Home buyers guide

You have decided to buy a home - but what next?

How much can I afford?, how do I find a property?, what should I look for?, what type of mortgage should I get? All these questions and more are answered in Saffron's home buying guide.

Buying a house is one of the biggest financial decisions you will make in your life. It is a lengthy and complicated business, which while exciting is often fraught with stress and worry. But luckily there is a lot of good advice around helping you to make your home-buying experience as easy and problem-free as possible.

After finding a home you like, which can take anything from a few days to many months, the process from having your offer accepted to completion of the sale takes about 12 weeks.

It is important to have a good understanding of the process and here Saffron has created a guide to home buying.

What services do we provide?

There are two types of service available. One where we will advise you and make a recommendation as to the most appropriate mortgage after we have assessed your needs and another where you will not receive advice or a recommendation, but we will ask you some questions to narrow down the selection of products that we will provide details on. You will then need to make your own choice about how to proceed.

Call us on 0800 072 1100 or pop into one of our branches for a chat with our mortgage consultants.

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How much can I afford?

It is wise to know how much you can borrow before you start house hunting, the key to how much you can borrow is how much you can afford to pay back.

We offer affordability mortgages, which is excellent news for first time buyers and those who are generally debt free and with lower incomes. An affordability mortgage calculates the amount you can borrow on how much you can afford and not the traditional way, a multiple of income.

Affordability mortgages are based on how much you can afford and not your income level and are therefore tailor made for each customer's personal situation; making them ideal for first time buyers, and those looking at shared ownership.

For traditional mortgages, re-mortgages and home movers we base our lending usually as a rule of thumb, if you are a single applicant you can borrow up to 3.25 times your annual income or, for joint applicants, either up to 3.25 times the main annual income plus one times the second annual income, or 2.75 times the joint annual income. However, the key to how much you can borrow is how much you can afford to pay back and we will review with you your income and expenditure and, in some cases, be able to lend more and sometimes less.

If you are self-employed we usually require three year's accounts from which we generally assess the average of your net profit. These are the Society's guidelines and we are always pleased to discuss your individual requirements.

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Use our budget checklist to help you work out how much you can afford to put towards a mortgage - Once you've decided on how much you can afford, the fun starts with choosing a property

Net monthly income First customer Second customer
Monthly outgoings First customer Second customer
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Choosing a property

With so many factors to take into consideration when looking for a new house how do you give yourself the best chance of ending up with your ideal home?

Here's our top 10 tips for choosing the perfect property.

  1. Make sure you know what you can afford and check with your lender how much they are prepared to offer you.
  2. Decide what you want. Old or new? How many bedrooms? Do you need a garage? Would you like a large garden? Register with estate agents in the area where you want to buy and look at the local newspaper's property section.
  3. Make sure the neighbourhood you are looking to move into offers the amenities you require. Investigate access to public transport and local facilities, such as a library, and good quality schools.
  4. Check if there is a high crime rate or vandalism which could affect your quality of life.
  5. Once you've found a property you like, learn as much as possible about it.
  6. Write everything down so you don't forget later - see our checklist on the next page.
  7. Think past the décor - imagine the house in your style with your furniture. Check the state of repair of the property. If it needs renovation make sure you have the budget for it. Also, your final offer could be lower to reflect the extra work.
  8. Find out how well the house is insulated (ask to see in the loft) and how efficient the central heating is. Watch out for damp - mould, damp to touch walls, flaking paintwork and peeling wallpaper are all tell tale signs.
  9. Inspect the exterior. Check for subsidence (big cracks in the walls or an uneven roofline) and damp or root damage to foundations (big trees nearby can cause problems). These are potentially expensive to correct.
  10. Draw up a shortlist of properties and revisit these at different times of the day - make sure you feel safe in the area in the evening and there are no problems parking near the property.

Once you've decided on how much you can afford, the next task is to make an offer on the property

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When viewing potential homes it's worth making some notes to help you remember about each property. Download our viewing checklist here to help you keep all the valuable information about the properties you see on a single sheet.

