If you are a first time buyer, you may be feeling a bit daunted, to say the least by the thought of going through the whole home-buying process, which is complex, lengthy and time consuming. If you haven’t got a clue how this whole thing works, here is the guide you need, which takes you step-by-step through the home-buying procedure, and contains advice on things to consider that you may not even have thought of. So, without further ado, let’s get to it…
STEP 1 – Save for a Mortgage Deposit (and the rest)
Obviously this is a no-brainer – you need to have a substantial amount of money saved for a deposit on your new home. The good news is that at present, the government are encouraging lenders to offer 95% mortgages on homes with a value of up to £600,000. So that means that, if you were purchasing a property for £300,000, you would only need to put down £15,000 and borrow the remaining £285,000. But it is always better to put down as large a deposit as possible, as this reduces the interest rate that you will pay.
You will need to know how much money you are able to borrow. This will depend upon your earnings – or joint earnings if you are purchasing with your partner and your credit score. You can get an idea by using one of the many online mortgage calculators.
Don’t forget the other expenses you will incur when purchasing a home – for example, conveyancing surveys, and stamp duty (which is calculated according to the price of the property).
STEP 2 – Get to Know Your Chosen Area
You will probably have some idea of where you want to live – if you are moving to a completely different area, or even just down the road for that matter, you will want to know everything there is to know about where you will be living and then make an informed decision. School catchment areas will push up the price of properties, as will being close to a train station and other good transport links. You will want to visit the area and get a feel for what the atmosphere’s like, and the sort of characters that are walking around. Definitely research the crime rate in that area, which you can do online by visiting police.uk. Are there any development plans, for example for a new shopping centre or block of flats?
STEP 3 – Apply for a Mortgage Agreement in Principle
This is not compulsory but is a very good idea, as it gives sellers confidence that you will be able to buy their property without issues, as it shows that the mortgage lender has agreed “in principle” to lend you the money.
STEP 4 – Register with Estate Agents in your Chosen Area
This is a really good idea, as it means that you will be contacted should an ideal property becomes available, and before it goes online, so you will get a heads-up. Register with several different estate agents – you will not be under any obligation.
STEP 5 – Go to View Properties in Person
It’s all well and good looking at properties online at all the fancy pictures taken by estate agents and think that the property is ideal – but you must view the property in person, and preferably more than once, at different times of the day. This is the only way to get a proper feel for it, to see if you can imagine you and your family living there, and to discover if there are any issues you’re not happy with. You will also get an idea of what, if any, improvements you would like to make in the future.
STEP 6 – Make an Offer!
This is the exciting part – you’ve found your perfect dream home, and now is the time to make an offer to the buyer. It is normal to make an offer which is below the asking price, however, if there are other buyers interested in the property, you will need to make one which is higher. The offer is made by telling the estate agent, but you can also put it in writing. Being a chain-free, first-time buyer will stand in your favour, and saying that your offer is subject to a survey and the property being taken off the market will reduce the chance of being “gazumped” (another buyer coming in with a higher offer and thus winning the property).
STEP 7 – Apply for a Mortgage
Once your offer has been accepted, now you can actually apply for a mortgage. The usual term is 25 years, and you can choose between fixed-rate or tracker.
STEP 8 – Find a Conveyancer
Conveyancing is the legal process that takes place once an offer is accepted, and it involves carrying out searches, drawing up and checking contracts, dealing with the Land Registry and paying stamp duty.
STEP 9 – Get a Property Survey
Again, not compulsory, but is highly recommended – you want to make sure that your new home is structurally sound and safe. Not to be confused with a valuation survey.
STEP 10 – Find a Removal Company
If you only have a small amount of furniture and reckon you can do it yourself, you can just hire a van. However, it is more than likely that you will need the help of a professional removal company. Get a few quotes from different ones as their prices can vary wildly.
STEP 11 – Arrange Home Insurance
This is vitally important and needs to be in place from the day you exchange contracts.
STEP 12 – Exchange Contracts
This is where yours and the seller’s legal representatives swap signed contracts, and you pay the deposit. Before this happens, several things need to be in place – a written mortgage offer, an agreed completion date and buildings insurance from the day of exchange. Once this process is complete, congratulations, the home is yours and nothing else could possibly go wrong! Your conveyancer will lodge an interest in the property, which will allow you to pay the seller, and apply to the Land Registry to transfer the deeds to your name.
STEP 13 – Complete – Now it’s Time to Move in!
“Completion” usually happens approximately two weeks after exchange, however, this is flexible and negotiable with the seller. Completion means that the money is transferred to the seller, and you can collect the keys from the estate agent and finally move into your new home, sit down with a nice cup of tea and congratulate yourself on a job well done, before unpacking all those boxes.