Buying a property in Scotland isn’t like it is in England or Wales. Scottish mortgages and the house buying process may seem strange to those from South of the border but really, it works just fine.
The basics of buying & selling a property aren’t actually too much different, the main difference is the timing of the point at which the contract becomes legally binding which is usually much earlier in Scotland than in England where exchange of contracts is almost the last stage before the removal men turn up!
Anyone buying property in Scotland needs to take the following steps, to make the process go as smoothly as possible:
Before you make an offer
You might have perused the property websites, visited the odd estate agency or even viewed your ideal property, but there’s little point in falling for your dream home if you’ve not already secured a mortgage in principal.
Before you can bid on a Scottish property, you really need to have confirmation from a mortgage lender of the amount that they are willing to lend you as once the offer has been accepted, you’ve entered into a legally binding arrangement and neither party can withdraw without the possibility of being held liable for the consequent losses of the other party.
See a mortgage broker before you start your property search in earnest. Traditionally, mortgage brokers, particularly in remote parts of Scotland were not always exclusively so. Many ran other businesses, such as the local Post Office or similar. Increased compliance requirements over the years has seen these types of mortgage brokers disappear, making it difficult for buyers to search for the most appropriate deals for their circumstances.
Here at Martland Mortgages, we’ve decades of experience with mortgages in both Scotland & England and we’ll hold your hand throughout the whole process. We understand how the market works and which lenders are best placed to provide mortgage funds for Scottish property purchases.
A qualified mortgage broker will have the contacts and access to lenders that will get you the best deal on your mortgage. It might be tempting to see the mortgage advisor at your bank, but bear in mind that they’re tied to the bank’s own range mortgage products.
Once you’ve agreed your mortgage in principal, you then need to find a Solicitor. You’ll need to instuct a Solicitor before you can even put in an offer on a Scottish property and unlike England where you’ll sign – and then exchange – contracts, in Scotland the Contract is formed by a series of letters known as missives between the two Solicitors.
Securing your dream home in Scotland
Looking towards Bidean nam Bian
Properties in Scotland are either placed on the market at a fixed price or more usually offers over. When you’ve found the home that you want to buy, you then need to register a ‘note of interest’ via your solicitor, with the seller’s agent.
Before a Scottish property is put on the market, the seller has to arrange a ‘home report’ consisting of survey, Energy Performance Certificate and also general information on the property such as council tax band, parking restrictions and any previous home improvements made.
Following the mortgage in principal, your mortgage lender will then arrange a mortgage valuation on the property, to ensure that it’s worth what they are willing to lend you to purchase it.
Once you have the mortgage in principal, survey results and mortgage valuation, you can then make an offer.
The offer process
Whether the property is fixed price or offers over, the amount you offer needs to be based on the survey, how much you can afford and ultimately how much you want the property. A prime property in a good location could attract offers significantly over the asking price, 20% over is not unusual but of course, every property & buyer is unique so base your offer on what the property is worth to you and don’t get carried away!
It’s also not unknown for offers to be less than the suggested price but this is rare and you need to assess the competition for the property. The seller will accept offers until a determined date and time that should be shown in the agent’s details.
Your offer is made via your solicitor formally, by letter. On the closing date, the seller’s solicitor will open all offers and will contact your solicitor if you’re the successful bidder. Once your offer is accepted, the property is yours – subject to contract.
Getting the keys
Through both parties solicitors, contract details are agreed. The solicitors then exchange ‘conclusion of missives’ – legally-binding letters committing both seller and buyer to the sale.
Tranquil shores of Loch Garten near Aviemore.
You may then need to pay a holding deposit. Your solicitor will contact your mortgage lender with the date that the purchase is going ahead and also when you will be moving into the property – the date of entry.
Your mortgage lender will release the funds to your solicitor on the agreed purchase date, you will have already forwarded your deposit monies to your solicitor. Then, subject to everything going smoothly on the day, the property is yours!
Buying a Scottish property and arranging a Scottish mortgage needn’t be over-complicated. Take the right advice and your home-owning dream will become a reality.
You may be required to pay a broking fee. The fee will depend on your circumstances, an indication is 2.5% of the loan subject to a minimum of £2800.
The overall cost for comparison is 4.6% APR but the actual rate available will depend upon your circumstances. Please ask for a personalised illustration.
Think carefully about securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage.