12 Sep Demystifying the Home Buying Process: What to Expect from Start to Finish
Purchasing your first home should be an exciting time that sets the tone going forward. However, it’s completely understandable if reading about it can fill you with uncertainty and you’re not 100% sure of what to expect or when to expect it.
Don’t let this worry you, this guide is here to walk you through the most important steps of the home buying process, helping you to navigate your new homeownership journey with confidence.
Securing Mortgage Pre-Approval
The first step is to get pre-approved for a mortgage which will indicate how much a lender is willing to loan you. Your individual circumstances, employment, salary, and level of risk will influence how much a lender will be willing to loan to you whether you are a first-time buyer or already own a home.
Most first-time buyers approach their bank for a mortgage, however, you can also use a professional mortgage broker to negotiate the right deal from multiple lenders.
For example, if you are in full-time employment and can make a sizeable deposit using savings, a lender is more likely to offer you a loan for your desired property than if you were self-employed with less regular disposable income.
The interest rates for repayment are calculated based on current market rates and other factors.
The simplest way to get pre-approved is to:
- Calculate your budget – factor in a deposit amount, monthly mortgage payments (with and without interest), insurance, utilities, fees, council tax, and living expenses to determine what you can feasibly afford. Most banks offer free online mortgage calculators to give you an estimate of how much you can be loaned and what your monthly outgoings will look like
- Check your credit report and score – clean up any issues that may affect your mortgage eligibility. For instance, clear any outstanding debts such as overdrafts or credit card financing..
- Gather documentation – recent tax returns, bank statements, payslips, employment contracts, and other important documentation can help verify income and assets when being assessed for a mortgage.
- Shop mortgage rates – connect with brokers and lenders to find the best rate for your financial profile. Once you find the lender that can offer you the best mortgage rates, you’re one step away.
- Submit a mortgage application – once submitted, your chosen lender will review your documents and credit to make a pre-approval decision. Lenders will typically offer a fixed-rate mortgage for 2 to 5 years, which will then adjust to a standard variable rate based on current interest rates. However, there are other types of mortgages available to consider for prospective buyers. Your offer will typically be locked in for a period of 90 days before being rescinded.
Connecting with Estate Agents
Lettings and estate agents will be able to help you identify suitable properties that sit within your desired location and budget, and arrange viewings promptly.
Inform your estate agent of:
- Your price range and mortgage pre-approval amount
- Desired location, property type, number of bedrooms/ bathrooms and desired amenities
- When you’d like to move in
- Any must-have special features like gardens
You can either approach high-street estate agents in person to browse brochures, or peruse whole-market property portals like Zoopla or Rightmove, which will list properties that are being managed by various estate agents. You may even consider online estate agents as a further alternative.
Agents can advise if a property is competitively priced and in demand and will provide disclosures on the condition. Take notes on each place that is of interest and give yourself plenty of time to consider multiple homes. Don’t settle for the first one you find.
Viewing Potential Properties
Try to visit as many properties as possible and don’t let emotion and a willingness to get things done as soon as possible, govern your decision process. Stay objective as you tour a property, inside and out, looking beyond cosmetics and focussing on structure, layout, and size, together with any potential signs of issues such as water damage or pest infestation. Take measurements to confirm room sizes against the listings.
Assess renovations and repairs that may be needed now or later, inspect utilities and ascertain if appliances and fixtures are in good working order. It is also worth gaining an understanding of the neighbourhood and community amenities near to the property. Appreciating your commuting times to work or schools are another important consideration.
During this time, ask plenty of questions, as it really is the perfect opportunity to pinpoint exactly what you need to find out and marry that against your needs.
Home Inspections and Surveys
Thoroughly inspecting a property before making a purchase can save you from hefty restorative or renovation work down the line. A key consideration is the home survey process, and instructing an expert chartered surveyor will ensure that a comprehensive building survey and cost assessment is conducted for you.
Understanding the structural condition of the property may also necessitate a pest inspection. An on-site assessment for infestations of bugs, vermin like rats or mice, birds like pigeons etc. will highlight any such presence that can seriously damage properties if left unattended.
A title search is important to verify the seller actually owns the home and no liens or claims are attached. You should similarly fully appraise the property’s price and obtain an independent valuation allowing you to ensure the price you are agreeing to aligns with the property’s market value.
Your agent and solicitor can help coordinate all of these. If any unforeseen major or severe issues arise during inspections, they will typically advise you to renegotiate or walk away. However, if everything appears well, you can progress to the final stages.
Making an Offer
Your estate agent will suggest an offer price based on location, demand, market value, and the seller’s position.
If you are confident in the available property and can see yourself living there, you can submit an official offer that outlines:
- Purchase price
- Proposed move-in timeline
- Initial deposit amount – typically 5-10% of purchase price,
- Mortgage pre-approval proof
- Any contingencies such as inspection, appraisal, financing, etc.
The seller may accept the terms, but be to negotiate if necessary, until you reach an agreement.
Once your offer is approved, it’s time to instruct solicitors to facilitate the exchange of properties.
Conveyancing
This can be the most time-consuming part of the home buying process and one that is predominantly out of your hands. Once the seller has accepted your offer, you can instruct a solicitors’ firm to conduct the conveyancing of your prospective property.
This is a cyclical part of any home purchase, as the seller will need to do the same with the property that they will be buying, and so on.
Solicitors will outline the conveyancing costs payable by you to conduct this process. This part of the process encompasses quite a lot, easily suited to its own separate guide, but once you instruct your chosen solicitors to begin the conveyancing process, you can take a temporary step back.
The process will typically take several weeks to complete, with the buyer and vendor’s respective firms engaging with one another to confirm the validity, legality, and compliance of various documents and contracts.
Your solicitor will confirm when the contracts are ready to be exchanged and when completion can commence (more on this below).
Securing Finance
Your lender will finalise the mortgage approval after appraising the property. They may stipulate that you lock in homeowners insurance, but if you are buying a leasehold property, this isn’t always mandatory.
Your solicitor will review all contracts and the exchange process. The solicitor will also handle finalising your mortgage and arranging the transfer of monies and deposits.
Completing the Sale
The penultimate stage involves the exchange of contracts and the completion of the purchase.
Exchange – The legal ownership transfer takes place. Both parties sign contracts and the deposit is transferred to the seller’s solicitor. Once this is done, the sale is legally binding.
Completion – Remaining funds are paid and you receive the keys to the property.
Your solicitor will register the new ownership with the Land Registry.
Moving into Your New Home
Some final steps will make your move smooth and stress-free:
- Create a moving plan and timeline. Get in touch with a professional moving company if you need help taking all your furniture and belongings to the new property.
- Arrange utilities like water, gas, and electricity to be transferred into your name for the move-in date.
- Redirect any post to your new address through Royal Mail. Send change of address notices.
- Arrange a deep clean and any minor renovations before moving in, if needed.
Proper planning and preparation will ensure your home purchasing process is exciting and not overwhelming. Enjoy settling into your new home and good luck with this new chapter in your life!