If this is the first time you are buying a property, it can be a daunting process, involving a lot of paperwork, procedures and different people. Our simple guide to becoming a home owner in England, Wales or Northern Ireland, will help you understand the process before you start and hopefully make it less stressful.
Before you start
Buying a house is a big investment and unless you have big savings, you will need to get a mortgage, ie. a loan for buying a property. This will be secured against the property, which means if at any point you cannot meet the repayments, the mortgage lender could repossess and sell it to get their money back.
It is important to think about whether you can afford the monthly repayments and to factor in all of your other monthly outgoings and be sure that you could still meet your payments if interest rates rise or your circumstances change.
Finding a mortgage
When it comes to finding a mortgage there are several options: mortgage brokers, individual banks or searching online. Searching online first, will gives you an idea of what is available. An independent mortgage broker can then provide a more in-depth search and guide you through the process. It may also be worth speaking to your bank, as sometimes they will be able to provide special deals for an existing customer. Once you have found the best mortgage for you, the lender will give you an agreement in principle.
Making an offer
Once you have found the property that you would like to buy, you will need to make an offer, which will usually be done through the estate agent. You can do this without already having an agreement in principle in place, but having one, means the offer is more likely to be accepted. If the seller agrees to the offer then the buying process can go ahead.
You will not be obliged to go through with the deal if there is a problem with the survey or contract.
Find a solicitor
You will need to find a solicitor or conveyancer to take care of all the legal aspects of the sale. They will also check for any planning or local issues that may affect the property’s value.
Arrange a survey
A survey assesses the property for any potential problems. Your mortgage lender will require a valuation to check that the property is worth the asking price.
There are three types of survey:
- Condition report. This is the cheapest and most basic survey and tends to be used on conventional homes or new builds. It doesn’t include a valuation or investigate possible future repairs.
- Homebuyer report. This is more expensive and thorough and examines both the inside and outside of the property and includes additional valuation.
- Building or structural survey. This is the most comprehensive option and is more suited to older or unusual properties like converted barns.
If the survey finds any issues, the surveyor will usually give you an idea of how much they would cost to fix. You can then decide whether to renegotiate the price with the seller or pull out of the deal altogether.
Exchange of contracts
If your solicitor/conveyancer and surveyor are happy, now is the time to sign the contract and exchange with the seller. At this stage, you will have to pay a deposit; usually 10% of the total price. Once this happens, both you and the seller are committed to the sale. If you pull out of the deal after exchange, you are likely to lose your deposit.
This is where the property actually becomes yours. You get the keys and the deeds and there will be some bills to pay:
- The remaining cost of the property (usually 90%), which will be transferred from your mortgage lender to your legal representative and then to the seller’s representative.
- Your solicitor or conveyancer’s fees.
- Stamp duty (a government tax). The payments for this will be arranged by your solicitor or conveyancer.
- Any removal costs
Congratulations, you now own your first home!