Archive for the ‘Financial Planning’ Category

5 Pension Mistakes You Should Avoid

Wednesday, February 10th, 2016

5 Pension Mistakes You Should AvoidMany young people don’t think about their retirement. Even people reaching that inevitable age can bury their heads in the sand about building a pension pot; not wanting to face the truth that they are growing older.

This way of viewing retirement is understandable however the sooner you begin saving, the bigger the pot you will be able to build – something your future self will thank you for.

If you are unsure where to begin here are five pension mistakes you should avoid if you wish to maintain a similar standard of living in retirement to the one you have currently enjoy.

1. Not Having a Pension

The basic state pension will change to a flat rate of £155.65 per week from April this year (for people who have paid 35 years of NI). This equates to below £10,000 per annum. For many people this is a huge cut in their salary and not enough to maintain a reasonable standard of living.

You should also consider the fact that the pension age is rising over the next few years, so those wishing to retire in their early 60s will need to have other resources to live on until their state pension kicks in.

2. Delaying Saving

The value of your pension pot at retirement is based on the amount you put in and the length of time it is invested.

Whilst diverting your money into savings early on in your career may seem unfavorable when you are young, your older self will greatly appreciate it.

3. Not Understanding Your Options

There are a number of ways to save for retirement. You might be best suited to an ISA, whilst others may benefit more from a SIPP. What is best for you may not be the same as what is best for your friends or other members of your family. Understanding the difference and finding the option that suits you best is crucial for your pension pot to grow the way you want it to.

4. Failing to Review Your Pension Regularly

Do you know how much your pension pot is worth? Or which funds you have and their associated risk? If you currently have a financial or pension adviser, you may benefit from switching.

5. Not Seeking Pension Advice

The government launched a free service, Pension Wise, to help you understand what you can do with your pension pot money which people had found the website helpful to various degrees. It is important to note that the service offers guidance on what individuals can do, but not necessarily what they should do.

For detailed, individual advice on pensions it is worthwhile researching financial advisers who will be able to provide you with more specific advice on what you should do given your circumstances and attitude to risk.

Maxim Wealth Management offer financial advice from our offices in Glasgow and London. To request a FREE consultation please call us on 0203 841 9941  (London) or 0141 764 0040 (Glasgow). Alternatively you can fill in our contact form and we will get back to you.

Should You Change Financial Adviser in 2016?

Thursday, January 28th, 2016

Should You Change Your Financial Adviser in 2016-Is it time for you to change your financial adviser?

In the most simple terms if you didn’t receive the return on your investment that you expected last year, then yes, it may well be time to change adviser.

In more complex terms there are a number of areas to consider more closely when judging whether or not its time to change adviser.

This post will run you through some key areas you should assess so as to make an informed decision about whether to switch to a new service.

Was Your Invest Performance Lucky?

Over the last six years or so, most investors have been receiving a good overall return and this period of time has been what is known as a bull market. In laymen’s terms, this means your adviser may have simply got lucky; earning you money without skill or insight.

This all changed in 2015 however, when the stock market had its first negative return in six years. This means it’s wouldn’t have been unusual to have received a lower return last year, but was yours lower than it could have been? Given the performance of the market last year, after typical expenses it may have been normal to receive a negative 2 or 3% return, but anything from 5-10% and its time to start looking at what went wrong.

Performance

What kind of strategy did your adviser apply and did it work? For example, he or she may have gone for a low cost ‘match the market’ strategy, if so did this work? Alternatively they may have gone for a higher cost, ‘beat the market’ strategy, if so did this more costly approach see a good return for you?

Reports and Feedback

A good adviser will keep you constantly updated- and not just when times are good. If you don’t feel your financial adviser has built a sufficient relationship with you, or fails to provide thorough data and reports, even during slump times, then it’s almost definitely time to change adviser. If you didn’t feel you were given enough facts to make an informed decision, this could also be an alarm bell to change services.

