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conveyancing for Second Time Buyer

As you progress in life you may find you have outgrown your home. Maybe because you have started a family or because your family is growing further still. Whatever your reason Attwells understands this can be an extremely exciting but challenging time. 

Colchester
Ipswich
London

Our moved before service has been designed to help you through this process offering you practical and legal advice, in addition the explaining of the conveyancing process and allowing you a quick move.

To arrange your conveyancing now simply click the link below. We will ask you to complete a brief form and pay a small deposit. This will be deducted from your final conveyancing bill which is not due until you exchange contracts. 

Colchester
Ipswich
London

Guidance for Second Time Buyers

Once you have arranged your conveyancer you may be keen to know the following:

How Second Time Buyers can get a mortgage

The first thing we would recommend is checking your credit score. According to Credit Karma a good credit score is between 604 to 627, with an excellent score considered to be between 628 and above. Normally credit scores are out of 700. 

A credit score is based on a number of things such as loans, personal finance and motor finance. Even bills such as your council tax and car insurance can affect your credit score. Therefore, it’s important all bills are kept up to date and your lending is below 40% of your credit limits. 

Any recent derogatory marks will affect your ability to secure a mainstream mortgage. A derogatory mark is caused by a default or CCJR and remains on your credit file for 6 years. However, if this occurred a few years prior to you applying for your new mortgage the affect will be reduced especially if you have maintained a good credit record since. If there were circumstances you feel worth disclosing such as the derogatory mark was as a result of being made redundant or due to illness, you can request a note is put on your credit file. 

Next you should research how much your current property is worth. You can do this via Zoopla.  They will offer you an average price based on your postcode and a price range based on the type of house you have. Depending on the condition of your house you may be toward the top or bottom end of the range. Features such as a new or recently installed central heating system, kitchen and bathroom can increase the price for example. Likewise features such as solid hardwood flooring and open fires can also increase your asking price. 

Once you have established the value of your home you need to deduct your outstanding mortgage. This figure will give you your equity - the money left over and have made. Your equity will be used as a deposit and deducted from the asking price of your new property. 

For example, if your home is worth £250,000 and you have £120,000 remaining on your mortgage, then your equity is £130,000.  

You will need to also consider your employment status. Lenders would prefer that you have been employed for at least six months. This is because your employer can no longer easily dismiss you. When applying for your mortgage the lender will require at least three months of pay slips. If you are self-employed you will need to produce your accounts for the last two to three years.

Based on this information the lender will work out how much you can borrow. They normally do this by timesing your gross income (what you earn before tax) by 4. Some lenders will times your gross income by 4.5 or even 5, but often these mortgages will incur higher interest rates making your monthly repayment higher. If you are buying as a couple you will be able to borrow more as your joint income will be times. We would recommend you arrange a Declaration of Trust if you are not married. Likewise, you may wish to consider a Will, this is particularly important if you have children.

Some lenders will also take into consideration benefits you receive or child maintenance. You will need to prove however that this is a guaranteed income, like for example the Personal Independence Payments (PIP) which are considered a lifetime benefit for those who are disabled. You may also be able to consider Child or Family Tax Credits if your children are young. This is helpful for single parents or households with only one full time worker.

Every lender will have their own lending criteria so if you are unsuccessful with one lender don’t give up. 

Colchester
Ipswich
London

Additional Moving Costs

  • Estate Agents Fees – Estate agents normally charge sellers between 1-1.5% of the sale price.
  • Energy Performance Certificate (EPC) fees can be between £35 to £120. Some properties are exempt for EPC and others will already have an existing certificate. This is the responsibility of the seller only. 
  • Our Legal Fees – Your legal fees are based on the property value. As you are buying your first home these are likely to be lower. You can calculate your legal fee by clicking here.
  • Land Registry Fees – Again this depends on the value of your property and if you are purchasing as a freeholder or as leaseholder. From £0 to £80,000 the fees are £20-£40. From £80,0001 to £100,000 they are £40-£80. £100,0001 to £200,000 you’ll pay between £95-£190. The next bracket, £200,001 to £500,000 you’ll pay £135-£270. For a property between £500,001 to £1,000,000 the fees are £270-£540 and finally for properties over £1,000,000 its between £455-£910.

  • Removal Costs – This very much depends on your needs. If you are moving out of a furnished home you may find it useful to hire a removal firm, locally Move It offer a packing and delivery service. If you have less to move you may find hiring a van is much more cost effective. In Ipswich Gallagher Car and Van Rentals offer van rental form £48.60 per day. In Colchester we would recommend Thrifty Car and Van Rental, their prices start from £73.98 per day. These companies by also supply van hire across the East Anglia.
  • Home repairs – If you have purchased a house that requires additional work as outlined below you will need to factor in the cost of repair. If it’s limited to décor you may consider this less important as it wouldn’t prevent you from moving in.
Colchester
Ipswich
London

Finding Your Second Home

If your budget is limited, you may wish to consider a house you can do up. Properties that require a lot of work are typically cheaper. You may also find those sold at auction cheaper due to their condition however buying at auction isn’t without its risk. Before you attend an auction you should visit our auction pages, where you can read further information. 

