What is involved in buying a house?
Buying a home can be a stressful time so we have provided an overview of the steps you can expect to take to try and help you through this process:
- Decide on a monthly budget that you can comfortably afford. This should be sufficient, not just for the mortgage but for the insurances, utility bills and general living costs. You may find it useful to use the budget planner in the “Can I afford it?” section.
- Establish how much deposit you have available. Some lenders will offer lower interest rates if you have a bigger deposit but make sure you have enough to cover the associated costs (these are also covered in the “Can I afford it?” section).
- Find out how much you can borrow. This will vary from lender to lender depending on your financial circumstances. Be careful not to exceed your budget even when a lender will provide you with a larger mortgage than you anticipated.
- Find a property. You can try estate agents, newspapers, the internet or building companies if you are looking for a new property. Remember to be as objective as possible. It can be easy to fall in love with a property but how much do you need to spend to get it just the way you want it? It may be useful to take someone else along with you to give you their honest opinion.
- Make an offer. Once you have found the property you want, it’s time to make an offer. You don’t necessarily have to pay the price being asked by the vendors. If this offer isn’t accepted you may decide to make an increased offer. Even when an offer is accepted this is not legally binding so either party can pull out of the transaction until much later in the process when contracts are exchanged.
- Once your offer is accepted you need to start arranging your mortgage and choosing your solicitor. Many estate agents will require and Agreement in Principle at this stage. This is basically written confirmation from a mortgage lender that you have passed their initial credit assessment and affordability (this doesn’t constitute a Mortgage Offer though).
- Once the Agreement in Principle has been obtained with the most appropriate lender, the full application is placed. All lenders have their own criteria but many will require items such as identification, proof of address and proof of income.
- The lender will normally instruct a basic valuation of the property but you can request more detailed surveys to be completed. You can choose between a Homebuyers Report and a Structural Survey (please contact us if you require more details of the differences between these options).
- Once the lender has assessed your application in full and is satisfied with the documentation forwarded to them and the valuation is acceptable they will issue a Mortgage Offer. This is confirmation that they are happy to proceed.
- Arrange your insurances. There are a number of different options available to you depending on your requirements, although lenders will require that buildings insurance is in place.
- Once the solicitor has completed their conveyancing (legal work) you will be ready to exchange contracts and set a completion date. Once contracts have been exchanged you are legally bound to complete the purchase. The solicitors will normally request the remainder of their fees around this time as well as the deposit.
- On the day of completion, once the funds have been transferred you can finally get the keys to your new home!
This is a general overview of the home buying process and some aspects may vary depending on your situation. If you are in doubt or have any more detailed queries regarding the process just drop us an email or give us a quick call and we will endeavour to resolve these queries for you.