Buying a home can be a very stressful experience and for many, especially first time buyers, the process can be confusing and a lack of knowledge and experience can cause delays. Here’s a handy guide outlining the full process to ensure that you’re always one step ahead:
- How much can you borrow? Make an initial appointment with a mortgage broker or your bank and have an initial assessment done which will tell you how much money the bank will grant you for your mortgage (an agreement in principle). This doesn’t mean that you have to go with this bank, but it will give you a budget to aim for and is the most important aspect before you begin your property search.
- Define your criteria: Discuss your requirements and preferred location bearing in mind your budget and future aspirations. Research the local property market in that area and start viewing properties – even if they aren’t your ideal home, they will give you a good idea of what your money will buy you and what you may need to compromise on.
- Make an offer: Once you find a home you love and can see yourself living in, make an offer. It’s worth remembering that in the UK that you can offer on as many properties as you like, but it is important that both your estate agent and the property sellers know you are serious buyers. A mortgage agreement in principle along with proof of your deposit are a great way of demonstrating this when you are submitting your offer.
- Offer Accepted: Congratulations – the sellers want you to buy their home and you are now one step closer to owning the home of your dreams! The hard work really starts here however as the first four days after an offer is accepted are the most important for any property purchase.
- Instruct a solicitor: The first thing to organise is who you want acting on your behalf in this sale. Appoint a local solicitor to you if possible and remember that very often, you get what you pay for. Ask your agent or friends for their recommendations and once you’ve found someone, get the instruction forms completed as soon as possible so that they can get started and can start liaising with the sellers solicitors.
- Apply for a mortgage: Get your financial documentation in order and apply for that mortgage. Speak to your bank or mortgage broker – remember that if you approach your bank directly that they often won’t have access to all of the best rates on the market, however a mortgage broker will often charge a fee for their services. With the new Mortgage Market Review (MMR) rules now in place, the application can be a lengthy process and the amount of information the banks will request is very comprehensive so make sure you listen carefully to exactly what is needed. Missing documents only create longer delays in your application.
- Searches and surveys: Next, you’ll need to make payment to your solicitors so that they can get the property searches such as the water and drainage and environmental surveys carried out and once the bank has processed your mortgage application they will also want to send out a surveyor for the mortgage valuation which tells them if the property is worth the amount being borrowed. It’s important to remember that this valuation won’t tell you if there are any defects or issues with the property so if you are concerned at all, or if you are buying an older home, it is also worth arranging your own independent survey. Issues such as damp, wood rot, Japanese knotweed and subsidence can all be found in older homes, and while they are concerning, very often can be treated or resolved so try not to panic.
- Exchange of contracts: Once you and your solicitor are absolutely happy with the purchase of this property and all issues have been ironed out, your solicitor will arrange for the exchange of contracts. This is the point at which the sale of the property is legally binding and when the deposit monies need to be paid. After this point, either party pulling out will lose their deposit funds. It is at this stage that you should both agree a completion date and your solicitor will also ask that you have buildings insurance in place for the property you are purchasing. You can now book your removal van and start to coordinate the smaller aspects of your move.
- Completion: You officially own the property – hooray! To get to this point, your solicitor will need to request funds from your bank (often 5 to 7 days in advance to allow them sufficient time to process this payment) and once received, will arrange the transfer into the sellers solicitors account. You can exchange and complete on the same day if funds are requested in advance if timescales are tight but everyone should be aware of this well in advance. Your mortgage will start today and you can collect the keys from your agent as soon as the sellers solicitors confirm receipt of all funds.