You’ve made the decision to embark on the journey to home ownership. Here are the steps you’ll need to navigate until you can move in, set up and celebrate
Work out your budget
Take your deposit and add it to the total of 4x your salary (or 4x joint salaries if you are buying with someone else). These figures assume you are relatively debt-free.
Get a mortgage agreement in principle
An agreement in principle is an estimate of how much you could borrow from a bank or building society. Bear in mind it’s not a formal mortgage offer.
Check your credit score
A good credit score is a must if you want a mortgage. Check yours by getting a copy of your credit report from an agency such as Experian or Equifax. It will give you time to rectify any errors and make changes that could improve your score.
Start looking for your first home
This is the fun bit. Use our keyword search and raft of tools to streamline your search. Plan for between 15 and 20 property viewings before you find ‘The One’.
Make an offer
Do your research first. Use our data to find the average amount of time homes in the area stay on the market, and the percentage of asking prices achieved. Find out what you can about the seller from the estate agent – and what kind of offer they might be open to.
An exciting milestone, but hold off on the champagne as the seller is not contractually obliged to proceed yet. At things stands, it all hangs on good will and a handshake.
Shop around for the best mortgage
Seek advice from an independent mortgage broker. Compare rates with those offered by your bank and the lender that issued your agreement in principle.
A small difference in interest rate can translate into thousands of pounds a year and the type and length of mortgage can directly impact your future choices and flexibility.
Line up a solicitor
Your solicitor (also known as a conveyancer) will carry out all the legal work on your behalf. So seek out recommendations and make sure they are on the panel of the lender that’s issuing your mortgage.
Searches – local authority, drainage and environmental – can sometimes take weeks to process so make sure your solicitor has the ball rolling. You’ll need to transfer around £300.
Great news – but check over the offer over with a fine-tooth comb. A single mistake or a small typo could cause delays and even cause it to be withdrawn.
Commission a survey
Not mandatory but a very good idea. Don’t mistake a survey for a mortgage valuation which is for the lender’s benefit. Find out more about the three levels of survey you could choose from.
Get quotes for work
If the survey shows the property needs major work, get quotes for the costs of it now. You can use this to negotiate a discount off the agreed price.
Buy your buildings insurance
You become responsible for your new property as soon as you exchange contracts – but get cover now so you can tick it off the list. You can check the rebuild cost at the Association of British Insurers website
Agree on a completion date
It will be the job of your solicitor and the seller’s solicitor to agree and line up a completion date – when you get the keys to the property. Think about when is practically convenient but remember it will pay to keep flexible.
Send funds to solicitor
Transfer a deposit of at least 10% the purchase price before you exchange of contracts, or 5% if you’re taking a 95% mortgage. Many banks don’t allow online transfers of more than £25,000, so you will need to arrange a CHAPS transfer at a cost of around £25.
Congratulations! The contract to purchase is now legally binding. It works both ways, so if you back out or fail to complete on the stated date, you’ll lose your deposit and could even be sued by the seller.
Get a completion statement
This is effectively a ‘final bill’ from your solicitor which breaks down all costs that need to be paid before you can complete. These include stamp duty, legal fees and the balance of the mortgage.
Your solicitor will now check your seller is still solvent and owns the property you are buying.
Sign the transfer deed
You’ll need to sign this document – confirming you’re taking ownership of the property – in the presence of a witness. Your solicitor will then send it to your seller’s solicitor.
Pay for the property
Your solicitor requests the mortgage balance from your lender and transfers it to your seller’s solicitor along with all other outstanding costs outlined in the completion statement. In return, your solicitor will receive the title deeds for the property.
When the money is received (and cleared) in your seller’s solicitor bank account, you can complete – which means the deal is done! Your solicitor will arrange to pay the stamp duty and register your details with the Land Registry soon after.
Pick up the keys from the estate agent and move in. Always make setting up your bed with clean sheets your first job. You’ll thank yourself for it later. Enjoy!