Viewing checklist

Agent
Agent's telephone number
Property address
Price £
Type of property
Age of property
Ownership Freehold Leasehold Commonhold
How long on the market?
Why is the owner moving?
Number of bedrooms Double Single
Number of reception rooms
Kitchen
Type Galley Kitchenette Farmhouse
Utility area Yes No
State of repair Good Ok Poor
Bathroom
Colour of suite White Other
Seperate shower Yes No
State of repair Good Ok Poor
Ensuite? Yes No
Storage areas
Access to loft Yes No
Loft insulation Yes No
Other features
eg loft conversions,study,playroom

Garden
Enclosed Yes No
State of repair Good Ok Poor
Maintenance High Medium Low
Sheds Yes No
Other features
eg pond, patio, seating area

Parking Garage Driveway Street
Type of heating Storage Central Other
Type of windows Single Secondary Double glazed
Direction facing (affects light)
Condition of property
Interior walls
Exterior walls
Windows
Woodwork
Flooring
Roof
Drains
Guttering
Comments on local area
Schools/nursery
Distance from work
Public transport
Neighbours
Shops
Noise
Crime
Other information
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Making an offer

  • Once you've found a house you're happy with and are satisfied it's for you then it's time to make an offer!
  • Decide how much you want to spend (maximum) and stick to it
  • Assess how much interest there has been in the property. If it is new on the market the price may be high. Conversely, if it's been on the market for a while the vendor may consider a lower offer.
  • Discuss your proposed offer with the estate agent and take their views into consideration
  • If you are a first time or cash buyer, remember you are in a strong position when it comes to bargaining, whereas homeowners who still have a property to sell may not be so lucky.
  • Think about how much you may be paying for your mortgage if interest rates go up.
  • Remember - a property is only worth how much someone is willing to pay for it
  • In England and Wales, once your offer has been accepted the property may be advertised as "sold subject to contract" or "under offer". This means simply, that barring any other offers or unforeseen problems with the property, you have agreed to buy the house. At this point you are not committed to the sale and are able to pull out without penalty.
  • Once you've secured the home of your dreams, the next step is to decide which type of mortgage to get
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What type of mortgage should I get?

A wide variety of mortgages are available, visit our current range of mortgages, which aim to cover everyone's needs.

We recommend you come and talk to us no matter what stage you are at. If you've found a house, are still looking or just need some initial advice, come and see us or call us on 0800 072 1100.

We offer a range of mortgages for you to choose from. So, whether you're looking for your first home, already have a mortgage and are looking to remortgage, or need extra funds to help create the home of your dreams, it makes sense to talk to an expert.

Our experts will help you find the mortgage or remortgage package that suits you. Our broad range has something competitive for everyone: it includes discounts, further advances as well as options that track the Bank of England rate, so browse through our mortgages or give us a call free on 0800 072 1100.

  • Repayment or interest only?
  • Repayment and Interest only mortgages are available. Repayment mortgages mean you repay the loan and the interest on it in equal monthly instalments. Part of each month's repayment covers the interest on the mortgage and the remainder of the repayment reduces the capital whereas interest only means that only the interest on the loan to be paid, and the capital sum borrowed does not decrease. Usually you make a long term investment at the same time as taking out the mortgage which may produce a capital sum sufficient to repay the mortgage loan.
  • Fixed, discounted, or tracker?
  • Mortgages come in all sorts of shapes and sizes. What's best for you really depends on how much stability you want around your mortgage payments and what your current circumstances are. There's also your loan to value ratio and how much deposit you have. Don't worry, we're here to help you choose.
  • What is a Higher Lending Charge and will you have to pay it?
  • Please see our leaflet on Higher Lending Charge which explains the charge and if you will have to pay it
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Moving tips - timing

When you're getting close to the big day of moving, it's worth making sure you have done everything you can to make the process as easy as possible. Use our timing checklist here to make sure you get everything done.

  • Four weeks before moving
  • Confirm the date of your move
  • Get written quotes from several removal firms or ask friends to help out.
  • If you are going to need extra storage space, book it now.
  • If you are renting, inform your landlord.
  • Start getting rid of possessions you no longer need.
  • Check your home insurance cover.
  • Order any new furniture or carpets now and check delivery dates.
  • Obtain boxes, bubble wrap and strong packing tape.
  • Take measurements for carpets and curtains.
  • Two weeks before moving
  • Send change of address cards.
  • Pack non-essential items.
  • Arrange care for children during the move.
  • Notify your milkman and newsagent of the move.
  • If you are moving out of the area, de-register from your doctor, dentist and optician.
  • Arrange for your post to be forwarded.
  • One week before moving
  • Finalise arrangements with your removal company.
  • Defrost your fridge and freezer.
  • Pack a spare bag with clothes and toiletries for a few days.
  • Ask the estate agent to keep telephone, gas and electricity connected to avoid reconnection charges.
  • Call your telephone provider to set up a new account.
  • Moving day
  • List all items and boxes as they are loaded and unloaded.
  • Take meter reading at your old home and call the suppliers.
  • Crack open the Champagne!
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Moving tips - who to notify

Once you know when your moving it's time to notify all the various companies you deal with to make sure they know when you're moving. Use our notify checklist here to make sure you tell everybody that needs to know, you're moving.

