Agony Agent

Readers put their property questions to our guest panel of experts: solicitors, mortgage advisers, property gurus and Help to Buy providers

THIS MONTH’S PANEL OF EXPERTS

Rupi Hunjan, MD, Censeo Financial

Marilyn DiCara, Independent Housing Consultant

Andrew Theoff, Managing Partner, Managing Partner, Direction Law Direction Law

TEST THE PANEL

We need your questions...

If you have any queries, or diffi culties in understanding the property buying process, our panel of experts is waiting to help. Send our team your questions on buying property, Help to Buy, legal issues, or your fi nancial problems and we’ll fi nd the best person from the panel to give the advice you need.

Email your questions to: lynda@ rsttimebuyermag.co.uk

Mortgage application

QI am a teacher and I’m looking

for a shared ownership property at the moment, for which I will need a mortgage – how should I prepare for a mortgage application?

Felicity Wilson, Rochester

ABuying a property is a big decision, so it’s vital that you do your homework. A mortgage is likely to be one of the largest financial commitments that you make in your life, so you want to get it right, having spent years to save for the deposit, legal costs, and household furnishings – often costing more than you think.

Lenders will need to see evidence of your income to check regular overtime and bonuses, they will review your bank statements to help establish your lifestyle and to check that your outgoings, such as credit/store cards and loans, including buy-now-pay-later arrangements, are accurate. Generally, a lender will need to see three months of payslips, six months of bank statements, proof of residency, and copies of your passport. You must make sure you have them to hand.

Many lenders offer mortgages up to 95% of the share, so you may only need a 5% deposit, but this could still be several thousand pounds. Much will then depend on two key factors – your employment status and your credit score.

Most lenders will require a credit check to make sure your credit score is sufficiently high for them to lend to you. Therefore, make sure that you don’t miss any payments, you aren’t carrying too much debt (unsecured loans and credit cards) and you have a good credit history.

It’s easy to check your score – just go online and register on a website such as Experian. Censeo-financial.com has lots of useful information to help you on your homebuying journey, including our easy-to-use online portal (portal.censeo-financial.com) which will assess your shared ownership eligibility and your ability to afford and sustain the mortgage, rent and service charge alongside your existing financial commitments.

Once you have been offered a home, you will usually have 28 days to gain a mortgage offer. The best way is through a specialist mortgage broker such as Censeo, as you need sound financial advice. Censeo has access to all the different lenders, and its experience saves you time and money as it knows the lenders’ criteria. The process of securing a mortgage is in two stages, first an agreement in principle and then the full mortgage application. While you are waiting, many people make the mistake of buying furniture for their home using credit. Although this is natural, taking out loans or maximising credit cards can invalidate mortgage offers, so be careful. Finally, when buying a home, you will need to protect you and your property with insurance.

Changes to shared ownership

QI am a first time buyer and I am now in the

position to start house hunting. I’ve heard of some recent changes to shared ownership. What are they and are they better for first timers like me?

Rosie Blackthorne, Streatham

AYes, some new features were introduced last year into a new model of shared ownership and some of these features have started to filter through into some new build homes. The core shared ownership model itself isn’t changing. It remains the part-buy, part-rent option for people, mainly first time buyers, to get their foot on to the homeownership ladder. The new features are positive and present an improved offer to people like you. Extra clarity within the providers’ key information documents for customers should also help you understand up front what’s included.

One of the main changes to the scheme is that your provider will contribute up to £500 each year towards certain essential repair costs during the first 10 years of a new home’s life. Another key change is an option to increase your ownership by 1% each year over 15 years from your purchase date, adding an extra 15% to the amount that you own and bringing you a little closer to owning 100%.

Other changes include a reduction in the minimum share percentage that providers are able to offer to buyers; this was 25% and, on the new model, changes to 10%; however, homes for sale with 10% shares aren’t expected to be widely available.

In any case, when you buy your home using shared ownership your initial affordability assessment determines the share percentage that you can sustainably afford to buy, and this may well be higher than 10% or 25%. Specialist advice from an experienced and qualified independent mortgage adviser will guide you here.

New homes and resales will continue to be available on the market with the previous shared ownership model and also, increasingly, with the new model. As often is the case, the devil’s in the detail, so make sure you do your research to understand the terms and conditions attached to these changes.

If you’re house hunting and see a property that you really like, find out exactly which model of shared ownership is on offer before you finally decide to reserve and buy that home to make it your own.

Marilyn DiCara

Conveyancing costs

QI am in the process of getting

quotes from conveyancers – they list a number of searches in the overall fee, but what are they and how much should they cost?

Jonnie Pickering, Maidstone

AThere are several searches that a solicitor may need to do as part of the conveyancing process, such as a local authority search, flood search, water and drainage search, environmental search and chancel repair search. Depending on the area, more bespoke searches such a coal and mining or HS2 searches may also be necessary.

The local authority search is an essential part of the homebuying process. Not only is it required by mortgage lenders, but the information it provides could be used to renegotiate your offer or may make you consider whether to commit to the purchase.

There are two parts to a local authority search. One is the Local Land Charge Register search which looks at any charges or restrictions on the property or land, such as whether it is a listed building or is located in a conservation area. It also looks at whether there are any planning agreements or planning permissions on the property.

The second part of the search provides information relating to public highways, proposals for new roads, rail development or other planning decisions that could affect the property. It also looks into whether the house stands on contaminated land or in an area affected by Radon gas.

As mentioned above, there are some additional reports that are not covered by the standard local authority search, including environmental searches to check flooding and pollution risks; water authority searches to establish where public sewers are within the property boundaries; and a chancel repair search which establishes if your property is liable for church repair contributions. The need for these other searches will be decided by your conveyancing solicitor or mortgage lender.

In terms of cost, unfortunately it is difficult to give you a definitive price as this can vary depending on which provider a solicitor uses, and which searches they choose to do; therefore, the amount isn’t standard from firm to firm. A firm may have an agreement with a search providing company and therefore can negotiate a flat rate which brings the cost down. Searches are also sometimes supplied by the housing association’s solicitors, wherein you are charged a small proportion, if buying a new build property.