Risk

Does your adviser work from your own feelings on risk? A good adviser will take your lead when it comes to risk and won’t coerce you into either taking a gamble you wouldn’t take or playing it safe when you’d rather gamble. If you feel you were talked into a risk strategy that wasn’t to your choosing, this is another alarm bell.

Expenses

Quite simply, how much did your adviser charge? Was this expense greater than your overall return for 2015? If so then it’s almost certainly time to change adviser.

Is Your Financial Adviser Working in Your Interests?

Whilst these factors all look at the finer number crunching of investment, the most important thing is your instinct. How do you feel about your financial adviser? Does he or she understand where you are in your life and what you are looking for investment-wise? Do they have experience across the investment market including pensions, equity release and retirement as well as general investment? Do you feel he or she has invested in you as a person and will be there to inform you and answer questions in every sort of market, good or bad?

Another key area is to look at how many products you have been offered. Do you feel the products you’ve been offered in terms of pensions for example, has been limited? A good adviser will offer all products and not just the ones they make the best commission on.

What Should You Do If You Are Concerned About Your Finances?

If you feel your financial adviser hasn’t performed to the best of their ability, then it’s time to change. 2016 will be an interesting year for investment, especially for those looking to make the most of their retirement and ensure they have something to pass on, so make sure your adviser is up to the challenge.

If you are unsure about your current financial adviser, or haven’t previously had financial advice, then please contact Maxim Wealth Management today on 0141 764 0040 (Glasgow) or 0203 841 9941 (London). Our team will be happy to help you make sense of your finances.

What’s My Pension Worth?

Friday, June 12th, 2015

FB - PensionsWorthIt’s hard to argue about the importance of saving for old age.  Those still of working age need to look at how they are going to finance their later years.

Those already retired need to think about getting the most out of their available finances.  The exact rules around pensions and savings can be changed in line with government policy at any given time.  Indeed the pension system has just been through an overhaul and with an election looming, politicians of all colours are setting out their plans for the future of pensions and the pensions of the future.  In reality, however, these plans only have any meaning to people who are focused on saving for retirement.  Let’s therefore look at some key questions on the topic.

What Is A Pension Pot?

Quite simply a pension pot is a common term used to describe savings which are specifically to finance retirement.  People contributing to a pension pot may get assistance from the government (in the form of tax relief) or from an employer (in the form of contributions).  Pension contributions are usually locked away until you reach retirement age.

How Do I Calculate My Pension?

There are plenty of online calculators to help with this.  It’s strongly recommended to keep track of how your pension is doing so that you know where you stand.  If you do decide you need to take action, sooner is usually better than later.   https://www.moneyadviceservice.org.uk/en/tools/pension-calculator

I Don’t Like What I’m Seeing, How Can I Build A Healthier Pension Pot?

You have three options.  You can save more money, you can manage your savings more effectively or you can do both.  It can help to look at this question in the light of your overall financial situation.  For example if you are carrying high-interest debt, such as credit-card debt, then it may well be in your best interests to focus any spare cash you have on paying this down.

Once you have cleared your debt, you can then divert the funds to building your pension.  If you do have spare cash and are in employment, then it may be useful to look at making extra contributions to your workplace pension.  This can be particularly helpful if your employer will top up any contributions you make.  If you’re unsure about locking cash away until you retire, then it may be worth looking at ISAs as an alternative.  Although contributions to ISAs are made out of post-tax income, generally speaking the income they generate is tax-free and the money in them remains accessible if you need it.

What Do I Need To Know About Getting More From My Pension Pot?

For many years getting more from your pension pot generally meant getting the best deal on an annuity.  Now there are vastly more options for those with pension pots.  With this in mind, it can be very helpful to get some professional advice before taking any significant decisions on how best to use your pension pot.

It is also advisable to keep up to date with any changes which may affect pensions.  For example at the current time, the Conservatives have a proposal to allow holders of annuities to sell them on.  If enacted this could have massive implications for existing pensioners.

