The House Purchase Process

You'll need to make a number of important decisions as part of this step, but there's no need to worry. Your Simplicity Whole of Market Adviser will give you all the help you need to work out how much you can borrow and find your ideal buy-to-let mortgage. Your adviser can arrange for an 'in principle' decision from a lender before you find a property to confirm how much you can borrow. If it is a variable rate mortgage, don't forget to factor in potential rate increases when working out your budget.

It's important to remember that you're not looking for a home. Take the 'smart essentials' checklist with you to focus on the key characteristics you're looking for. Location is key - you can change the property, but not where it is.

Try to create a good relationship with the seller. Don't tell them you're planning to let-it-out - a lot of people have an emotional attachment to their old home and prefer to sell it to someone who'll live in it.

Ask the owner what comes with the house so you're clear on fixtures and fittings. Consider the cost of repairs or redecoration.
Check again that you can expect enough income from the property to make it worthwhile. Look at what's on offer from other landlords to see how they compare.

Take some notes after you've seen each property and don't look at too many one after the other ¬'viewing fatigue' won't help your judgement.

Ask the estate agent how long the property's been on the market. Anything over two months might give you clues about the asking price or condition of the property.

Suggest to the agent how much you'd like to pay. If your offer is accepted, it's subject to completing contractual details and the house undergoing a survey. There's no legal obligation at this stage to buy the property.

In Scotland, you need to ask your solicitor or conveyancer to 'note interest'. You'll be told if a closing date is set and the property won't be sold without you having the chance to make an offer.

You need to complete your mortgage application - it's easy with the help of your Simplicity Adviser.

Your lender needs to confirm that the property you're buying is suitable for lending purposes. Although you usually have to pay for this, the report is for the lender only and isn't a guide regarding the price you're paying. Because you'll have responsibilities as a landlord, it's probably best to opt for a more detailed survey such as a Home Buyer's report or Structural survey ¬particularly if you are buying a property that's either old or of unusual construction.

This is an area that can cause real problems for a buy to let purchase. In a competitive market the valuers are becoming increasingly pessimistic about the value and potential rent that may be received. If you intend to let the property to multiple people (eg students) make sure that the lender will calculate the rent on this basis (80% don’t!) and avoid being over optimistic about the rent. If the valuer does not agree with you then we can challenge the valuation. This must be backed up by facts such as proof that very similar properties are let for a certain rent or houses sold for a certain price.

Your mortgage application is agreed, and you'll get an offer letter from your chosen lender. This may be subject to certain conditions. Read it carefully and consult your solicitor or conveyancer.

Your solicitor or conveyancer will take care of the legal side of things like contractual arrangements, the lender's legal work, legal fees, stamp duty and local searches. You may need to get the legals moving before the offer arrives if you are in a hurry although if possible it is worth waiting until the offer arrives. Simplicity work closely with Goldsmith Williams – ask us for details.

Nothing's certain until exchange has taken place. If you have a deposit to pay, this is when you pay it. Once exchange of contracts has taken place, you're legally obliged to buy the property. You risk losing your deposit if you don't.

Once you've paid your deposit you're liable for buildings cover.

You'll need to take out the right cover to protect your property and furnishings. Your Simplicity Whole of Market Independent Adviser can help you with insuring your new property and yourself against events you can't predict. There are numerous policies on the market, so it's worth a thorough investigation to find out what's covered. Your premiums may also be affected by the type of tenant you opt for. You should also seriously consider taking out life insurance to cover any outstanding mortgage. This is essential (as is a partnership agreement) if you buy with a friend or colleague or member of family.

Finally, the completion day has arrived.
Time to collect keys and organise to change locks. Don't forget to cut several sets, for you, the letting agent and the tenants. Your first mortgage payment will typically be more than a month's interest, depending on the date you complete ¬so make sure you budget accordingly.
Congratulations!
Now get the place ready for your first tenants...