As you may or may not know, we moved house about a month ago. While this does not exactly make me an expert in the property business, it turned out to be quite a long and drawn out process (which seems rather typical) and along the way I picked up some pretty good tips. Some were from the fair readers and commenters of this very blog, some were things that we did that worked out well for us, and some are things that we would have done differently had we been given the chance to do it again (erm, no thanks!) or the discovery of a time machine in our new cupboard under the stairs (well now that would be rather cool wouldn’t it!?).
As they say “sharing is caring” so it would be a bit mean not to pass such wisdom along to the next set of home buyers out there that might need it, so brace yourself… here come da tips:
1. Use Money Back Mortgages*
Thanks to regular commenter Living Cheap In London who put me onto this with this comment. Basically they are mortgage broker who pays you to use their services. Well that’s certainly novel isn’t it? To be clear, they obviously get paid a commission from the mortgage providers as well, but they pay you a percentage of that, whereas most brokers take the commission and charge you for their services, the cheeky blinders! Service was excellent throughout and despite a few hiccups along the way, our advisor really worked hard to get us the best deal approved. We got the £187.50 cash back paid into our account last week, roughly one month after completion. How awesome is that?!
They also do remortgages so use them even if you aren’t moving and just want to switch to the best deal!
*I have no affiliation with MBM and therefore am purely recommending them on having a good experience with dealing with them and the fact that I think they have a great business model! There are no doubt other cash back mortgage brokers out there so have a google around and DYOR as usual.
2. Beware of online comparison websites
If you go with MBM from #1 then you don’t really have to worry about this, but if not then be aware of the big comparison sites out there. Apparently some have been found out promoting offers that earn them more commission and hiding ones that don’t (I’m not sure if this includes the mortgage section but just something to be aware of!). If you don’t want to go with MoneyBackMortgages I would actually suggest paying for a mortgage advisor over and above just doing research using online comparison websites and picking one out yourself, because even if the paid for advisor saves you a fraction of a percent by finding a product that the comparison sites “forgot” to show you, it will more than likely cover the cost. Just make sure you go to a broker who covers the full market.
3. Use a cheap online conveyancing service
DYOR as usual but we had a good experience with Gordon brown law firm (again, no affiliation with this company). Sure, they took a while to get back with some of the queries, but last time we moved we paid twice the price for a local solicitor, thinking it would be worth the money, who would take even longer to get back to us, ignore our calls, and generally was never in the office anyway (“Oh sorry she’s on a long weekend skiing break until Tuesday”. “Oh sorry, she doesn’t work Wednesdays or Thursday”. Yea, totally worth the money for that!).
GBLF are a bigger company so if you solicitor is out of the office at least you have a chance of someone covering for them and things can keep moving. There are plenty of others out there, I repeat DYOR, if you find a good quote, then make sure you google the company first. I found some good information on ones to avoid on the MoneySavingExpert.com forum! The total solicitor costs for buying and selling came to about £700 (not including extraneous stuff like searches etc…) which I thought was pretty darn cheap.
4. Kill any balances on credit cards
In the months running up to applying for a mortgage, I would advise that you don’t indulge in any credit card hacking. Even rolling balances seem to look bad to the mortgage companies (for some reason) and this got me in a spot of bother in terms of delaying our application.
I’ll try to keep the story short: basically I decided to pay off the solicitor fees (everything, including stamp duty etc) to cream off an extra few pounds from my old Barclaycard cash back card. Pro Credit card hackers call this sort of thing “manufactured spending” and it’s quite rife in the good ole US of A (see MMM and FIFighter for some examples) whereas the opportunities over here tend to be few and far between. I checked with the solicitors and they said I could pay with VISA, for an extra 3% fee. However, my yearly reward month was coming up in which I got 4% cash back* on my top 5 purchases, so considering the fee’s were about £5,000, I decided it was a good idea to net the 1% difference for about a £50 “profit”. Not bad for a few emails and an online transactions worth of work… Or so I thought! Turns out the mortgage company thought I was some sort of crazy spendthrift ass-hat, and it took aaaaages (like way more than a month) to actually come through onto your credit report that I was paying off the balance in full each month, so all the while they were waiting for that to show up, we could not proceed any further with the application. It totally wasn’t worth the £50, so as I say, I would in fact just stop spending any money on your cash back cards for a couple of months and forgo the likely £10-£20 you would have earnt, so the mortgage company can see you have zero (hopefully!) debt, other than maybe your existing mortgage if you are moving.
*Unfortunately Barclaycard have stopped this system and it’s a straight up 0.5% cash back year round, which while better than nothing, really sucks compared to the old system! So there really is little to gain from this kind of manufactured spend nowadays 🙁
5. Delay any big purchases
In a similar vein to point four, try to delay any big purchases that may look bad before applying for a mortgage. Now the government is cracking down on the affordability aspect (since April 2014), you need to keep silly stuff off your balance sheet. They also look at your monthly commitments (gas bills, gym, car credit repayments!). As a frugal dynamo this should be fine for you, as I am sure you have killed most of your unnecessary monthly payments, but it is something to be aware of.
6. Be patient
Not really a tip as such but more on psychological aspect. How? Look to the stoics. Don’t get caught up in all the little details. Realise that all the set backs will be totally forgotten about within 6 months when you have finally moved. Any problems that may come up have happened thousands, perhaps millions of times, to other people when they have moved house, and have been overcome (eg. Problem on the survey, etc) or that if the problem really is too large then it just wasn’t meant to be, but you’ll find likely end up finding something better! Remember that any delays generally means that you can save more money (assuming you aren’t downsizing) so every cloud has a silver lining, and all that.