It’s also worth remembering that, generally speaking, pensioners have access to the same savings and investment products as those of working age.  For example they get exactly the same ISA allowance as working adults. There are even some savings products tailored specifically to their needs (e.g. pensioner bonds). These can all help pensioners to make the most of their finances.

Protect Your Portfolio

Tuesday, May 19th, 2015

Protect Your PortfolioFor all the old jokes about change being the only constant, change also has a habit of making people nervous. Stock markets are ultimately made up of people – traders on one side and the employees of the companies they trade with on the other. Because of this the prospect of significant change can be reflected in the performance of the stock exchange. This effect can often be noticed around election times in general.

Sterling and the Importance of Image

Outside of the Euro zone, most individual countries have their own currency (at least officially). Therefore in order for international trade to take place, there has to be an agreed rate at which one currency is exchanged against another. While individuals may not think of themselves as being involved in the global market, the truth is that it impacts the daily life of pretty much everyone. Many of the products on supermarket shelves are imported and the UK exports both goods and services. Therefore the strength of any currency as compared to other matters to most people’s money management more than you might initially think. In many ways the relative strength of currencies can be seen as an opinion on the prospects of the countries in question. Therefore, when a country’s future is uncertain, such as in a period before an election, that country’s currency may become weaker in comparison to countries with more stability.

Will the Pound Sterling Start to Spin?

It is a reasonable expectation that markets will react when a new government is formed. If the market’s reaction is negative then it is entirely possible that there will be a fall both in the value of the stock market and the value of sterling itself. This may well be only temporary, but this may be of small comfort to investors who prefer stability. Those old enough to remember the 1990s may still recall “Black Wednesday” (16th September 1992) when sterling collapsed and the UK was forced to withdraw from the European Exchange Rate Mechanism. Investors might want to look at their options for protecting their portfolio against a severe drop in the value of sterling. This could be a particularly important step for those with a more international lifestyle, for example those planning on retiring abroad or sending (grand) children to study abroad.

What Does This Mean in Practical Terms?

There are many different approaches to investing, no matter what your attitude to risk you can probably find one which fits in with your financial plan. Some people like to invest directly into stocks and shares, others prefer investing in funds. Whether you are investing for growth or income, whether you specialise in a particular sector or prefer tracker funds or managed funds, you will have to understand that markets and currencies have their ups and downs. At the same time, investing can also be a classic example of the phrase “don’t put all your eggs in one basket”. Opening up your investing horizons to opportunities overseas and in other currencies can be a very helpful way of reducing your exposure to (temporary) issues with the UK market.

THE VALUE OF INVESTMENTS AND INCOME FROM THEM MAY GO DOWN. YOU MAY NOT GET BACK THE ORIGINAL AMOUNT INVESTED

You can find Maxim Wealth Management in the London Directory

Life Insurance Made Simple

Friday, May 15th, 2015

Life Insurance Made Simple“Expect the unexpected” may be an old cliché but the unexpected can and does happen. Hoping that it happens to someone else is a very poor strategy in terms of family protection. To put the matter quite simply, if you have people who depend on you in any way, you should be checking to see whether you need life cover.
Protecting my Family – Every Parent’s Priority

When making a financial plan, it’s entirely understandable that people give priority to their present-day needs before worrying about the future. It’s also understandable that people will think about common challenges, such as unemployment, rather than highly unusual ones, such as the death of a younger person. The good news is that insurers also understand that healthy, young adults are far less likely to die than their older counterparts. This means that, generally speaking, younger people can reasonably expect lower insurance premiums.

Understand What You Need – and What You Can Afford to Pay

The starting point for arranging life insurance is understanding what you absolutely need in order to keep going in the event of the death of one or more family members. This includes the death of anyone who makes a significant, non-financial contribution to the household, for example a home-maker or care-giver. The tasks these people do will still need to be done in the event of their death – and they’ll need to be paid for. This forms your baseline in terms of taking out cover. If you can afford to pay more than the minimum then you may choose to do so, to make life a little easier for those left behind after a bereavement. Alternatively you may prefer to take out a lower level of cover to have more money available for the present. If, however, you are unable to afford the minimum level of cover you believe you need, then it is very advisable to look seriously at ways to make up the shortfall. If, however, you really can’t afford higher premiums at all, then having at least some cover is usually better than having none.

