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It’s an ownership thing.
How to buy a house - a property buying guide by Aster
We know buying a home can seem daunting – it is a massive deal after all. But we often find the best way to make it all seem a little easier, is to break it down and look at each bit step-by-step. So we have done exactly that – here you can find a step-by-step buying a house guide, including how buying through shared ownership can make each step a little bit simpler. Sounds too good to be true, we know, but let us show you how it’s not.
Saving for a deposit
Saving a deposit is the first step in buying any home – without one you simply can’t do it. Saving for your deposit before doing anything else also helps avoid any disappointment – you will know exactly how much you have and how much you can spend before you even begin your search. You will need to consider all sorts at this stage, even how you might have to cut back some spending.
But, good news, shared ownership enables you to buy a smaller share of your home and a smaller share means a smaller deposit – win, win!
Read more about saving for a deposit.
When you’re saving for your deposit you might want to consider the different schemes that are available to help you save e.g. a lifetime ISA. Everyone knows how hard it can be to save for a house these days, so luckily there are a few different ways to make it a little better.
Mortgages can be a daunting subject – and not something we were taught in school. So, understand what mortgages are available to you and how to get one is important. There are two main types of mortgages – variable and fixed rate and generally they are as they sound and differ based on interest rates. Shared ownership mortgages are very similar – you just have a smaller mortgage if your share is smaller. If you are purchasing a shared ownership home, Aster can help guide you through the process of choosing a mortgage. Read more about shared ownership mortgages.
There are some additional costs when buying a home which are useful to be aware of early on. On top of your deposit and mortgage you will need to consider other costs such as:
- Mortgage fees
- Valuation fees
- Survey fee
- Stamp duty on homes costing more than £250,000. If you’re a first time buyer, you won’t need to pay it on homes costing up to £425,000, and you’ll pay a discounted rate on homes up to £625,000. Want to have a look at how much this would be on a shared ownership home? Use the calculator by clicking here.
- Conveyancing fee
- Land Registry fee
You also need to consider your rent, if you are purchasing a shared ownership home.
Make sure to also consider costs such as buying furniture, moving costs, service charges and insurance.
Read more about associated costs.
Finding your dream home
This is where it starts to get exciting, you can begin the search for your dream home. Some top tips for doing this is to narrow down first by the areas you want to look in – do a bit of research on local amenities and attractions and start your search!
Read more about the shared ownership home buying process.
Once you have started your search, you will be itching to get out and view some of your selections. When you are viewing a house make sure you go in with an open mind, whilst also having an idea of what you are looking for. You must be practical at this stage no matter how much you might want to get over excited. Please bear in mind with any new build shared ownership homes you won't be able to view the property until we have taken handover from the builder.
Making an offer
So, you’ve found the one and now it is time to make an offer. How this part of the house buying process works will depend on how you are buying your home – buying on the open market will differ to buying a shared ownership home. This is something to consider when making your choice – shared ownership can take a lot of the hassle out of making an offer as it can be a stressful process, and isn't something you'll need to do when buying a shared ownership home. More information on how the shared ownership process works can be found here and you can find more information about making an offer on a house on the open market here.
Solicitors & conveyancers
When buying any home, you will need to work with a solicitor or conveyancer – they are similar however a solicitor can advise on a number of legal matters, whilst a conveyancer cannot. Whichever you choose they will handle all the legal aspects of buying a home. It is an important choice, as you want someone who will be able to guide you – luckily when buying shared ownership – you don’t have to worry too much as at Aster we can put you in touch with a team of solicitors and conveyancers.
Read more about choosing a conveyancer.
You won’t always need to do a property survey, especially not if you are buying a shared ownership home however if not you can do one to ensure the home is up to scratch and you are aware of any issues before you buy. It is important to remember a mortgage valuation is not a survey – they don’t offer any protection should something happen to the home after purchase.
As an Aster shared owner, you will need to have a survey or valuation carried out if and when you wish to buy more shares – this is a key part of the staircasing process. But don’t worry we can guide you through that entire process.
Read more about house surveys.
Completing a sale
The most exciting day – time to complete the sale. On completion day your mortgage lender will transfer your money to buy the home to your solicitor who will then give it to the housing association or sellers solicitor, and you become an Aster shared owner.
Then, you will get the keys and can finally move into your brand-new home!
So, there you have it – when you break it down into each step the process doesn’t seem so daunting. With shared ownership, especially, it doesn’t need to be a stressful process.
Read more about what happens on completion day.
How much money should I save before buying a house?
The amount you need to save will differ for everyone – consider what kind of house you’re looking at, the area and do some research on house prices. But also consider what you can realistically save. Make sure to not only think about how much your deposit will be but also fees and moving costs.
Shared ownership is great if you are concerned about saving a hefty deposit – as you only have to pay a percentage of the share that you are buying. Taking a huge chunk off what you would need on the open market.
When you buy a house what do you pay monthly?
How much you pay monthly totally depends on your house price, mortgage terms and rent agreement when you purchase a shared ownership home. A few things to keep in mind are the more deposit you pay, the less your monthly mortgage payments will be, the lower your house price the less they will be and the longer term your mortgage will reduce them too.
With shared ownership your mortgage payments are usually lower, but you will pay rent on the rest – so you need to consider both in your monthly payments.
Additionally, you need to consider whether you will be paying service charges – which is common for apartments, new builds and shared ownership.
Can you eventually buy a shared ownership property outright?
In most instances, yes, you usually can. A process called staircasing means that you can continue to purchase more and more shares until you eventually own the property outright (just ask our team if this is something you'd like to do and we can check the terms of the lease to make sure this is possible on the property you wish to buy).
The only aspect you will need to pay rent on is the grounds.
How do you find a mortgage lender?
There are various ways to find a mortgage lender – online research, asking friends and family and general word of mouth. Luckily, at Aster we have a selection of mortgage advisors who can help you choose the best mortgage lender for you – taking the hassle out of finding the right one.