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Eight out of 10 first-time buyers refused mortgage

Eight out of 10 first-time buyers refused mortgage

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Eight out of 10 first-time buyers refused mortgage

Buying a home is stressful - particularly when you are trying to buy when demand is higher than supply.

There are two main deciding factors for house hunters - money and time. Money is easily decided for a purchaser: you bid what you can afford and hope no one else outbids you.

Time is where you may be able to get a head start on other house hunters. Unless you are a cash buyer, you will need a mortgage to buy your home. Get your loan approval in principle as early as you can. That way, you will know your budget and as your mortgage has been pre-approved, you only need to finalise the details of the property with your bank if your bid is accepted. By having your loan approval tied down, you are probably giving yourself a two-to three-week head start on someone who has not got loan approval and must organise it.

Be sure to let the auctioneer know if you don't need to sell a property. If two parties are making the same offer for a house but one must sell property first, the person with no such difficulty will win every time.

Once your offer is accepted, you should have the property surveyed to ensure it is structurally sound. Forewarned is forearmed. If buying a second-hand house, the principle of "buyer beware" applies - basically you are buying the property as is. It is best to find out beforehand if there is a problem with the house. By doing so, you can choose not to proceed with the purchase - or if the problem can be addressed, the vendor could resolve it. Similarly, you might choose to organise the repairs yourself but have the purchase price reduced by the cost of these necessary works

When you are having the property surveyed, compare the boundaries to any title deed maps to ensure they match. Do not take it for granted that maps are in order. I have come across a case where in an estate of about five houses, there was a discrepancy in boundaries of about six feet. This gave rise to a situation where parts of the houses were actually situated on their neighbours' site maps.

When viewing properties, keep an eye out for extensions to old houses or attic conversions. Ask the owner or auctioneer if these comply with planning and building regulations. A lot of conversions do not comply with regulations, particularly where they are used as bedrooms. For example, if there are Velux windows in the roof, they may need planning permission. By finding these kind of things out early, you can ascertain if there are issues and if they can be rectified.

Draw up a list of what you need and are looking for and critically evaluate each property against this. Do not let your heart over-rule your head. Does the property have sufficient room for you and your family now for example? Is there a possibility of extending the house should you need to? There is no point buying a property that you are going to outgrow in a few years.

Call to the house the day before the purchase completes to ensure everything is as it should be and that any items included in the sale are still in the house. I dealt with a case a few years ago where a barna shed and some garden furniture were included in the sale - but when the sale closed, none of these items were to be found.

John Lane is managing partner of Holohan Law

Sunday Indo Business