Choosing the Right Type of Cover

The first question to ask is whether you need whole-life cover or term assurance. Whole-of-life cover, as its name suggests, offers indefinite cover. In other words, as long as you pay the premiums as agreed, your beneficiaries are guaranteed an eventual pay-out. Term assurance is cover for an agreed length of time, a term. If you die within this period, your beneficiaries will receive a payment, otherwise the policy will simply expire. Choosing which one is best for you depends on your personal situation. It should be noted however, that term assurance tends to be less expensive than it’s whole-of-life counterpart.

The second question to ask is whether or not you expect to need the same level of cover over the forthcoming years. For example, if the main purpose of the policy is to cover a mortgage (or other debt), then it may be appropriate to have a level of cover which decreases over time, along with the level of debt. If, on the other hand, the main purpose of the insurance is to provide for the future of young children, then it may be best to have cover which increases over time, to keep pace with inflation.

The importance of trust

Whatever form of cover you choose, you may wish to consider ring-fencing the proceeds of the policy into a trust. In simple terms, this separates the proceeds of the policy from the rest of the estate. This means that it is kept of out the probate proceedings, which may be very lengthy and can therefore be made available to the intended recipients much more quickly.

The Theory of Every Asset

Tuesday, May 12th, 2015

The Theory of Every AssetPhysics is a more exact science than finance, and judging by recent Oscar nominations, it’s often more romantic and glamorous.

Stephen Hawking, one of the great minds of the 20th Century was one of the first proponents of unified field theory, or the theory that explained the entire universe.

So far a unified financial theory has yet to be created, but let’s consider the possible components.

Many of us are acquisitive, and we look to maximise profit and minimise loss in our day to day money management. We balance the need to acquire against the need to limit risk and this leads to a level of security we are comfortable with.

The one insight that is more useful than any other to the novice, or even the seasoned investor, is that their principal role, above all else, is to manage and to an extent, tolerate risk.

A strategy of investing for the long term as opposed to looking for short term higher risk investments generally provides more stability over time.

This is not a new idea particularly, but, as with all the most enduring scientific discoveries in the past, it doesn’t need to be, is simply has to make sense and to work.

Scientists like Stephen Hawking have often revolutionised how we see the universe in small steps, building on the achievements of their contemporaries and as Isaac Newton put it ‘standing on the shoulders of giants’.

A good investment firm with sound investment choices operates in a similar way, using the knowledge of experts in their given fields, to maximise return by investing in funds and minimise risk for the investor.

A well managed fund will seek to perform these two roles and make the investor’s money work hard so the investor doesn’t have to.

Therefore all investors have to accept a degree of risk when they purchase, but in return, the risk takers are entitled to a share of any rewards the accrue.

There now follows a statement that almost goes without saying, one which any investor with a modicum of common sense knows, but one which, by law, we have to reiterate:

“Past performance is not a guide to future performance. The value of stock market investments will fluctuate, which will cause fund prices to fall as well as rise and you may not get back the original amount you invested.”

Yes, the value of investments can fluctuate, it can rise and it can fall. It is for this reason that the many investors ensure they access financial advice on how to invest their money.

THE VALUE OF INVESTMENTS AND INCOME FROM THEM MAY GO DOWN. YOU MAY NOT GET BACK THE ORIGINAL AMOUNT INVESTED

Fancy Retiring to an Exotic Marigold Hotel?

Friday, May 8th, 2015

Fancy Retiring to an Exotic Marigold Hotel?In the UK today 40 percent of people consistently put away too little money each month to fund the cost of their retirements. Too many people simply spend for today being unaware that tomorrow waits for nobody.

Throughout the working lives for many of us the day on which we will need to draw on our pensions seems consistently far away.

