It may sound unlikely, but we find that a large percentage of potential buyers start looking at the house of their dreams before sorting out their finances first. To be fair, this is probably a natural and frankly far more exciting activity. However, in reality what is the point unless you are sure of your financial position and obligations?
If applicable and before starting to look for a property, it is advisable to re-read the terms and conditions of your existing mortgage agreement, particularly if you are hoping to port your existing mortgage to another property. Also, check to see if any early redemption charges apply (usually x6 monthly instalments) as this may have a significant impact on whether you delay your next move or not.
If you are starting completely afresh as a first time buyer or with nothing to sell, try and speak with a qualified and most importantly fully independent mortgage adviser. If you call into your own bank or building society, just remember that while they may be lovely people and you may have banked with them for years, they are generally only able to offer you their product. This will leave you wondering if you have the very best deal on the market.
Once you have agreed a mortgage in principal, you can then begin your search in the knowledge that you have at least spoken to an adviser to work out what how much you might have or want to spend. An agreement in principle (AIP) is not a formal mortgage offer, but it is an indication of what you might be able to borrow.
Taking this action will also demonstrate to a seller that you are a serious and willing buyer and should also add weight to any offer you make on a suitable property.
Brearley & Rich
If you would like any further property buying tips or home sales advice please feel free to contact me on firstname.lastname@example.org or 01672 514820