Your home buying questions answered
For some, buying a home can be pretty confusing.
There are countless things to consider, as well as lots of new jargon to wrap your head around…sometimes it can be difficult to know where to begin!
In the hopes of making things a little easier, we’ve rounded up some of our most frequently asked questions to give you a helping hand.
How much can I afford to spend on a home?
In theory, you can afford a property costing no more than the combined total of the deposit that you saved (or can save) plus the amount you can borrow on mortgage.
Typically, this is three times the principal income plus one times the second income. But keep in mind some lenders will lend more, and some less.
How much money is required as a reservation fee?
Here at Miller, we usually require £250 as a reservation fee for properties up to £150,000 and £500 as a reservation fee for properties priced between £150,000 and £500,000. We ask for a £1,000 reservation fee for properties over £500,000.
Is my reservation fee refundable?
Should you wish to cancel your reservation, like many homebuilders, Miller Homes will retain a proportion of the reservation fee to cover reasonable costs and expenses, and the remaining balance will be returned to you. This fee is payable at any point after the day of reservation.
How much of a deposit will I have to pay?
You will be expected to pay a deposit when you exchange contracts on the property (usually 14 days after reservation in Scotland and 28 days after reservation in England). The deposit will vary; it is usually between £1,000 and £2,000 in Scotland and approximately 10% of the property value in England.
Do you offer Part Exchange?
Yes, we offer part exchange on selected plots and developments. However, you’ll need to speak to one of our sales teams to see if the plot you are interested in is included in the Part Exchange scheme and your property qualifies.
What is a valuation survey?
Prior to making a mortgage offer your lender will have the property valued for mortgage purposes. A small fee will normally be payable for this service.
Remember, the value the lender puts on the property is a valuation for loan purposes and may not reflect the open market value of the house. If you order a lot of optional extras for your new home the full value of these may not be reflected in the value the lender puts on the property.
What is Stamp Duty?
Stamp Duty Land Tax (SDLT) is payable on all homes with a purchase price of over £125,000. The amount you will have to pay will be based upon the selling price of your home.
If you are a first time buyer in England, you don't pay any Stamp Duty Land Tax up to £300,000 and 5% on the portion from £301,000 to £500,000
The Government has recently announced a Stamp Duty “Holiday” eligible until 31st March 2021. For further information as to what this means when purchasing a new home, please click here
Land and Buildings Transactions Tax (LBTT) was introduced on 1 April 2015 in Scotland, and replaces UK Stamp Duty Land Tax. LBTT is charged at the appropriate rate on the amount of the chargeable consideration within the relevant bands.
For more information on SDLT and LBTT, please visit our website.
When does the sale of the house become legally binding?
In England, your solicitor will arrange for you to sign a binding purchase contract. At this time your agreed deposit will need to be paid. Miller Homes will also sign their copy of the contract and send it to their solicitors.
Once these contracts are exchanged the transaction becomes legally binding. In Scotland, your solicitor will enter into legally binding missives on your behalf.
If you are selling your present home, the timing of the exchange of contracts is finely worked out. It is up to your solicitor to ensure that both sets of contracts - the sale of your existing home and the purchase of your new one - are exchanged simultaneously and a suitable moving day arranged so at no time are you 'homeless'.
Sometimes it is not possible to co-ordinate the sale of your existing property and the completion on your new Miller Home for the same day. If this is the case you may have to consider staying with friends or family or living in rented accommodation until your new Miller Home is ready.
We hope this has been useful in helping to answer some our most asked questions.
If there is anything you still wish to ask that we haven’t covered in this post, please feel free to take a look at the FAQ section on our website or, give one of our team members a call. For more information on our current offers and incentives, please visit our website.