Even for those lucky enough to be enjoying their youth in a carefree way, the fact remains that by failing to invest in the present, the time they enjoy is being waste.

The government has announced in the last twelve months a huge series of changes and shake-ups in the pension market and savers will have more freedom than ever before to decide how they access their pension savings from the beginning of the new tax year.

The question of how much to put away each month into a pension is a complex one and in this blog, we will address what you need to consider before you arrive at a fixed sum.

The first thing to consider is what type of lifestyle you hope to enjoy once you’ve retired and at what age you see yourself retiring.

Many people leave their working lives before reaching the once statutory 65, and age discrimination legislation now prevents mandatory retirement at any age.

It is possible, therefore, to retire earlier or later, but you will need the finances to sustain you.

The rather bleak question of how long you will live in your retirement also needs to be addressed.

New pension rules ending the compulsory purchase of annuities means that when you do retire, a portion of the pension pot could be used to pay off debts such as mortgages.

This will leave savers with less of a recurring monthly income but also lower overheads and more security.

The chances are that if you are reading this, you may already have a pension plan. If you are a UK tax payer, you may also have access to a state pension through paying national insurance.

This means that you might be in a better position than you thought, so a first step should be an audit of what savings and investments you have.

The government’s Pensions Tracing Service, can help you find any obscure pots of money that you are entitled to. Alternatively if you would like some advice or help in devising a pensions strategy for the future or finding a pension fund that suits you, why not speak to a professional adviser.

THE VALUE OF INVESTMENTS AND INCOME FROM THEM MAY GO DOWN. YOU MAY NOT GET BACK THE ORIGINAL AMOUNT INVESTED

Personal Finance Business Directory from TheBusinessIndex.com

You Can Invest In Property With Buy to Let

Tuesday, May 5th, 2015

You Can Invest In Property With Buy to Let

Back in the day

Ten years ago, nearly every TV show across a wide range of channels was property related. Not only was it cheap, easy TV to make, but the public couldn’t get enough of it.

A Place In The Sun, Property Ladder, that show with Kevin McLeod where people turn barns into mansions, the list was endless.

The vast public appetite for such programmes and for property investment in general was part of a vast bubble that, as we now know, burst in 2008.

It’s easy to be wise after the fact, and Britain’s property market, particularly the buy-to-let market has never quite been the same since.

A super cheap buy to let market between 1997 and 2008 saw large numbers of ‘get rich quick’ casual landlords buy properties in the hope that they would have to do very little in return for a continual income.

Many left the market in 2008, and a few limped on, realising that being a landlord is often quite demanding.

There is still a place for serious buy to letters out there who can work and think strategically to build up a business.

If you are thinking about it as an investment strategy for the future, this blog will give you some useful pointers.

Different finance

You cannot use a conventional mortgage or insurance to buy a buy to let property and switching a regular residential home over to rental use requires a special buy to let mortgage.

Scrimp on this detail and the bank might call in its mortgage altogether.

A mortgage for a rental property will typically have a much higher interest rate than a residential mortgage.

The loan to value percentage (how much of the total value of the property you can actually borrow), is higher for a buy to let mortgage than for a residential mortgage.

This shows that banks are interested in lending to serious investors who can a higher percent of the value of a property themselves.

One aspect of the buy to let mortgage that makes life slightly easier for the purchaser is the fact that they are often interest only.

This means that each monthly repayment covers just the interest payment and not the loan ‘capital’. At the end of the agreement the capital can be repaid by selling the property and the seller can retain any profits.

This presumes, of course, that there are profits. A poor purchasing decision could leave you with negative equity, or you might find, as millions have in the last decade, that markets can slump as well as boom.

Business Strategy

The bank sees the borrower as a business partner, one which it hopes will be fit, healthy and alive towards the end of the agreement.

The risk averse banking sector is no longer throwing money at house buyers (private or rental), and expect a buy to let landlord to take on the bulk of liability.

This means that if you are going into the letting business, you need to make sure that you have a viable business plan.

