How to Buy A Home?
Buying a home is a huge financial commitment for anyone whether you are a first-time buyer, starting a family, down-sizer, or an investor. Buying a new property can be a complex and lengthy process. This guide is to help you through the basic steps to purchasing a new property and hopefully help you through the purchase of your property.
Save Up For A Deposit
First, you will need to build up a deposit of at least 5% of the price of the property you want to buy. The more you can save and put towards a bigger deposit means you can apply for mortgage deals with lower interest rates.
Find Out How Much You Can Borrow
Before you start searching for your future home, it is good to know how much you can borrow. You can find this out by going through a mortgage advisor who will go through your finances such as your deposit, your income, and credit score. If you are applying with other people, they will consider their finances as well.
Remember you will also have to account of additional costs such as conveyancing, surveys, and stamp duty.
If you are a first-time buyer, it is worth looking into the Help to Buy scheme and see whether it’s a good option for you. Check out my Help to Buy post for more information.
Find your property
When you finish initially search for your new property, you will be hit with a lot of options and not sure where to start. Luckily, I have a guide that could help you decide. Check out my ‘What To Consider When Buying A Property’ post. This post will go through certain things you will need to think about which will help you find the perfect home for your needs.
Apply for a mortgage agreement in principle
By getting a mortgage agreement in principle or sometimes known as a decision in principle. The mortgage in principle will also show that mortgage lenders are willing to lend you a certain amount. By showing this document to estate agents and sellers will make you a more attractive buyer as it shows you can secure the amount of money to purchase the property.
Making Appointments To View Properties
It is important to view the property in person to gauge the property’s potential and whether you can see yourself living at the property. It’s important to explore the neighbourhood and the surrounding area. Make sure to view the property more than once and at different times to see how the light interacts with the property and how the local area is at different times of the day.
One Big Step – Make An Offer
Once you have found the property of your dreams, it is time to make an offer. It is common to offer less than the asking price as most sellers display a higher asking price than what the property is worth. Don’t forget to research how much properties in the area were sold in the past. It’s worth putting the offer in writing and email the offer to the estate agent.
Apply for a mortgage
Once your offer is accepted it’s time to apply for a mortgage. At this stage is where you will need to gather up all your statements and paperwork ready to submit to your mortgage advisor. The mortgage advisor will tell you what documentation they require for your mortgage application.
Find a conveyancer or property solicitor
For the legal paperwork side, you will need to instruct a conveyancer or property solicitor who will handle the legal side such as exchange of money and contracts. The conveyancer/property solicitor will check contracts, deal with the land registry, and pay any stamp duty if needed.
Property Survey
Your mortgage lender and conveyancer/property solicitor will get the property surveyed. Mortgage lenders get the property surveyed whether the property is worth investing in and find the resell value of the property. The conveyancer will get the property surveyed on your behalf so you can make an informed decision of any future repair works required or highlight anything worth knowing.
Search For Removal Companies
If you have a lot of furniture to move then you can hire a removals company to assist in your move. The cost of using removal companies will depend on the number of items you need to move and the distance to your new property. Check the availability of the removal company before agreeing to a completion date.
Home and Life Insurance
Most mortgage lenders need you to have home insurance from the moment contracts are exchanged. If the building was to be flooded or burnt down, you would not be protected. Life insurance is important in case you fall ill due to a life-threatening disease, which may hinder you from working. Life insurance would cover this part but also assist your family in case something were to happen to you.
Almost there - Exchange Contracts
Once you have your mortgage offer accepted and you read through the countless amounts of paperwork your legal team has sent through. If you are still happy to proceed with the purchase, confirm the completion date and just wait until the completion date to arrive. In the meantime start packing up your belongings ready for the move.
Last Sprint - Completion Day
On completion day, the money will be transferred to the seller and you can collect the keys from the estate agents and move into your new home. Once those keys are in your hands, officially that property is yours and you can start to move in. When you have fully moved in, you will have time to appreciate the new home you have just purchased.