t mix this with the mortgage company valuation survey, this is the one where the mortgage company values the house for the first time, and will determine the amount of money they will loan you).

The surveys I’m talking about are for the condition of the house, they are also not mandatory. The cheap survey is a visual inspection only, they also have to show that they have done a proper job, so even if they can’t see something they will still mark things down, this is because the surveyor can be liable for any major problems they don’t report and will caveat everything. They know their jobs and cover all possibilities; this makes the report results a liability covering exercise and may state things that are not actually problems.

The expensive one is a deeper survey, my thoughts on this depends on the condition of the property, if it’s very old or you can see it’s not been maintained, it may be valid to get it done, though, personally I would pay a builder to view it first with me and if they have any concerns get a survey done. There are benefits from the surveys though especially with the next Life Hack, when it comes to negotiating.

Life hack – Manage your mortgage deal

There are some simple things that you can do, and things to know once you have a mortgage agreement in place.

A mortgage in principle is not the agreed mortgage, the mortgage is agreed once you have confirmed how much you are borrowing, but the mortgage is then finalised based on what the Loan to value of the purchase will be, this is once you have agreed a price for the house. From here you will secure your mortgage, and there are some good tips to consider that could save you lots of money. Firstly, the agreement is time limited and its usually for a period of 3 months from when you agree your mortgage deal, so my first hack is making sure you know this timeframe (though, most mortgage companies will extend the time of the deal if there is not much of an extension needed). This is worth knowing, as there could be long delays when buying a house and you could need a new deal especially if interest rates change upwards. Now, the bit that most people don’t know, if you have a mortgage deal agreed and the interest rates go up, you will keep the current deal % for at least the period of the agreement timeframe, if the interest rates go down and the deal % changes downwards, you can contact the mortgage company and ask them to put you on the new interest rates for the same deal at the lower rate. The mortgage company will then send you a new deal, which will also have a new timeframe associated with it and it will be locked again until the timeframe runs out or you change it again. You can use this to your advantage, if there are indications that mortgage companies are going to increase the mortgage %, you can ring up your mortgage company and ask them to extend your timeframe, especially, if you are concerned your sale will take longer than expected, the mortgage company can reissue your current deal again, increasing the timeframe of the deal.

I have learnt to regularly check online at the mortgage company website and see what the mortgage product %’s at. If it’s gone down, I will call them up, and ask to be moved to the new interest rate, it’s very simple and easy and can be done over the phone. When buying my last house, there were many interest rate changes, I dropped my mortgage by 0.6% which was close to £1,500 a year. I also dodged an increase, as I had lowered and secured my deal before the increase happened, so as you can see managing your mortgage before buying a house is well worthwhile.

When I bought my first house, I knew I should negotiate and offer less, but I was scared of not getting the house, so I chickened out and offered the asking price. Funnily enough this was actually the right thing to do, your initial offer is not your final offer but it secures the process, you can offer anything at this point even if you can’t afford it (I’m not recommending this, but in principle you can). This is not what you are agreeing to buy it for. Buying a house is a long process, and lots of checks are made, such as the mortgage company will be valuing the house and will tell you whether they will lend you the money, if they won’t lend you want you are asking, they are basically saying it’s not worth what you are offering. This is a good point to go back and negotiate. Secondly if you do get a house condition survey, and it comes up with costs of repair, this is also another negotiation point.

What happened with me on my first house, I actually offered £200k (the asking price) but this was at the stretch of my budget and to get the 10% deposit to secure the mortgage I could only provide £20k as I only had £25k of funds and the difference was for all the tax and fees. I went back to the estate agents and they did try and force the additional money but I just could not move as I was limited, and it came down to either pulling out after 5 months or agreeing on the new price (the mortgage company valuation) of £190k. Now my condition survey also came back with £1,200, but as they had moved by 5%, I had to take that on the chin really but 10% of £190k is £19K for the deposit so really it was only £200. So we agreed on £190k.