  • Services
  • Water
  • Post office
  • Gas
  • Cable/Satellite and Internet companies
  • Electricity Rental companies
  • Telephone
  • TV licence
  • Health
  • Doctor
  • Dentist
  • Optician
  • Blood and other donor clinics
  • Financial
  • Employer
  • Banks
  • Building societies
  • Pension companies
  • Credit card companieas
  • Insurance companies
  • Council tax departments
  • Inland Revenue
  • National Savings and Premium Bonds
  • Social Security
  • Solicitor
  • Passport office
  • Motoring
  • DVLA
  • Motoring associations
  • Vehicle registration
  • Insurance
  • Other
  • Friends and relatives
  • Nurseries/Schools/Colleges
  • Subscriptions
  • Newsagent
  • Milk delivery
  • Sports club
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Mortgage Frequently asked questions

  • Will you require confirmation of my income?
  • The Society will require verifiable details of your recent history of earned income, whether you are in permanent employment or self-employed. If you have other forms of income these can, in part, be taken into consideration and with this information the Society will assess how much we consider you can borrow.
  • Will you require a valuation of the property?
  • We have to value the property to provide details regarding suitability as security for a loan. The valuation may also provide you with information regarding the state of repair and condition of the property. However, it is advisable to have a more detailed inspection. We will be happy to provide you with quotations for more detailed inspections.
  • How long will it take before I receive my mortgage offer?
  • You should normally receive your mortgage offer in less than two weeks from application. We then send a copy to your solicitor or legal representative.
  • What will the mortgage offer tell me?
  • It will confirm the amount we will lend you on the security of the property in which you are interested. It will also contain the standard conditions we set down and possibly some additional ones.
  • The offer will also detail your monthly payment and, if arranged by the Society, details of your accident, sickness and unemployment insurance, and the cost of buildings and contents cover.
  • How do you calculate my monthly payment?
  • At the start of your loan, the first payment you make will be calculated from the day of the completion to the end of that month. Thereafter, your payments will be calculated on a full monthly basis and each monthly payment (as detailed in the offer) will need to be made no later than the 28th of each month.
  • How is interest charged on my mortgage?
  • The Society charges interest on a daily basis. This means that the interest is charged on a daily basis on the debt outstanding.
  • What happens if the interest rate changes?
  • You will be notified in writing when the interest rate changes and of your new repayment amount.
  • Can I repay my mortgage early?
  • Yes. You can repay all or part of your mortgage at any time. However, a great deal of work is undertaken by the Society in arranging and agreeing the loan and if the mortgage is repaid within the first few years we reserve the right to recover from you some of our initial costs.
  • Certain mortgage types such as fixed rate and discounted rate may have specific early repayment charges. These will be detailed in your mortgage offer. Of course, if a loan is redeemed as a result of a new loan being required with the Society you will not normally incur such charges.
  • What happens if my circumstances change?
  • If your circumstances change, making your repayment schedule difficult, please contact our customer services department immediately. We will do our very best to be sympathetic and reach an agreement to enable you to get over any difficulties in the short and medium term.
  • Does the value of the property affect how much I can borrow?
  • The Society needs to ensure that the property provides adequate security. For residential purchases we normally lend up to 95% of the purchase price or valuation, whichever is the lower. However, if this is insufficient for your needs, do discuss it with our mortgage advisers who may be able to help - it costs nothing to ask!
  • Why do I require buildings insurance?
  • The value of the property must be protected against such risks as fire, lightning, subsidence, etc. This is essential for both you and the Society once contracts are exchanged. We will be happy to arrange this for you. If you prefer to arrange your own insurance we will require a signed declaration and a fee, payable on completing the declaration. Our valuer will tell you the recommended level of insurance cover required which will reflect the cost of replacing the property.
  • Will I need to insure the contents of my property as well as the buildings?
  • We would strongly advise you do so, and we can easily arrange one simple policy, underwritten by a leading insurer, to cover both the building and contents.
  • Suppose I have an accident, become sick or lose my job - can I protect my payments?
  • Yes. It is becoming more and more important to protect yourself against such events especially as the level of state assistance for home-owners who become unemployed has been reduced.
  • The Society has negotiated a competitive insurance policy which will cover you for up to 12 months whilst incapacitated. The policy has other benefits which include continuous cover whilst off work and benefits if you are self-employed. Staff at any of our branches will be pleased to let you have full details.
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Valuation and survey information

