There are lots of things you’ll need to take into account when buying a home and missing just one of them could end up costing you dear.
It’s easy to get caught out by certain details, skip important steps or gloss over things that you might regret not having paid more attention to later on, or which could even lead to your purchase falling through.
We’ve put together a list of 14 of the most common mistakes that homebuyers make and look at the best ways to avoid them, whether you’re moving up the property ladder, downsizing, or buying a home for the first time.
Speaking to an experienced mortgage advisor can help you to understand your options and get a great deal on your mortgage. If you’re looking for expert mortgage advice, you can speak to an independent mortgage broker with Unbiased. Every advisor you find through Unbiased will be FCA-regulated, qualified and unconnected to product providers – so they can offer you truly unbiased advice.
Contents
- Not getting a mortgage agreement in principle
- Going over budget
- Not checking your credit score
- Applying for the first mortgage you find
- Settling out of frustration
- Not negotiating on price
- Failing to factor in all your buying costs
- Not finding the right conveyancer
- Not fully understanding the difference between leasehold and freehold
- Missing important details
- Not fully checking out the area
- Ignoring things that lenders won’t like
- Not getting a survey
- Not asking enough questions
1. Not getting a mortgage agreement in principle
Before you start looking at homes, it’s a good idea to get a mortgage agreement in principle (or AiP) from a potential lender, also known as a “mortgage promise”. This is essentially a certificate that shows how much lenders are likely to let you borrow, and it tends to be valid for between a month and three months. You can find out more about how mortgage agreements in principle work in our guide What is a mortgage agreement in principle?
Bear in mind that this is not the same thing as an actual mortgage offer, nor is it a guarantee that you’ll be lent the amount shown on the agreement. It’s really intended to give you an idea of what your budget is, and therefore, what kind of homes you should be looking at. It also reassures estate agents that you’re serious about buying a property, and that you should be able to afford it.
You can learn more about all the different mortgage options that may be available to you, and how they compare, in our articles Mortgages for over 50s: What you need to know and Mortgages for over 60s: what you need to know.
2. Going over budget
It might be tempting to go a little over your budget if you find a property that you really love, but stretching yourself too thin financially can leave you open to risks in the future, such as not being able to afford your mortgage if interest rates rise. This is partly why AiPs make a useful guideline for your budget.
3. Not checking your credit score
It’s vital to check your credit score is in good shape before applying for an AiP or a mortgage. The lender will want to see whether you’ve managed debts responsibly in the past, and if your credit is poor, you risk having your application rejected. A rejection will further damage your credit score and make it harder to take out a mortgage elsewhere. Checking your credit score in advance gives you time to correct any errors, pay off any small outstanding debts and look for other ways you might be able to boost your score if need be. For more information and tips on improving your credit score, read our article on Seven steps that could improve your credit score.
There are a few ways to check your credit score for free. ClearScore, for example, offers a free credit checking service that accesses Equifax data. They also offer free identity protection that scans for stolen passwords, security problems and fraud defence tips. MoneySuperMarket’s Credit Monitor tool enables you to check your score using data from TransUnion and offers free personalised tips to help it grow. You can sign up with Experian and check your credit score with them for free and Totally Money also allow you to check your score free of charge using data from TransUnion.
4. Applying for the first mortgage you find
Mortgage rates have risen sharply over the past couple of years, although are now stabilising, so it’s vital you find the best deal possible to help keep your costs as low as possible. Many people simply turn to their bank when they’re looking for a mortgage, despite the fact that they might be able to find a much cheaper deal elsewhere.
That said, don’t just go for the mortgage which offers the lowest headline rate as sometimes these deals come with the steepest arrangement fees. Make sure you look at the overall cost of any deal you’re considering, remembering to factor in these fees. Find out more in our article Why the lowest rate mortgage may not be the cheapest deal.
If you are unsure about anything it can be good to speak to a mortgage broker or advisor to make sure you find the best deal for you based on your individual circumstances. Find out more in our article Should I get advice on my mortgage?
Speaking to an experienced mortgage advisor can help you to understand your options and get a great deal on your mortgage. If you’re looking for expert mortgage advice, you can speak to an independent mortgage broker with Unbiased. Every advisor you find through Unbiased will be FCA-regulated, qualified and unconnected to product providers – so they can offer you truly unbiased advice.
5. Settling out of frustration
Looking for the right home can be a gruelling process, especially if you’re buying in a busy market when properties often get snapped up before you get the chance to view them, but it’s important not to buy purely out of desperation or because you’re fed up. Buying a home is a long-term commitment, and if you settle for somewhere that isn’t suitable, you might later come to regret not having spent the extra time and effort finding the right property for you.
If you keep hitting dead ends then it can be a good idea to take a break from hunting for the time being and come back to it, perhaps when the market has cooled a bit. There will always be options that become available, so take your time and don’t rush into a home that you can’t see yourself wanting to live in for a long while.
