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What to ask when buying a house

Young couple in a house surrounded by moving boxesHSBC Bank polled 100 estate agents to find out what questions house buyers should ask first.

Its findings show that many buyers are displaying their inexperience by failing to ask basic questions.

Some questions almost go without saying - the location of the property, local amenities, schools, garden size, condition of nearby properties and public transport.

Indeed you could well have researched much of this before even visiting the property.

But HSBC says that many buyers are showing their inexperience by "ignoring the practicalities of owning a home".

Maintenance matters

Half of estate agents put "Is the property well maintained?" at the top of the list of questions for which prospective buyers should seek answers.

Major structural flaws, damp and signs of subsidence should show up in the surveyor's report but you might want to find out early about these as well.

After the surveyor has been you should be able to estimate the cost of getting the house up to a decent standard, and you could use any such revelations to negotiate downwards on price.

Next on HSBC's list of top questions estate agents would ask is whether there is documentation for property alterations.

There should be, and you should be concerned if there is not.

Check inside and out

Perhaps the alterations did not receive planning permission or were not safely carried out.

Agents also recommended you find out if the local community is friendly, which is not easy to do merely by looking around.

Estate agents also suggested prospective buyers look at the condition of the boiler and central heating system, the cost of updating the property and plans for local development.

Peter Dockar, head of mortgages at HSBC, said of first-time buyers: "While in the excitement of searching for their first property they may not like to think about the required maintenance or the condition of items such as the boiler.

"These will be a concern if it is something that they have to pay to fix at a later date."

Commonly misunderstood property terms

Building society Nationwide revealed how many homebuyers don't understand important jargon.

Just 31 per cent know what the term "loan-to-value" (LTV) means.

Loan-to-value or LTV

Put simply, if the property is worth £100,000 and you have a deposit of £20,000 then you must borrow £80,000.

The size of the loan size compared to the value of the property is therefore 80 per cent loan-to-value.

To calculate the LTV yourself, take the amount you want to borrow and divide this by the value of the property, multiply this by 100 and you have the LTV.

Negative equity

Negative equity was another commonly misunderstood term. Equity is the amount of the property that you own outright.

When you buy a £100,000 property and put down a deposit for £20,000, you have £20,000 of equity in the property.

If the price goes up or you pay down your mortgage then your equity increases.

If the property price crashes to £70,000 while your outstanding mortgage is still around £80,000, you are now in negative equity - your debt is higher than the property would currently sell for.

If you are in negative equity it can be very difficult to get a new mortgage deal when the time comes, and also hard to move home.

Martyn Dyson, Nationwide's head of mortgages, said: "People shouldn't be afraid to ask a lender or an independent mortgage broker to explain terminology that they don't understand."

Go from mortgage newbie to know-it-all in 10 easy steps with's guide to buying your first home.

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Neil Faulkner

Neil Faulkner

Neil Faulkner waded his way through a mountain of claims as a paralegal before moving on to be an insurance consultant and claims manager. He is a long-term investor, and one-time property owner and landlord. He writes about property, investing, insurance, consumer issues, and helping people get out of debt misery.

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