Are you thinking of buying a home? The process can be pretty daunting, especially if you’re a first-time homebuyer. Research from Moveable shows that 2.9 million home-movers across the country didn’t budget for extra fees and had to borrow money to cover the costs.
To ensure you have the proper budget, we advise you to check whether you can afford to buy a home before starting house hunting.
Once you’ve decided whether buying a home is the right thing for you, you’re ready to start the process. To help you out, we have created a simple 11-step guide, talking you through all the critical stages of buying a property.
1. Create a budget
This is the most crucial step of the home-buying process, as it ensures that you’re set up for the rest of the process, and prepared for any unplanned circumstances. You should always budget above your initial figure to ensure some sort of safety net to fall back on if something goes wrong. This is particularly useful since house prices are sky-high, and there are many additional hidden costs – such as moving costs, conveyancing fees, insurance, homebuyer surveys – to consider.
2. Make sure your finances are in good shape
Firstly, you should figure out how much deposit you’re able to gather for a mortgage. Whether you’re being financed by your mum and dad or using your savings, you should confirm that the amount you can put towards a deposit is enough.
With so many types of mortgages on the market, it can be hard to decide which one would be the best fit for you. We recommend you get a mortgage broker to help you with this process, especially if you have unique circumstances like being self-employed.
As a first-time buyer, don’t forget to check if you’re eligible for the Help to Buy Scheme, which is due to end in March 2023.
3. Choose your location and find your dream home
When searching for a location, some key factors to consider are house prices, employment opportunities, things to do in the area, how the area adapts to any long-term views (plans for children), and how it will impact the type of property you’re after. For more suggestions on what to look for in a new area to live in, click here.
There should be a significant amount of research going into house hunting. This way, you’ll not only be able to get to know the neighbourhood better but also, you’ll get to know the local market well too.
4. Make an offer
You must ensure that you’re in the strongest position as a buyer when it comes to landing the home of your dreams. How much do you want to pay? Are you overpaying for a property that is probably worth less? Once you’ve made these key decisions, make an offer to the real-estate agent to seal the deal. Don’t forget that as a buyer, you also have the ability to debate prices and get towards a number that is attractive to both sides.
5. Arrange your mortgage
If you’ve followed the previous steps and organised your mortgage options in step 2, you will now need to complete the mortgaging process once your offer has been accepted. The lender will then make you a formal mortgage offer before you can exchange contracts for the buying process.
You should also consider whether now would be an ideal time to get life insurance.
6. Hire a property solicitor or conveyancer
Once you have agreed on an offer for your home and have completed the mortgage process, you should hire a solicitor or conveyancer to handle the legalities of transferring the ownership of the property directly to you. Moving homes can be stressful enough, so having a professional take on these tasks can help you out significantly. Then, you will need to put down a 10% payment from the deposit you arranged earlier on and provide this to your solicitor or conveyancer.
Read our Guide to Conveyancing for added information on the conveyancing process, and to avoid delays and errors, our top 5 causes for delays could provide you with important insight on what to look out for.
7. Exchange contracts
Once the exchange of contracts happens, both parties are legally committed to selling and buying the property – meaning that there will be financial penalties if either the buyer or seller wishes to stop the process.
The exchange of contracts happens once your solicitor or conveyancer has completed all their searches, a contract draft has been reviewed by both parties, a formal mortgage offer has been received, and 10% of the property price has been paid – also known as the deposit.
When this is all completed, both parties agree on a completion date – when the seller moves out – and the buyer gets access to the property. Normally, around four weeks after the exchange of contracts.
8. Ensure you have insurance
When buying a home, don’t forget to take out buildings insurance. Most mortgage lenders will make this a condition of the mortgage since you are legally responsible for the property from the exchange date.
9. Final arrangements and negotiations
This is the last stage in which you can negotiate any final terms. Many use this time to confirm what appliances and fittings are part of the purchase. As a buyer, you will need to arrange electricity, water and phone services.
During this period, your solicitor or conveyancer will inform the land registry of the process of transferring property ownership. Along with communicating with your mortgage lender to ensure the money has been processed, it is your responsibility to ensure that your deposit money is with them and ready to be paid.
Check out our advice on things that you should consider when moving, and how to make the move easier.
With Moveable, you stay on top of all these responsibilities while following easy checklists that help you get ready for your move. Our free platform also includes price comparison tools to ensure that you’re saving as much as you can when working with service providers such as removals.
10. Complete the sale and take possession of your new home
Completion means you have fully paid for the property and are now, officially the property’s new owner. This process often takes place at a specific time – usually midday. On this day, the money and deeds of the property are transferred through both parties’ conveyancers.
11. Pay the stamp duty and settle up with the solicitor or conveyancer
After you take possession of your new home, you will need to settle the account with your solicitor or conveyancer. Your solicitor or conveyancer will usually pay the stamp duty for you, as well as ensure that the change of ownership is registered with the land registry. You must ensure that these payments are returned. Sometimes, there may be a small refund if the solicitor has overestimated these costs.