First Time Buyer?
Let's take a look together at the seven steps of the house buying process!
1 - When it's time for your own place.
The first thing you'll be thinking about is when is the right time for you to buy your very first home? This is different for everyone, but it mainly comes down to when you have a sufficient deposit. There are 'no deposit' mortgages available and many different options of where your deposit can come from.
Once you know you would like your own home, it is important to book in your first appointment with your mortgage broker where we will discuss your immediate and longer term goals and plans, look at the different buying schemes (there's quite a few out there for First Time Buyers) as this could open up options you never knew about. We will also look at your credit history, income and outgoings to determine what you feel comfortable paying each month on your mortgage and insurance payments.
Don't forget you will need extra funds to cover things like fees, surveys, moving costs, furnishings etc on top of your deposit. This is something we will discuss with you.
At the end of the first meeting you will understand the different types of properties and buying schemes available to you, the monthly payments that are realistic for you, what deposit/savings you need and where that deposit is going to come from.
2 - How much can I borrow?
To work out how much you can borrow we will look closely at your income, any future wage rises, bonus, commission, overtime, 2nd job income, benefits - basically any income you receive will be assessed to see if it can be used to support your application. Some lenders can use your income from a new job that you haven't yet started. This can be particularly helpful if your income is increasing as it can increase your borrowing capacity. Where needed we can also look at friends and family income to help support your mortgage.
Once all your income has been verified, we will look at your outgoings - things to consider are student loans, pension contributions, car loans, personal loans, credit cards, buy now pay later credit, child maintenance etc. Some lenders may discount a credit commitment if it will be repaid prior to your mortgage completing, which could increase your borrowing capacity.
Your current age, plans/goals for the future, retirement age and your agreed budget will all be taken into consideration to allow us to search the market for the most suitable lender for you.
Once this research is done we can then let you know how much you can borrow and have your mortgage approved in principle!
Things are now starting to get exciting! You know what you can afford, how much you can borrow, what and how your deposit is made up, cost of the fees, the different types of buying schemes available to you and your mortgage approved in principle.
- Did you know the amount each lender will lend varies from lender to lender. Lender X may lend you £80,000 whereas lender Y may lend you £140,000, all based on the same information provided to them.
3 - Let's start looking for your new home!
Now you know what types of properties you could buy, the buying schemes available, the deposit you need, how much you can borrow and how much you can afford each month for your repayments it's time for what we think is the most exciting part…viewing properties!
It's always advisable to visit a property a couple of times as you may see things you didn't initially notice. You could take a friend/family member too, as it's always a good idea to have another pair of eyes to look over everything with you.
You may find the perfect home straight away or it may take months. Don't be disheartened if it does take a little longer than you anticipated. This is likely the biggest purchase you will ever make so do take your time!
- Don't forget to set up alerts and get on estate agents mailing lists so you are kept informed on any new properties coming to the market.
- Did you know we can come with you to a house viewing if you wish?
4 - It's time to get the sale agreed.
The next step of your home buying journey is to agree on a price on your new home. We are often asked whether to offer less than the asking price, the asking price or to go a bit higher. This is a difficult one as it depends on many different things such as:
- How long has the property been for sale.
- How quickly do the sellers need to move.
- Whether the sellers are open to offers.
- Supply & demand.
Have a look at similar properties in the area that have sold recently as this could give you an indication on an average price for the type of property, area etc.
Once you have done your research you can put forward the price you wish to pay for the property. You would contact the selling agent who will put forward your offer to the seller. Don't be disheartened if your first offer isn't accepted. You can always negotiate further.
Once you see your new home marked as sold you know things are starting to get real! For further information on putting an offer forward on a property don't hesitate to get in touch where we can help you further.
5 - It's time to get the house valued.
Now you've had your offer accepted on your new home it's time to progress your mortgage application. As part of the application the underwriter will review your credit file, income and bank statements. They will also want to value your new home to make sure it's worth what you are buying it for and it's a suitable property for the lender.
The valuation is for the lenders purposes and a valuer may not even visit the property, therefore it is advisable to have your own survey carried out.
There are 3 types of survey;
- Level 1 - Basic valuation.
- Level 2 - Homebuyers report.
- Level 3 - Building survey.
Prior to submitting your mortgage application we will discuss in detail what each report offers. Once the lender is happy with your application and valuation they will issue your mortgage offer! Your mortgage offer is your official paperwork from the lender confirming they are happy to lend to you.
6 - Let's instruct the conveyancer!
Now your mortgage offer has been issued it is time for your conveyancer to be instructed.
- Choose your conveyancer wisely!
Just as you should choose your mortgage adviser wisely it's really important to do your research and pick a good reputable conveyancer to act for you.
Your conveyancer is responsible for checking the boundaries of your new home, liaising with the sellers conveyancer as to what will be left/taken in your new home, asking questions in relation to the property/title deeds and carrying out searches of your new home. These may include a coal mining search, water and drainage search, environmental search, flood search and a local search.
Once your conveyancer is happy with everything, you will set a date to exchange contracts and complete on your new home.
Once you exchange contracts you are legally bound to buy the property and the seller is legally bound to sell the property. Failure to do so could result in a financial penalty.
7 - Your mortgage has now completed!
Congratulations, your mortgage has now completed!
On the day of completion, you will receive a call to let you know everything has gone through and you can go pick up the keys to your new home, this is usually around 2pm but could be slightly earlier or later. You will often complete on a Friday, however other days can be requested.
You've finished the seven steps to buying your new home!
We hope you've found this useful? We know buying your first house can be a daunting prospect but we're here for you every step of the way!
Here's a quick recap of the 7 steps in buying your first home;
- Book in for your first appointment.
- Find out how much you can borrow and have your mortgage approved in principle.
- Look for your new home.
- Agree a price for your new home.
- Submit your application and carry out your valuation.
- Mortgage offer issued. Instruct your conveyancer.
- Put insurances in place, exchange contracts and pick up your keys to your new home!.
If you are looking for help with your home buying journey please reach out to us, we'd love to help! You can email us, call uschat with us below or fill in the form on the right - either way, we'll get back to you as soon as can!
We can't wait to work with you!