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Property Buyers Guide

Buying property is a major investment decision that needs a lot of thought. To make sure you are making an informed decision, it is best to refer to a buyers guide. This will guide you on the various considerations you need to look at before going ahead (or not) on that property purchase. It also guides you on the various options that are available in making that purchase decision as easy as possible.

Acquiring property can be easy if you know how and if you follow the proper steps. Here are some of the most important steps in acquiring that piece of property you have been yearning for:

1. Among the first steps to acquiring property is deciding what your property needs are. To aid you in making this decision, make a wish list covering preferred location, type of property (detached, bungalow), number of bedrooms, etc. Once you have done this, look for an estate agent. You can do this by looking at the telephone directory, calling and making an appointment to discuss your requirements.

2.Alternatively, you can use the Internet to search for properties that meet your requirements, shortlist those that look interesting to you and contact the estate agent under whom the properties are listed for an appointment and arranging viewing of the property.

3. At this point you will probably already know what the price of the property you are looking at is and it is time to determine what you can afford to pay at what rate. Rarely will you be able to afford to make full cash payment for the property, and even if you could and unless there is a big discount for cash payments, this option is not generally advisable, because of cost of money. What you will need to do is determine the initial payment you are willing and able to make and what periodic payments you can afford. A good rule of thumb for the periodic payments is that, in combination with your other repayment obligations should not exceed forty percent of your net monthly income.

4. Then you make your offer. You may have already organized your mortgage through a lender to finance the purchase but, if not, this is the time to go looking for the correct mortgage for you. There are a lot of companies offering mortgages but make sure you research these companies before making your choice (refer to the mortgage guide for more details). Choose the best offer which will apply to your payment capacity.

5. Typically, the lender will establish your ability to pay by referencing either previous months pay slips or, in the case of the self employed, previous year’s accounts. They will take into account assets and liabilities as well as determining ownership and value of the property to be mortgaged. Going through the legal process of a mortgage is facilitated by a conveyancer (solicitor) and the lender. Upon completion of the requirements, the legal documents will be prepared by the conveyancer and will need to be signed by both mortgager and mortgagee and duly notarized. This typically includes a promissory note, a mortgage agreement and disclosure statement.

6. Once you have found your property, have a mortgage and have begun making your payments for a reasonable period of time, it is now appropriate for you to start thinking of ways to make your mortgage work for you.

• One way is remortgaging, which is the process of paying off one mortgage with another one in order to free up capital or take advantage of lower mortgage rates at a certain point in time.
• Another way is to make mortgage overpayments whenever possible to lower the total interest you pay since the mortgage rates will be applied on a lower amount.
• Releasing equity (borrowing more money from your mortgage property on the basis of the increase in value of your real estate) is one way to generate cash even if your real estate is still under mortgage.
• If you have more than one mortgage, with the value of one property sufficient to cover the remaining capital of many or all of the mortgages, you may want to consider debt consolidation, which is simply defined as the process of placing all your mortgage obligations from several real estate properties into fewer properties.

Buying property is not an easy task after all. However, with a proper buyers guide, and an understanding of the concepts of managing mortgages, like remortgaging, mortgage overpayments, releasing equity and debt consolidation, the experience need not be painful; it could turn out to be profitable, too.

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