Buying your first home is a nerve-wracking and complicated process. It’s all worth it in the end but it can cause you a lot of stress along the way. We’re here to give you a step by step guide to buying your first home…
Save For Your Mortgage
Usually, you’ll need at least a 5% deposit of the cost of the property you are looking to buy. Say the house you are looking to buy is £300,000, you’d need a £15,000 deposit to be able to lend the remaining £285,000.
It’s worth looking at the help to buy scheme. The scheme allows you to purchase a property with a deposit of just 5%, alongside a 75% mortgage from a bank or building society. The remaining 20% is funded by the government in the form of an equity loan.
Also look into a Lifetime ISA, which is used specifically for buying your first home or saving for later life. You can put a maximum of £4,000 a year into the ISA and the government will give you a 25% bonus to your savings.
To use the Lifetime ISA to buy your first home there are a few stipulations: the home must not cost more than £450,000, you must buy the property at least 12 months after you make the initial deposit into the ISA. You must also use a conveyancer or solicitor to act for you in the purchase and you must be buying with a mortgage.
Research Where You are Planning to Live
If you are staying in your home town you’ll probably be familiar with the area and everything we mention in this section. If you are moving away though it’s, of course, important to do some research.
Look into things like local schools and their catchment areas – these can affect house pricing if the home is in an area with good schools. Also, look into transport links and local infrastructure, check if there’s good public transport near the home and what businesses are nearby along with any redevelopment plans.
It’s also worth checking crime levels nearby. This is easily done online and can give you a bigger insight into the area than you initially think.
Get an Agreement in Principle
Applying for your mortgage and getting an agreement in principle (AIP) means you’re much more valuable as a buyer. An AIP is a confirmation from your lender that they are willing to, in principle, lend you a certain amount of money.
Having an AIP makes you a more attractive buyer as sellers and estate agents can see you will be able to secure the amount of money needed to buy the property.
Register with Local Estate Agents
When you are set on your area it’s time to register with local estate agents in that area. Registration is free and you don’t have any obligation to buy if you do register.
By keeping in touch with local agents you might increase your chances of getting the home you want. Some agents will contact registered buyers before listing a property online, meaning you can get ahead of the curve if you’re contacted.
View Properties and Make an Offer
Inevitably you’ll spend a lot of time looking at homes online but it’s even more important to look at properties in person. Viewing properties in person will give you a good understanding of the property and decide if it’s right for you.
It’s also worth looking at a property more than once, at a different time to check for any problems.
If you’re happy with the property it’s time to make an offer! Depending on the property and how much interest it has, you may be able to offer less than the listing price. If interest is high though it’s not unheard of to offer more than the asking price.
Look at how much similar properties in the area have sold for in the past and work out your offer based on these. Mention any point you have in your favour (like your AIP) and hopefully your offer will be accepted.
Apply for a Mortgage
When applying for your mortgage, you’ll need to consider the type of mortgage that is best for you and how long you want the mortgage term to be. You can see how much your mortgage rate will be using a mortgage repayments calculator online and make your decision on this.
Find a Property Solicitor or Conveyancer
Conveyancing is the legal process that begins after your offer has been accepted. It includes carrying out searches, creating and checking contracts, dealing with the land registry and paying stamp duty.
You have the option of using a conveyancer who specialises in property but may not be a qualified solicitor. A solicitor, on the other hand, will be fully qualified but may not have as much experience in property law.
Get a Property Survey
Property surveys help you assess the condition of the building and find any structural defects or problems. It’s entirely up to you if you do get a survey but it’s important to be aware of any issues before you purchase the property.
It can help you lower the price if you need to make repairs or you could potentially get the seller to fix the issues before the property is sold.
The exchange of contracts will happen when the buyer and seller’s legal representatives swap signed contracts and the buyer pays their deposit.
Before the contracts are exchanged, you’ll need a written mortgage offer, an agreed date of completion and building insurance in place from the day of exchange.
Once the contracts are exchanged you can relax, the agreement is legally binding and the property is as good as yours!
Completion can take a couple of weeks after the exchange but once you have decided on a date it is fixed and can’t be changed, so you can start to count down the days! On completion day the money will be transferred to the seller and you can collect the keys to move into your new home!
If you have any questions or need some assistance with buying a new home, don’t hesitate to contact us and we’ll be happy to help out.
Millie is a perfectionist with a passion for property and writing articles. You’ll find her researching the latest housing trends and the newest up and coming areas worth investing in.