The Financial Fairy Tales Blog

There really is a lot going on when we move home. From money changing hands to a full on moving process. It’s a process that brings up a lot of questions. Let’s break down some of the most common questions that are asked when moving home!

1 – How Do I Get A Mortgage?

Well, you need to go to the bank. A mortgage is a loan given to the buyer by the bank so that the buyer can purchase the property from the seller and then pay the bank back. Mortgages are usually paid back over a long term period. To gain access to a larger loan from the bank, you’ll have to pay a bigger deposit, just so the larger amount of money is at least secured in some way. There are plenty of different mortgage providers, so you can shop around. But why would you want to shop around? Aren’t they all just the same? Not really, each lender will add a different amount of interest on top of the repayments, meaning the same loan could be made more expensive.

2 – What Happens If I Don’t Pay Back The Mortgage?

If you don’t pay back the mortgage, your house will be repossessed by the bank. This is because the house is what you have borrowed against to achieve the mortgage in the first place. You’ll also lose your deposit. This isn’t an instant process, but it will be put in action within thirty days of a missed mortgage payment. Within ninety days the bank will have started the foreclosure process, which would be their attempt to repossess the house. This can lead to the bank auctioning off the site to reclaim the money. There are plenty of ways around this – just try to make back the payments. You could also try to sell the house.

3 – What Happens If I Can’t Meet Mortgage Payments?

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Refusing to pay a mortgage and not being able to pay are two different things. If you know that you won’t meet your monthly payment, you need to let the lender know. In almost all cases, a lender would rather you work to meet payments. It means they don’t take a loss on their investment in you. You could switch to simply pay the interest on your mortgage to lower the cost, or work out a new plan. In many cases, help is available for you to seek if you know you won’t be able to meet payments.

4 – Is Buying A Home Better Than Renting A Home?

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Some people rent, some people buy. Many people would say that renting is ‘dead money’ – your cash isn’t going anywhere. However, some people can’t afford to buy, or they might not be ready for the responsibilities that come with home ownership.

When is renting better than home ownership? Well, it’s circumstantial. If you are always on the move – renting might be better. If you don’t want to dive into the world of home maintenance, renting is better. The ‘dead money’ argument, for the most part, is true. Buying homes are solid investments, but a lot of the monthly costs involved with home ownership don’t go towards paying off the mortgage – insurance, tax, energy bills. Don’t kid yourself into thinking that dead money isn’t involved with a mortgage.

What’s more, interest rates are pretty low – meaning that in most cases, a mortgage might be cheaper than renting. This depends on your down payment as well, though.

5 – How Do I Handle The Legal Side?

This is where things get difficult. There are a lot of legal documents and papers that need to be filed when buying a home. While a keen legal eye might get far, it is worth leaving the job to experienced agencies in the field, like www.tbw.uk.com/conveyancing-law/property-lawyers-solicitors-bexleyheath.html who can handle a number of things. These agencies deal with areas such as declaring property boundaries, neighbour disputes, the fixtures included with the sale, building permissions, guarantees, regulation certificates, validate the owner of the property, register the site and much more. Of course, these can be handled by yourself, but it is worth hiring legal help. There are a lot of pitfalls associated with home ownership.

These cover the basic areas of buying a new home and should be more than enough to get you started with your interests. There are a number of areas to branch off into as well – such as researching down payments, mortgages and of course, the complex legal side of home ownership as well.