6. Not negotiating on price
Even if you’ve found the property of your dreams, it’s still important to try to secure your new home for the best possible price. When house prices are falling this means it’s usually more of a buyer’s market, so it’s worth checking what similar properties in the local area have gone for recently before you put in an offer.
If they have sold for less than the asking price, then this should put you in a stronger position to put in a lower offer. It’s also worth finding out how long the property has been on the market for. If it’s been for sale for a long time, the vendor may be more willing to consider an offer that’s below the asking price. If you do plan to put in a low offer, make sure you can provide reasons why you have chosen to offer that amount, and don’t put in an offer that’s so low the vendor is likely to find it insulting, as that might make them less willing to negotiate with you.
7. Failing to factor in all your buying costs
In addition to the cost of the property itself, you’ll also need to think about all the other bills you’re likely to face when you move.
These include Stamp Duty, the cost of using a conveyancer, getting a survey, the moving process itself, and any changes or refurbishments you’ll want to make after moving in. Make sure you have factored in all these costs from the outset so you avoid any nasty surprises later on. You can find out more in our guide How much does it cost to move house?
8. Not finding the right conveyancer
A conveyancer (or conveyancing solicitor) is someone who will help tackle all of the legal hurdles of the homebuying process. The conveyancer’s duties include:
- Checking the house title, so that you can be sure you’re legally getting what you are expecting
- Working with the seller to organise the sale and legal transfer of rights
- Performing necessary checks and searches on the property
- Making other enquiries on your behalf
- Going over mortgage offers
- Keeping you updated and providing you with the relevant documents
- Paying Stamp Duty Land Tax
- Registering your ownership of the property with the Land Registry
With all of the paperwork and administrative tasks that go into buying a home, conveyancing usually ends up taking several weeks. It’s not uncommon for people to grow frustrated waiting to hear back from their conveyancer during the slower parts of this process. Because of this, it’s important to make sure that you find a conveyancer who is efficient and trustworthy. It can also be a good idea to ask them for regular updates, even when there has not been much progress or at times when no action is required from you.
Read our article How to find a good conveyancer or solicitor for more information on how to find a conveyancer to suit your needs. Or, you can search for a solicitor through the Law Society’s free Find a solicitor service. Make sure you check reviews for the solicitor you’re planning to use, so you can see how other people have rated their service.
9. Not fully understanding the difference between leasehold and freehold
Getting to grips with the difference between leasehold and freehold properties is particularly important if you’re buying a flat, because it affects what you will be able to do with your home and what kind of fees you’ll have to pay.
With a freehold property, you own not just the property itself but the land it sits on, as well as airspace above the property for up to 500 feet, for an unlimited time.
With a leasehold property, you own only the property itself, and not the land it sits on; the land itself is owned by a freeholder. You have to pay ground rent, service charges and maintenance fees, and any alterations you wish to make to the property have to be approved by the freeholder. You also only own the property for the amount of time indicated in your lease, after which ownership passes to the freeholder.
Read our article What is the difference between leasehold and freehold? to learn more about this important distinction.
Houses tend to be sold as freeholds and flats as leaseholds, though this is not always the case. For example, flats are occasionally sold on the basis that the owner will share freehold with others in the same building, while some new-build homes have been sold as leaseholds in recent years. Learn more about some of the things you need to watch out for when purchasing a leasehold home in our article Buying leasehold property: how to avoid the pitfalls.
10. Missing important details
It’s easy to focus on the big-picture things when viewing a home, but remember that even if a property looks ideal at first glance, there can always be details or hidden defects that could give you trouble later on. Some of these issues will inevitably be flagged if you get a survey, but it’s always good to know about them as far in advance as possible. Things to watch out for include:
Substandard plumbing. Check the pressure on the taps and ask about the radiators and boiler and whether the current homeowner has had any issues
The presence of damp. Keep an eye out for musty smells and discoloration on ceilings or near skirting boards
Limited storage space. Houses might look spacious when you view them but think about all of the things you have to move in and whether the property has enough room for them
Limited electrical sockets. This one can be easy to overlook. Think about all of the devices you use in your day-to-day and whether the plug sockets in the house will be sufficient
Poor soundproofing. This could be especially relevant if the property is on a busy road, near to a pub or train station, or if there are lots of neighbours in adjoining homes
Roof in poor condition. Replacing a roof can be very costly, so it’s worth finding out how old the current one is and whether it may need replacing soon
- Japanese knotweed. If the owner states on the property information form that they don’t know if Japanese knotweed is growing nearby, it’s worth getting a specialist to check. It can be highly invasive and can potentially cause structural damage, along with potentially affecting your ability to get a mortgage and making the property difficult to sell in future. Find out more in our article What is Japanese Knotweed and will it affect your mortgage?
Issues like this might feel relatively insignificant, but can end up being expensive and inconvenient to fix. Making a simple list of things to check for and ask about every time you visit a property could save you a headache later on. Alternatively, if you feel up to fixing one of these problems, you could use it to negotiate a price reduction on the property.
11. Not fully checking out the area
Buying a home is not just about the building itself. Getting acquainted with the surrounding area is very important too, as the neighbourhood can make a big difference to how you feel about your home. Things you might want to research and consider include:
- Is the area particularly noisy or busy?