7. It ain’t over till the fat lady sings
As I found out with a bit of a slap in the face from Mr Real-ity Estate, just because you have had offers accepted on both sides, and even a chain complete, doesn’t mean that you are anywhere near moving yet (see article and subsequent comments from myself here!). Again be patient, hope for the best but be prepared that it might fall through before you get to completion. If you have your heart set on your dream house, there is surely something similar (or better!) waiting for you if you look hard enough.
Any more tips for moving house I have missed out on here?! Input from the intelligent and good looking commenter crowd are as usual more than welcome!
Discussion (18) ¬
We’ve just bought our first house at the start of this year and it’s an exerience I’m in no hurry to repeat! Some great advice, i had no idea about the cashback brokers but I guess it makes sense as they’ll be getting at least a grand in commission on the average mortgage deal.
Yea it’s pretty stressful isn’t it!?
Yep, at least they are willing to give some of it back to the punter, it’s a small win for the little guy!
Hi TFS,
We bought 5 years ago and I’m glad that we’re happily settled in our home as I’m not in a hurry to move again.
I like the list you provided above, particularly the cashback brokers. I’ve never heard of them and I would consider that option if we cross that bridge again.
I agree with your point on patience too. It was much more time consuming than I was expecting.
Thanks for collating and sharing your recent experience!
Huw
He he, bit of a theme running here already re: the moving house process I am feeling…
Patience as they say is a virtue, it’s tough to remember when you are in the thick of it chasing up solicitors, mortgage companies and estate agents though isn’t it? 🙂
I was in a chain once, and once only, never again. Since then I’ve sold, moved out, then started the buying process. While it might not work for everyone, it was much less stressful. Even less stressful is my current situation of not having a mortgage at all. My final house will be bought when I’m FI, cash, look at it as me paying off the mortgage on the house I don’t yet own, but to the Bank of Me. Cuts out a whole load of costs! Well done with move TFS, hope you’re happy there for many years to come.
That is the best way to do things if possible, although there is no way of stopping the next house you buy being in a chain is there? Although having already moved out you can be far more flexible, the patience factor still could be pretty important even in that situation.
It’s a novel strategy that I’d like to here more of your thoughts on and exactly how and why you are doing it this way. Are you assuming that your savings and investment growth will outpace property appreciation by a considerable margin over the few years till you reach FI, or is it because you need to be flexible in terms of moving around for your current job, and will only settle down in one spot once you quit?
Hi TFS. Naturally I have a detailed spreadsheet for this! What works for me may not work for everyone. I earn Smokey London money but I don’t pay London rent, I house-sit. Jammy I know. I don’t want to buy here for a host of reasons… dramatic drop in quality of life, enormous debt, huge interest payments, fees, maintenance etc etc. I’m debt free and flexible this way. My target buy area is Norfolk, back to family. Yes, you assumed right, my savings and investments will outpace property there. I’ve optimistically added a % of House Price Increases into my calculations and allowed for interest rates to stay rock bottom. If interest rates rise any time in the next 9 years, prices drop, my investment returns increase, so with a good headwind I could be FI faster. It’s a different approach I know, I need a crystal ball to know if it will really pay off, but so far so good.
Thanks for the more in depth explanation. That sounds like a genius plan if you don’t mind me saying! Nice situation with the house sitting. Hah, it’s funny isn’t it, everyone who owns property would no doubt like rates to stay rock bottom, while everyone trying to get onto the ladder would probably benefit from them rising (although this is not that obvious to most, at first glance!)
We went up Norfolk way last year with the family and really liked it up there, lot’s of green scenery, rivers, and fun things to do.
I’m a big fan of the “cashback” advisers, but its important to check that they are looking at the whole market instead of just one or two providers which offer them the best commissions.
I find the best way is to go in with a list of potential mortgages that you have found yourself online and then discuss why they may be appropriate. Look out for signs that they are dismissing any without good reason and overly pushing his own suggestions, and this may suggest that they are in it to maximise their commissions.
Number 7 is probably the most important to remember from an emotional standpoint. Do not relax or become complacent until you are officially complete, until the keys are in your hand and you are nicely settled in your new home! Its crazy the number of deals that can fall through at the very last moments.
Hi Moneystepper, thanks for chipping in with a comment!
MBM cover 90% of the market: http://www.moneybackmortgages.com/faqs.php
While not full market coverage, I think that is good enough, and our friendly advisor came up with mortgage options from companies that were not even showing up on some of the comparison sites (see point #2!!!) so I think you are much safer going with them than relying on comparison sites and your own research (barring checking every single site separately, which I am assuming most people do not have the time nor inclination to attempt!).
We spoke to a paid for advisor at our estate agents as well and I don’t think he was 100% market coverage either, so I think that is hard to come by (or maybe even impossible?!)
Cheers again! 🙂
Any readers in the Police can try Linder Myers solicitors out. Federation-recommended, they cost us about £500 including searches.
Cheers for the tip Edmund, nice one!
Thank you for sharing your experience! This are really helpful tips for future house buyers! 🙂
Nice tip about not spending anything on credit cards while you are trying to purchase a home. Best not to take on additional debt on cards.
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