One of the biggest accomplishments and milestones you can experience in life is becoming a home owner. I am 29 and last week I finally got the keys to my very first house. In the past I rented a flat before deciding to move back home with family. But after spending my money on living in a place for months and then just leaving it all behind, I felt like I had nothing to show for it and so I decided I would never rent again and was lucky enough to be able to save my money whilst living at home towards a deposit of a house.
Buying a house is a complete mind boggling experience and honestly without my family advising me on what I needed to do I would not have had a clue!
So I thought I would try and simplify the steps to buying house to help those that may not know where to start or maybe in the process of themselves as to what to expect next!
1.) The first step is to get mortgage advice or to simply go online using this simple calculator and you can get a rough idea on how much lenders (the banks) are willing to lend you based on your income and expenses.
I did this and then added my deposit on top and it gave me an idea of what price range of houses I could look at.
2.) Get a mortgage in principle. This basically means an agreement by the lender (bank) that they are willing to loan you the money for the mortgage. You can get one these from a mortgage adviser (if you decide to use one of these) or by applying yourself directly through the bank. Most estate agents will want to see this before considering your offer as to buy a house.
If you use an adviser it is easier as they do it for you and find the best rates (interest you will pay for the mortgage) but be aware that they will charge you for their service which is another added cost to the process if your on a tight budget.
3.) Find a home (the fun bit!) This was my favorite part as I enjoyed using my weekends looking around other peoples houses and looking at their decor choices (some were pretty terrible!) The only thing I didn’t like was when you do find your perfect home, make an offer and find out that a higher offer was accepted – this happened to me and it was heartbreaking!
4.) You have had an offer accepted – congratulations! Now what?
You have to find a solicitor to act on your behalf and carry out all the searches on the property and the land it is on to make sure that you are fully aware of what you are committing to buying and that you are not actually just buying their garden shed! They draw up the contracts between you and the seller and make sure everything is as it seems.
5.) Apply for your mortgage. If you have gone to an adviser this is quite easy as you just have to let them know that you found a house and they will send off your paperwork to the mortgage lender for the amount that you need to borrow for the house.
This then goes to the ‘underwriters’ of the bank who look very closely at your income and outgoings from your bank statements and make sure that you will be able to afford the repayments of the mortgage. Once it gets past them then you are highly likely to have the mortgage approved!
6.) A valuation or survey?
All lenders (bank’s) will want at least a valuation done on the property before agreeing to lend you the mortgage as they want to make sure that they are getting what they pay for basically as they are the ones lending you the money for the mortgage. Some mortgage providers include this with their mortgage offer (mine did). It’s then up to you to choose if you want to pay extra to have something extra called a ‘Home Buyers Report’ which looks in more details at the condition of the property and if for example you are likely to have issues with the roof or subsidence.
7.) Await the searches and information from the solicitors about what the seller is agreeing to include with the sale of their property (e.g. some people may leave their washing machine, wardrobes etc.) its up to you to advise your solicitor what you would like included and negotiate if this is included in the sale of the house.
8) Exchange of contracts! Once you have received your contracts from the solicitor then you will need to sign these with a witness (who is not family) and send these back to the solicitor for them to send to the seller to sign.
9) Your solicitor will then probably be an position to give you a completion date for the sale of the house and instruct you to get buildings insurance which is mandatory for the bank to lend you the money for the mortgage! For example if the house burnt down and you didn’t have insurance then the bank would loose their money not you so this is why its needed before!
TIP: AVOID mortgage adviser/in house recommendations for buildings insurance as this is usually overpriced! Get your own through comparison sites such as moneysupermarket.com
10) Once the solicitor has received a copy of your buildings insurance and sent this to the bank to confirm then they will then probably want to be paid and will request you to transfer their fees and your deposit for the house (usually 10% of the house price) into their account.
11.) Await the completion date and get the keys to your new home! Usually when all the money’s is exchanged through the solicitors into the accounts of the bank’s (usually by 1pm) then the solicitor will contact you and and let you know that you can pick the keys up from the estate agents.
12.) Mandatory shopping trip to Ikea (It has to be done!)
Maybe some of the steps might be a little different for other people depending on their situation and house purchase but I thought I would share my experience as a first time buyer and not knowing what to expect as maybe it will help others along their journey!
Happy home hunting 🙂
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