Are you targeting young professionals, students, married couples or commuters? If you don’t have a niche market in mind, you need to get one before you go any further.

This will determine where, and what you buy. There is no point buying a flat for wealthy young professionals in bedsit land, or a property aimed at families in a row of student houses.

Your Legal Responsibilities

You will also be responsible to the local authority as well as the bank; a rental property has to reach the basic levels of safety, hygiene and energy efficiency.

It might be worth consulting your council’s housing department for further advice on your legal requirements before you proceed.

Remember as well that your property will be liable for council tax payments, a cost that most landlords pass on to the tenants.

If you would like further advice on the kinds of finance available for fledgling buy to let businesses, speak to a financial adviser who deals in mortgage advice.

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE

MOST FORMS OF BUY TO LET MORTGAGES ARE NOT REGULATED BY THE FINANCIAL CONDUCT AUTHORITY.

THE VALUE OF INVESTMENTS AND INCOME FROM THEM MAY GO DOWN. YOU MAY NOT GET BACK THE ORIGINAL AMOUNT INVESTED.

Thoughts For First Time Buyers

Tuesday, April 28th, 2015

Thoughts For First Time BuyersIf you have never taken out a mortgage before, this blog is aimed at giving you a balanced and informed view of your options and the mortgage market today by examining things you need to consider when you are buying for the first time.

Finances:

Since last April, the rules surrounding lending have changed, now lenders are required to carry out far reaching audits into personal finances to determine your monthly income and prevent financial over commitment. You will need to demonstrate that you are:

  • Saving monthly
  • Reducing outgoings
  • Reducing debt or
  • Debt free
  • Receiving a regular income
  • In possession of a clean credit rating
  • You will need to calculate the total amount you will need for a mortgage deposit and plan your savings accordingly.
  • It might be worth finding out if the seller is willing to do a private deal, thus cutting out the estate agent.
  • Watch out for extortionate service charges if you are buying a flat, these can significantly add to the cost of your monthly payments.
  • It might be cheaper to see if you can bid for a property at auction instead of buying it through an estate agent.

Government Schemes:

The Government has helped first time buyers and families moving up the property ladder with a landmark schemes in the past five years, the Help to Buy Scheme.

  • Help to Buy: Sky rocketing average house prices have placed home ownership in the last five years out of the reach of countless first time buyers and made it difficult for growing families to move up the property ladder. The Help to Buy Scheme has provided loans of up to 20 percent of the overall value of properties in order to help buyers afford the deposit. Now prospective buyers have to put down just five percent of the overall value of a new home.

Location

  • Look at the street you are buying in, if the house your are purchasing is far more expensive than the others in that post code, remember that the area will have its own ‘ceiling price’ based on what people in general are willing to pay in order to live there.
  • Is the area ‘up and coming?’
  • Are there decent schools?
  • Is it connected to good transport links?
  • What are the amenities like?

Legal Stuff:

There will be a number of compulsory costs included in the mortgage deal:

  • Legal Fees (these may be included in the overall price of the mortgage, so you don’t have to pay them outright but over the life of the mortgage they will be expensive).
  • Stamp duty.
  • Surveys on your new home (scrimp on these at your peril).

You might want to:

  • Find a cheaper solicitor than the one your lender is using.
  • Find out all the costs and ‘extras’ both estate agents and conveyancing solicitors are charging
  • Make sure everyone you are dealing with is covered by a professional charter or body and is insured.
  • Make sure your solicitor works for you, not the other way round.

You will also need to ask some searching questions to protect yourself against future heartache when you view a property for the first time, even if you’ve convinced yourself that ‘it’s the one’:

  • How long has it been on the market?
  • How many offers has it had?
  • What are the neighbours like?
  • Have there been any disputes?
  • Is there up to date paperwork for the gas and electricity?
  • Is there up to date paperwork for the boiler?
  • What is the availability of parking spaces?
  • What is the cost of council tax?
  • What furnishings or fixtures come with the house?
  • Has there been any history of subsidence or dry rot?
  • Is there anything hideous about to be built on your doorstep?