Properties with extra land or with a large garden would enable you to build an extension. You would however have to apply for planning permission. A good way of judging if planning permission would likely be granted is to look on the planning portal

Other factors you may wish to consider are the crime levels, type of employment opportunities and the local schools especially if you have children or plan to. Ofsted offers great information and ratings that you can view. This is worth researching prior to browsing as it may narrow your desired location to a postcode, a certain town or area.

Attwells Solicitors are property law experts. We can help you with conveyancing, buying at auction and planning. You can begin your journey now by arranging your conveyancing. This will allow us to complete a large amount of the paperwork before you make an offer. Often this results in you moving 3-4 weeks faster. 

Your conveyancer will also be able to help you with any planning concerns or questions and you will receive a 10% discount on any additional instructions.  

Colchester
Ipswich
London

Moving due to a separation or divorce

The same principles as mentioned above will apply if you are buying due to a divorce or separation. However, your equity will depend on your divorce settlement agreement or the financial agreement you have made with your ex-partner. Once you know this information you can factor it into your budgeting and use the money due as your deposit

However, this does not mean you are financially separated. You need to be mindful that although you are separated or divorced you may still be financially associated with one another. This will be the case if you have jointly borrowed money together. Any joint loans or agreements must be paid. A lender is unlikely to care about your reason for parting or not paying which can be frustrating especially if you feel you did not benefit from the finance. But it’s important you continue to pay whilst you resolve these issues to protect your future. When dealing with financial issues its always best to keep all correspondence in writing and make factual constructive points only. 

When you apply for a mortgage you must declare if you pay or receive child maintenance as this will affect how much you can borrow. If you pay child maintenance, you need to ensure your payments are up to date as this can affect your credit score.

If you are selling or/and buying a property due to a divorce or separation it is worth letting your conveyancer know. Upon request your conveyancer for example can ensure that letters are sent to another address. 

Due to a law called ‘conflict of interest’ you will not be able to use the same solicitors as your ex-partner. When you arrange your conveyancer, they will be able to help you with this. Undertaking a sale or purchase due to a relationship breakdown is common. We know most, if not all of the pitfalls and will be able to achieve best possible outcome for you.

You can get things moving quicker by arranging your conveyancing now. This will allow us to complete a large amount of the legal paperwork prior to you making an offer. This will result in you moving up to 4 weeks earlier. 

Colchester
Ipswich
London

Buying Out an Ex-Partner

When buying a partner’s share of the property you will first need to get the property valued. Normally you will require at least three valuations. The court or the solicitor on behalf of your ex-partner will calculate the average price. 

If you have a Declaration of Trust the percentage will already be predetermined. If you do not have a Declaration of Trust you will have to pay 50% of the equity to your ex-partner and be able to obtain a mortgage for the value of the property. 

For example: If you purchased a property for £260,000. Two years later you separate. In two years, the property value has increased to £270,000 but you have £240,000 remaining on your mortgage. You will need to get a mortgage for £240,000 plus pay your ex-partner £5,000, 50% of the equity, if you don’t have a Declaration of Trust.

You may be able to borrow the additional £5,000 when you effectively remortgage however, this will depend on your financial circumstances. Either way you will require a conveyancer to help you. We would recommend you arrange this as soon as possible as it will dramatically speed up the process in addition to giving you access to legal advice. 

Remember you will receive a 10% discount on every extra service you instruct Attwells for. 

Colchester
Ipswich
London

Are you buying as a freeholder or a leaseholder?

A freehold is when you purchase the entire house and land your house is built on. You are responsible for the repair and maintenance of the entire house and the land. You are typically a freeholder if you purchase a house or bungalow. 

A Leasehold is when you purchase space. You have the right to occupy the space for what is normally between 99 to 120 years. This duration is outlined in your lease pack, if you require a lease extension your conveyancer will be able to help. You are responsible for the repair and maintenance of the space, including internal walls, ceilings and floors. You are typically a leaseholder if you are purchasing an apartment or a Shared Ownership. 

Colchester
Ipswich
London

The Overall Conveyancing Process

When buying or selling a house it's natural to feel unsure and concerned about the process, however Attwells are here to help. Below we have outlined the conveyancing process, all the stages required to buy your second home.

Firstly, you need to arrange your conveyancer as soon as possible.  If you have done this the following stages can be completed prior to you making an offer on a property.

  • Accepting the quote: Simply click the accept button within your email or agree the fee over the phone.
  • Paying money onto your account: This effectively allows us to create a matter for you.
  • Welcome pack: We will ask you to complete a few forms which will help us progress your conveyancing. This can be done digitally – so please ask for a paper-free version. 
  • Instruct your mortgage valuation: This will also include a survey of the property.
  • Searches: We will undertake searches for you of the local utilities and authorities.

  • Draft Contracts: We will receive your draft contract and ownership information. 
  • Review contracts: Review and approves the contract. Plus, the ownership information and raise enquiries with the seller.
  • Searches are back: We will have received the results of all searches of the statutory authorities.
  • Send reports: We will send reports on the property, contract and mortgage and obtain confirmation of how you will own the property.
  • Send you documents to sign: We will also require your 10% deposit.
  • The moving date is agreed: All documents and the deposit are received from you. The contract is now exchanged, and purchase is now binding.
  • Statement: You will receive a statement as to money required to complete. Your mortgage funds will be requested from your mortgage provider. 
  • Completed: Move in and receive the keys. 

Congratulations you are now a property owner!

Colchester
Ipswich
London