- Is it within close range of shops, schools, or green spaces?
- If you drive, is there adequate parking space?
- If you don’t drive, then is there reliable and easily accessible public transport?
- What are the neighbours like?
- What is it like at different times of day? Have you visited at night?
- Are there any major construction projects planned in the surrounding area?
- Is the property in a flood zone?
Hopefully any issues such as major building projects nearby should be discovered by your conveyancer during their searches, but it’s always worth doing your own research too.
12. Ignoring things that lenders won’t like
Even if you’re happy with everything about a potential home, you’ll need to consider the kinds of things that might make lenders reluctant to offer you a mortgage. These can include:
- Flats above a shop or commercial premises. These can be at risk of being affected by noise and security issues among other things, which can negatively impact the property’s value
- Multiple unit blocks or properties with multiple kitchens. Lenders will likely take this as a sign that you intend to rent out part of the property, and may refuse to offer you a mortgage as a result
- New-build homes. Lenders will often refuse to offer mortgages on new-builds, as they are often priced highly and therefore may lose value in the first few years of ownership (in much the same way a new car does when you drive it off the forecourt)
- Flying freeholds. This refers to freehold properties which somehow physically overlap with other freeholds. This can be, for instance, because of a balcony overlooking the other property or a room situated above a shared passageway
- Homes constructed of non-standard materials, such as concrete.
Read about these in more detail in our article 10 reasons you might not be able to get a mortgage on a property.
Bear in mind that getting a mortgage on these types of property is not impossible, but it can make things more difficult. If you are strongly considering a property like this, then make sure you obtain any information that could support your application and consider seeking expert mortgage advice.
If you’re thinking about getting a mortgage advisor and would like to know how to find the right one for you, then you might find our article Should I get advice on my mortgage? helpful.
Speaking to an experienced mortgage advisor can help you to understand your options and get a great deal on your mortgage. If you’re looking for expert mortgage advice, you can speak to an independent mortgage broker with Unbiased. Every advisor you find through Unbiased will be FCA-regulated, qualified and unconnected to product providers – so they can offer you truly unbiased advice.
13. Not getting a survey
Your mortgage lender will always require a valuation of the property you are buying to make sure you’re paying the right price for it, but it’s up to you to arrange a more comprehensive survey if you want to check for any potential defects.
Most qualified surveyors will be members of the Royal Institute of Chartered Surveyors (RICS). Estate agents may attempt to recommend a particular surveyor, but it is a good idea to find your own, preferably one who lives locally and knows the area well.
The type of survey you will most likely need will depend on the home you want to buy. The cost of the inspection will depend on how thorough it is, the size of the property and whether or not it is listed. The main different types of survey are as follows:
Condition reports are basic checks for major risks, legal issues or urgent defects. These reports will simply list the issues with the property and may offer simple “traffic light” indications regarding its quality (green meaning everything is fine, orange meaning some cause for concern, and red meaning serious repairs are required). These are suitable for newer properties in good condition
RICS HomeBuyer reports are the most popular option. These are more thorough checks that include everything from a condition report, as well as checks for structural problems such as rot, subsidence or damp. This report will provide advice on repairs and maintenance. You can also pay more for them to provide an independent valuation of the property which, if lower than the price offered by the seller, could be used to negotiate the price down. These reports are suitable for conventional homes in reasonable condition.
Home Condition Surveys are similar to HomeBuyer reports, but they are carried out by the Residential Property Surveyors Association (RPSA) rather than RICS.
RICS Building surveys are more extensive, in-depth assessments of the property’s condition. The report will provide advice on potential repairs that may be required both now and in the future, as well as likely ongoing maintenance you may need to consider, as well as estimated timings and costs. These are suitable for older homes or homes where there may be an issue such as damp or subsidence
- New-build snagging surveys are basic inspections suited to new-build homes specifically
It’s worthwhile comparing quotes from multiple surveyors to find an option that is thorough enough to give you peace of mind, while still being affordable. You can find contact details for RICS surveyors in the area you’re buying using the RICS Find a Surveyor service and you can find out more about surveys in our guide Which property survey should I get?
14. Not asking enough questions
Buying a property is a huge financial decision, so if there was ever a time to not be shy about asking lots of questions, this is it. It can be good to draw up a list of questions to ask every time you go to a viewing, plus any queries that spring to mind for that property in particular.
This goes for your conveyancer too; don’t be afraid to ask them to clarify things or keep you updated. Even if something seems like it should be obvious, a moment of mild embarrassment could save you from a world of hassle later on. Nothing is more important than making sure you’re fully informed before you commit to buy.
Speaking to an experienced mortgage advisor can help you to understand your options and get a great deal on your mortgage. If you’re looking for expert mortgage advice, you can speak to an independent mortgage broker with Unbiased. Every advisor you find through Unbiased will be FCA-regulated, qualified and unconnected to product providers – so they can offer you truly unbiased advice.
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