  • Valuation
  • By law we have to value the property to provide details regarding its suitability as security for a loan. This may also provide you with useful information regarding the state of repair and condition of the property. However, it is advisable to have a more detailed inspection carried out.
  • We will be happy to provide you with quotations for more detailed inspections.
  • Survey
  • Your home is likely to be the biggest purchase you'll ever make, so having a survey - instead of just relying on the mortgage valuation - could save you thousands of pounds in costly repair bills in the future.
  • Surveys should be undertaken by experienced chartered building surveyors - look for the initials MRICS or FRICS after a person's name. To find a RICS member call 0870 333 1600 or log onto www.rics.org
  • There are several different types of survey:
  • Full Building Survey: A full building survey (often called a structural survey) is a comprehensive and detailed report on its current condition and will take several hours to prepare, Each visible element of the property is inspected to ascertain its condition and suitability, necessary repairs and anticipated major expenditure will be identified.
  • RICS Homebuyers Report: The RICS Homebuyers report is prepared by the Royal Institution of Chartered Surveyors, although each element of the property is inspected, the level of reporting detail is slightly less and this is reflected in the fees charged. It is most suitable for modern properties.
  • Defect Report:A defect report concentrates on one particular defect, specified by the client. For instance, evidence of movement. It will report upon the cause of the defect and any remedial works necessary.
  • Note: In 2005/6 Government legislation will change the way we buy and sell homes in England and Wales. The responsibility for getting searches and surveys done will become the seller's.
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Solicitors and conveyancing information

  • Why do I need to use a solicitor and what is the conveyance?
  • The legal steps involved in buying and selling property are usually undertaken by a qualified solicitor or licensed conveyancer whose duty it is to check that the property has good title and you are buying what you believe you are buying. This protects you as the purchaser and the Society, as the lender of the money to you. We will also need to appoint a solicitor to act on our behalf - in some cases the same solicitor can be used, reducing your costs.
  • We are happy to recommend a solicitor to you, please ask our staff for details.
  • Exchanging Contracts
  • Conveyance is the legal document, which will finally transfer the ownership (title) of the property from the seller to the buyer.
  • Once your solicitor has satisfied the conditions detailed in our offer and completed his/her own enquiries of the vendor’s (seller’s) solicitors he/she will, on your instruction, exchange contracts with the vendor’s solicitor. At that moment the property becomes legally yours.
  • The contract will include a date agreed by you for final completion (payment). When the contracts are exchanged you will be required to pay the deposit on the property to your solicitor, which is normally 10% of the purchase price, and arrange for the property to be adequately insured. At this stage you are legally committed to the purchase of the property.
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Useful terms

  • APR
  • Stands for Annual Percentage Rate. This is a calculation that includes the amount of interest you pay plus any other fees charged such as arrangement fees for setting up the loan. It also takes into consideration when and how often interest and charges must be paid. An APR figure is intended to let you easily compare products from different lenders. The lower the APR the better the deal.
  • Gazumping
  • This is when a seller accepts your offer - then later accepts a higher offer from someone else.
  • Gazundering
  • This is when a buyer offers a lower price than originally offered just before contracts are exchanged hoping the seller will accept it rather than lose the sale.
  • Higher Lending Charge
  • A fee charged by the society if the amount you are borrowing is more than 90% of the purchase price or valuation, whichever is the lower. The one-off sum is usually added to the loan, although it may be paid up front if you prefer. The Society may pay this charge on your behalf on certain products.
  • Land registry fee
  • This is the fee paid to the Land Registry to record a change in the records following a transaction involving land registered with them. The change is usually notified to them by your solicitor.
  • Local Authority Search
  • This is intended to protect you from nasty surprises after you've bought your new house. Usually carried out by the solicitor as part of the conveyancing process, the search is a check against any plans which might affect the property you're considering buying.
  • Mortgage regulation
  • This new regulation has been introduced by the Financial Services Authority to ensure mortgage advice and advertising is not misleading and make sure mortgage lenders give standardised information about themselves and their products.
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Links

  • www.hometrack.co.uk
  • Hometrack is an independent property research company. It contains information on house price trends by postcode.
  • www.findaproperty.com
  • Enables you to search for properties and estate agents in your area.
  • www.rics.org
  • Find yourself a chartered surveyor by clicking onto the Royal Institute of Chartered Surveyors website.
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Tel: 0800 072 1100

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