Buying a home, particularly for the first time can be daunting. The decisions you make along the way could save you time and money. Here’s our step by step guide to buying a home.
Decide on your budget
- How much do you want to spend? This might be dependent on how much of a deposit you can get together along with your annual income.
- Don’t forget the variety of one-off and ongoing costs of buying a home.
Get your finances in place
- First, work out how much of a deposit for the mortgage you can get together. Think about savings. If you have any savings on long term deposit that you plan to use, cash them in.
- Speak to a mortgage provider, decide what sort of mortgage you want and get an indication of how much you can borrow for your purchase. While you can’t get a mortgage before you buy, you can get a mortgage in principle, which will put you in a stronger position.
Choose a specific property
- Once you know the area you want to live, you should start researching the properties in that area thoroughly so you really get to know the local market well
- You need to visit as many properties as possible to get a good feel of what properties are out there.
Make an offer – and get it accepted
- Make sure you are in the strongest possible position as a buyer.
- Decide how much you want to pay, including for fixtures and fittings.
- Make the offer to the estate agent in writing, and seal the deal.
- Hopefully your offer will be accepted by the seller
Arrange a mortgage
- You should ideally have got your finances in place as much as possible before making an offer. If so, you now just need to go back to your mortgage company with the agreed offer and complete the process
You will need to get the lender to make you a formal mortgage offer before you can exchange contracts
Hire a solicitor or conveyancer
- Once you have agreed an offer on your house, you need to get a solicitor or conveyancer to handle the legal work to transfer ownership of the property to you. Choosing the right solicitor is critical.
- Your mortgage company might require you to go with one that is on their panel, which might make the decision for you.
- The solicitor or conveyancer will do the searches, such as with the local authority and Environment Agency, to ensure there are not any major problems with the property.
- Your mortgage lender will require a valuation by a surveyor, to ensure that the property is a good enough to lend against. This is not a proper survey, and will only look very superficially at the property,
Arrange a deposit
- Before you can exchange contracts, you need to arrange a deposit of 10% approximately of the sale price of the property, and give it to your solicitor or conveyancer. Your solicitor will advise you when to arrange this to be sent to them.
- When you exchange contracts with the seller you become legally committed to buying the property – and they are legally committed to selling it do you
- You should only exchange contracts after you have received the surveyors report, formal mortgage offer and any necessary action has been taken. Your solicitor will advise when you are in a position to exchange contracts.
- Before you exchange contracts, you need to agree a completion date with the seller; both parties will mutually agree a date via the solicitors.
- You can only exchange contracts after the solicitor/conveyancer is satisfied with the searches, a formal mortgage offer has been received, and arrangements made for the deposit amount.
- You need to ensure that you take out buildings insurance for the property from the date of exchange, as you are responsible for it from then on. Indeed, it is usually a condition of the mortgage that you have buildings insurance in place.
- The solicitor/conveyancer will inform the land registry that they are in the process of transferring ownership of your property
- Your solicitor/conveyancer should be liaising with the mortgage company to ensure the money will be ready for completion. You need to ensure that your deposit is also ready, and normally you will pay that to your conveyancer before completion
Complete the sale
- Completion is when you pay for the property and take ownership of it, and takes place at a certain time of day – often midday
- On the day of completion, the money is transferred and the deeds of the property are transferred, between each side’s conveyancer
Take possession of your new home
- The seller has to leave the property by the time of completion, and you should then be able to collect the keys, normally from the estate agent
- You are now free to move in, or if you are doing any building work before hand, the workmen can now start
Pay stamp duty and settle up with the solicitor and conveyancer
- After completion, your solicitor or conveyancer will send you an account, covering all their costs and disbursements, as well as the purchase price of the house and stamp duty.
- Your solicitor or conveyancer will normally pay the stamp duty for you, and ensure that the change of ownership is registered with the land registry