Everything you need to know is covered in our comprehensive guide to buying a house, from saving for a down payment on a mortgage to submitting an offer and moving in.
Purchasing a house is a difficult and often drawn-out process, but if you understand the fundamentals of how it operates, you’ll be less likely to be caught off guard and have a simpler time doing it.
Learn how much you are able to borrow.
A mortgage provider’s loan amount to you will be determined by a number of factors, such as your income, credit score, and deposit amount. The lender will consider the other buyers’ finances if you are purchasing a house with them.
Banks will often let you borrow up to a certain percentage of your (monthly/annual) pay, however exact amounts will vary on the lender, your credit history, and the amount of your deposit.
It’s important to factor in extra expenses for purchasing a house, such as surveys, conveyancing, and stamp duty, which varies based on the property’s price and if you’re a first-time buyer.
Also read: What exactly is a mortgage?
Do some research on the field you have selected.
Spending a night or two in a town or neighbourhood you’re considering moving to might be worthwhile in order to get a feel for the commute, local stores, eateries, and vibe.
Before making a purchase, even if you’ve lived in the town your whole life, it’s crucial to conduct some research on the neighbourhood.
Considerations to make include School catchment areas: The neighbourhoods around highly regarded schools may have more expensive real estate. Transport connections: Having access to a road or a train station nearby may increase the value of a home.
Plans for local infrastructure: although new business and residential construction may enhance neighbourhood services, it also has the potential to increase traffic and pollution. Flood zones: Verify that the region is not at danger by consulting flood maps. Crime levels: use the police.uk website to see the sorts and frequency of crimes.
In theory, apply for a mortgage arrangement.
An assurance from a mortgage lender that they would, in theory, be ready to give you a certain amount is known as a mortgage agreement in principle, or AIP. Another name for it is a decision in principle (DIP). Having an AIP may help you stand out as a buyer by demonstrating to the seller and their real estate agent that you have the financial resources to acquire the money needed to purchase the home.
Sign up with real estate brokers
After deciding on the location or places you want to purchase a property in, sign up with nearby real estate brokers. There is no cost to register, and doing so won’t obligate you.
Keeping in touch with local real estate brokers may help you locate the house of your dreams since brokers may sometimes get in touch with registered purchasers prior to placing a property on the internet.
See the properties in person
It’s inevitable that you’ll spend a lot of time looking through real estate websites, but it’s crucial to see houses in person in addition to online.
Seeing houses in person can help you appreciate their potential—or lack thereof—and determine if they evoke a certain “feeling” in you that is difficult to describe on a screen.It’s good to check a place many times throughout the day when you locate one you like since you’ll be more likely to spot any possible issues.
Put out a proposal.
It might be difficult to decide just how much to contribute.
It is customary to make an offer that is less than the asking price, however this varies from property to property. You could have to offer the asking price and even more if there are other interested parties or if the market is really hot.
To determine the property’s value, you might look at the recent sales prices of comparable houses in the same neighbourhood.
You can inform the estate agent in person or over the phone after you’ve determined how much to offer, but it’s also a good idea to put it in writing.
Mention any advantages you may have, such as being a first-time, chain-free buyer, and clarify that your offer is contingent upon a survey and the property being removed from the market. By doing this, you may be less likely to get gazumped.
Look for a property solicitor or conveyancer.
The legal procedure that follows the acceptance of your offer is called conveyancing.
This include drafting and reviewing contracts, conducting searches, interacting with the Land Registry, and paying any applicable stamp duty.
You may work with a conveyancer, who may not have a law degree but will focus on real estate, or a solicitor, whose knowledge with property law should be current.
Obtain a home assessment
House surveys are useful for evaluating a building’s state and identifying structural issues.
Even if doing a survey is voluntary, it’s best to know about any problems before making a purchase so that you can decide how much to give and set aside money for any necessary repairs.
You may also be able to urge the vendor to remedy any issues or reduce the purchase price by using a survey. Three “levels” of surveying are offered by surveyors registered with the Royal Institute of Chartered Surveyors (Rics), whilst two levels are offered by those registered with the Residential Property Surveyors Association (RPSA). The location, size, and kind of the property will all affect the price.
It is important to distinguish between a home survey and the value study carried out by your mortgage lender. You should always have an independent survey completed. Learn more about home surveys, including their potential cost and where to go for a surveyor.
Get house insurance.
Buildings insurance must be in place on your new property as soon as contracts are exchanged; in fact, the majority of mortgage lenders will need it in order to provide financing.
This is so that you wouldn’t be covered if the building were to flood or burn down before the day of completion and you weren’t insured. You are legally obligated to purchase the property from the minute contracts are exchanged.
The insurance coverage for a newly constructed property does not need to start on the day of completion.
Trade agreements
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When the legal representatives of the buyer and seller swap signed contracts and the buyer pays the deposit, the exchange of contracts takes place. A signed mortgage offer, a mutually agreed-upon completion date, and building insurance from the day of exchange (or from completion if you’re purchasing a new structure) are just a few of the requirements that must be met before the contracts are exchanged. You may exhale with relief after the contracts have been exchanged since the agreement for you to purchase the home is now enforceable. There is very little possibility that anything will go through from this point forward.
You will be able to pay the seller and apply to the Land Registry to have the deeds transferred into your name when your conveyancer files an interest in the property.
Finish and relocate
Usually, the exchange takes occur two weeks later, but you may work with the seller to choose a time that works best for you. The funds will be transferred to the seller on completion day, at which point you may pick up the keys from the real estate agent and move into your new home.
The far more fun part begins when you begin to equip and decorate the house to your liking and maybe even take a chance to unwind. You’ll be worthy of it!
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