ADVICE FOR BUYERS STRAP
Buying your own home is an exciting time. But there’s lots to think about. From saving for a deposit, to finding a home, making an offer and securing the deal, here’s a guide to help you through the process. 1. Build up your savings The first step to getting your dream home is having sufficient funds. If you don’t have enough for a deposit, make a savings plan. You can also create a budget to see where you can cut back and save more. It’s a good idea to save as much as you can when planning to buy a home because: • a larger deposit may help you reduce your monthly repayments • you will need money to cover the costs of buying a property such as stamp duty, conveyancer’s fees, and moving • your savings can help you furnish or complete work on your new home
Need help with your savings plan? Book an appointment with an HSBC wealth specialist. Visit: www.hsbc.bm/wealth/ financial-planning.
2. Get an idea of what you can afford It is then important to get a rough estimate of how much you could borrow for a mortgage to give you an idea of the type of property and location you could afford. It may also help you work out how much you’ll need to save for a deposit. Try HSBC’s free online mortgage calculator to see how much you may be able to borrow. Visit www.hsbc.bm/ mortgages/calculators.
3. Know what type of property you’re looking for Take some time to think about what is important in a home versus what you’d like. This will help you narrow down your search when it comes to looking at properties. For example: What is important
What you would like
At least 2 bedrooms
Ideally 3 bedrooms
Outdoor space for dog
Private garden
Close to town
Water views
When making your list, think about your long-term needs. For example, if you’re hoping to start a family, finding a place with room to expand may mean that Bermuda Property Matters 2023
you won’t have to sell to buy a bigger place in the future. Location is also important. Visit different areas to get an idea of what it would be like to live there and what areas you can afford to buy in.
4. Get a Pre-Approval Letter A Pre-Approval Letter – also known as an Agreement in Principle – gives you a clear idea of how much you could borrow based on your circumstances. It usually involves a verification of income and savings towards down payment. A Pre-Approval Letter is not a guarantee that your mortgage application will be accepted, but it can help you understand your options and what you may be able to afford. It also shows real estate agents that you’re serious about buying a property. HSBC aims to confirm your preapproval on the same day that you apply. It is free and valid for 90 days. To learn more visit: www.hsbc.bm/mortgages/ preapproval.
5. Find the right home and make an offer With your list of requirements in hand it’s time to contact real estate agents, search for properties and arrange viewings. It may take some time, but when you find a property you want, deciding on the right price to offer can be exciting and scary. From asking the right questions to negotiating tactics, get tips on how to make an offer on a property. If your final offer is accepted – congratulations. If not, keep looking – your new home, at a price you’re happy with, could be just around the corner.
6. Apply for a mortgage Once your offer has been accepted on the property, you can apply for a mortgage. There are different types of mortgages to choose from. The one for you will depend on your financial situation, future plans and the type of property you’re buying.
The mortgage application process can take a few weeks. It involves detailed checks of your finances and your lender may want to conduct its own valuation on the property you want to buy. If your mortgage application is approved, your lender will send you an offer.
7. Carry out the legal work There will be legal work involved with buying a property which is carried out by a lawyer. Typically mortgages close within 30 days of sign off and there will be costs involved. Among other tasks, a lawyer will typically: • check the legal title to the property • manage the chain for exchange of contracts and completion • collect and transfer money including Stamp Duty (if payable) • carry out property searches to check for any environmental or planning issues that might affect the property’s value
8. Exchange contracts and agree a completion date The exchange of contracts is when lawyers swap signed contracts on behalf of you and the seller. It’s also when they’ll ask you to transfer your deposit over to them. When you exchange contracts – you’re legally bound to buy the property. You will need buildings insurance in place at this point. Home Buildings insurance protects you against the cost of repairing or rebuilding your home from scratch, should it get damaged from an insured risk, so it’s important to consider getting the cover you need. Let HSBC Insurance protect your home and property. To request a free, no obligation insurance quote visit www.hsbc.bm/insurance/products/homebuildings-insurance. Exchanging contracts is a big milestone, when you can do a celebratory dance. This is when you can pick up the keys to your new home and give yourself a pat on the back. 17
