The process of buying your first home
If you are planning and saving to buy your first home it is important to understand the process you will have to go through to purchase your property. Here we go through the key steps on the journey:
1. Work out how much you can afford
The absolute first thing you should do before making any decisions is to assess how much you can afford. Work out how much money you have available and how much you can borrow from a mortgage lender to calculate how much you have to spend on a property. It may be tempting to borrow as much as you can to buy the biggest/best property you can stretch to but you should consider your other monthly financial commitments before committing to a larger mortgage.
2. Looking for properties
Once you have worked out your price range you can start looking for properties. You probably already have a good idea of where you would like to live and how many bedrooms you need but it is sensible to have a checklist of other things you require from a property such as parking, size of garden, bathrooms etc. It is also worth including the local amenities in this checklist, do you need good transport links or do you need to be close to good schools? Having these requirements clear in your mind will allow you to compare properties rationally and easily identify those properties that meet your requirements.
3. Make an offer
Once you have decided on the property you want to buy you will need to instruct your estate agent to make an offer based on what you think the property is worth. All offers are subject to surveys and valuations so you aren’t committed to buy at this point. The seller will consider your offer and either accept or decline it.
4. Arrange a mortgage
You may have already started the mortgage process by getting a “mortgage in principal” before even making an offer in which case you just need to go back to your mortgage lender to continue the process. If you haven’t found a mortgage provider yet this is the time when you need to start looking as it can take around 3 weeks for a mortgage to be approved (timings vary from lender to lender).
The lender will then want the property to be valued to ensure they will get their money back if you can’t keep up with the repayments and they have to repossess and resell the property. Unfortunately you do have to pay for this valuation (see our Hidden costs of buying a home) but it is a necessity of buying a home. You may also decide to pay for a survey on the property (different to a valuation), the survey examines the structural qualities of the property and will highlight any areas that may need investment in the future.
5. Getting a formal mortgage offer
If your lender feels confident that you will be able to pay back your loan and they are satisfied that the house is worth what you want to pay for it then they will offer you a formal mortgage or an “offer of advance”. If you still want to buy the property you must accept your “offer of advance” and commence legal proceedings.
6.Instruct your legal advisors/’ Conveyancing’
Buying a house involves complicated legal aspects and although you can do the work yourself it is probably more beneficial to employ a solicitor or conveyancer who will act as your legal advisor. They will draft your contract, contact the seller’s conveyance and oversee the exchange of contracts/house sale.
7. Completion
Your agreed date (or completion) date is the date you become the legal owner of the property. The conveyancer will check funds have been received by the seller before releasing the keys. Then you are ready to move!