Getting clear answers to these questions will save you much misery later on. You might also want to:

  • Find out about the estate agent; are they famed for good customer service?
  • Find out about the management service (if you are buying a flat) do they have a good reputation?

Sellers

You need to have a good relationship with your sellers;

  • If you see a property you really want, get them to take it off the market as a condition of your offer. There is nothing worse than being gazumped by another bidder.

Setting up home

You will need to factor in the costs of;

  • Removals (get plenty of quotes for this as prices can vary widely).
  • New furnishings, kitchen or bathroom.
  • Improving the exterior of the building and the garden

Make sure also that you have quotes from workmen for the renovations before you buy, because afterwards the jobs you need doing could become more expensive, the more desperate they sense you are.

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE

So You’ve Found The House, How Soon Can You Move In?

Friday, April 24th, 2015

Move copyWhile having an offer on a house accepted may be a cause for celebration, it is actually a fairly early point in the procedure for buying a property. Here is a summary of the steps to complete before you pick up your keys.

Organize a Solicitor

You may be able to find a solicitor before you have an offer accepted, but the solicitor will only be able to help you once they know what specific property you want to buy. Their job is to check out the property thoroughly from a legal perspective and see if there are any potential issues of which you need to be aware.

Organize a Surveyor

There are two types of survey which can be carried out on a property. One is a valuation survey and the other is a property survey. In very simple terms, the valuation survey is to ensure that the price of the property is reasonable given the amount of the mortgage you have requested. In other words, the surveyor will only do enough to check that the mortgage lender is assuming a reasonable risk. A property survey is a much more extensive survey, which aims to identify any potential physical issues with the property. Property surveys are divided into three types. Home condition surveys are the most basic level of property survey. They cover the key aspects of the property and highlight any major issues. A home-buyer’s report goes into more detail, checking the property both internally and externally. A building or structural survey is the most detailed form of report.

Finalising the Offer and Confirming the Mortgage

Although these are two separate steps, they are very much interdependent. In a best case scenario, the property will be given a complete bill of health by both the solicitor and the surveyor(s). The sellers will still be happy with the offer and the mortgage lender will be happy with the valuation. If this is the case, then you can proceed to the next step – if you want to. It’s important to note that this stage is effectively the point of no return for both parties. Up until contracts are exchanged either party, seller or buyer, can back out. Once contracts are exchanged, if either party pulls out they could quite feasibly be faced with penalties.

If there are any issues identified with the purchase as it has been agreed, then these will need to be resolved or the purchase abandoned. Fortunately it may well be possible to resolve issues provided that there is communication between all relevant parties. If the issues have a financial impact, e.g. the surveyor identifies an issue which requires repair, then the sellers may be persuaded to accept a lower offer. Alternatively if the valuation comes in at less than the agreed sale price, sellers may also agree to a reduced price. Quite simply getting a mortgage is a necessity for many house purchases and only when this stage has been completed can buyers and sellers move on to the next step.

Exchanging Contracts

Pretty much what it says. Obviously buyers need to go through the contract thoroughly with their solicitor. You need to be absolutely sure you understand everything and are completely happy with it. In particular you need to be clear about what is and is not included in the sale. Once you have signed the contract you are committed to the purchase.

Completion and Paying Fees

Completion essentially means registering the sale with the relevant authority (this varies according to the specific part of the country where the sale was made). It also means paying the cost of the house and the money due to the parties involved in the sale. It may also mean paying stamp duty.

A Guide to Time-scales

In practice the shortest period of time in which to move from offer to completion would be around six weeks. This does, however assume, that everything is plain sailing and that all parties involved are working at maximum speed with no holidays (public or otherwise) or any other events (such as sickness or people changing jobs) to interrupt the process. Buyers should be prepared for the process to take longer and also be ready to keep tabs on the parties involved and check for progress when appropriate.

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE

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