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The Ins And Outs Of Purchasing A Home In Scotland

Posted 14 May 2021 by Keith Osborne

We find out what are the key steps in the process of successfully buying a home in Scotland...

Purchasing your first home is an exciting milestone in your life, but it can also be daunting. There are lots of things to consider when you purchase a property and various rules and regulations must be followed. You must have a clear understanding of the house buying process and know what to inspect. If you’re thinking about buying your first property, then here are the key steps you must take when purchasing a home in Scotland:

Calculate your budget

Your first task should be to sort out your finances and calculate how much you can afford. You are probably aware that you will need to save a deposit before you can apply for a mortgage. In some cases, first-time buyers can put down a deposit as low as 5% if they have support from a government scheme such as the First Home Fund. Unfortunately, the First Home Fund is now closed to new applicants. However, there are several other schemes designed to support first-time buyers – we’ll discuss these in more detail below.

As a general rule, you should aim to save a deposit that is between 15% and 20% of the property’s value. The deposit you are required to pay will depend on various factors including the lender that you choose, the value of the property, and the terms of your mortgage.

Keep in mind that your budget will also need to take additional expenses into account such as property solicitor fees, moving costs, and Land & Buildings Transaction Tax. Sit down and calculate how much you can afford before you start viewing properties.

Explore buying schemes

Several funding schemes have been introduced in Scotland to help first-time buyers get on the property ladder. Here are some of the most popular:

First Home Fund

If you applied for the First Home Fund scheme, then you will be able to apply for up to £25,000 to put towards your deposit. Unfortunately, the First Home Fund is now closed to new applications. However, there are several other funding schemes that can help you get on the property ladder in Scotland.

Shared Equity scheme

Zero C is now offering a shared equity scheme for qualifying buyers. This scheme is designed to reduce the cost of buying a house and to help buyers get on or move up the property ladder. With shared equity, you purchase between 60% and 80% of the property using your deposit and mortgage, then the remainder is covered by the scheme. This makes it easier to purchase a property if you have a low deposit or can’t get a big enough mortgage based on your salary.

Help to Buy (Scotland)

Help to Buy consists of two schemes: The Affordable New Build Scheme and the Smaller Developers New Build Scheme. Help to Buy (Scotland) is a shared equity scheme designed to help first-time buyers and existing homeowners buy new build properties. To qualify for the scheme, you must have a 5% deposit and your deposit and mortgage combined must cover at least 15% of the property value.

If you are eligible for the scheme, then the Scottish government will own 15% of the purchase price as security until you are able to pay for your home and own it outright. The scheme is designed to make it easier for first-time buyers to save a deposit and get on the property ladder. You can learn more about the Help to Buy (Scotland) scheme by visiting the official government website.

Find a property solicitor

In Scotland, you must appoint a property solicitor to act on your behalf when buying a property. Your property solicitor can guide you throughout the house buying process and answer any questions or queries that you have. Research reputable solicitors in your local area and choose a property agent with positive client feedback and reviews.

Apply for a mortgage in principle

The mortgage that you are offered will be influenced by your income, your financial commitments, and the lender that you go with. According to onlinemortgageadvisor.co.uk, “most mortgage providers will cap their lending at 4.5 times your income.” So, if your annual salary is £30,000, then you should expect to borrow up to £135,000. You might be able to borrow more, but this will depend on your personal circumstances and the lender that you choose. Keep in mind that some mortgage providers in Scotland will require you to pay a fee to reserve a mortgage agreement in principle.

Start viewing properties

You will now be in a position to starting viewing properties. Search for properties listed and make sure that you consider factors like location, number of rooms, local amenities, and so on. Take your time and remember that buying a property is a big commitment, so don’t rush it!

All properties for sale in Scotland are required to have a home report. A home report in Scotland will give you useful information on any properties that you are interested in and help you make more informed buying decisions. Read through the home report carefully before you make an offer.

Get your moving date!

Once your offer has been accepted, you will need to formalise your mortgage and complete the legal process. Your property solicitor will guide you through the paperwork and ensure that the documents are filled out correctly. The final step is to get your moving date and then start counting down the days until you move.

 

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