For first time buyers who are ready to take the “leap” to a home of their own, The Mortgage Key has prepared a step by step guide to ensure all goes swimmingly.
Step 1) Planning & Budgeting
When deciding to buy your first home it is important to plan ahead and establish your budget so that it all goes smoothly.
A mortgage is a large commitment so it is important to ensure that your finances are in good order. You will need to start saving for your deposit, typically 10% of the property purchase price. It is also important to remember that there will be other costs to pay when buying your home including survey fees, conveyancing fees, stamp duty and moving costs.
- ensure your finances are in good order
- that you are on the Electoral Register
- that you are in steady employment or if self-employed that you have an accurate records of your income and taxes paid
- that you have copies of your last 3 months bank statements and pay slips
Before looking for your new home it is important to find out how much you can borrow on a mortgage.
The Mortgage Key can help you assess your borrowing capacity. We can give you a guide to how much you can borrow based on your individual circumstances. We can arrange an Agreement in Principle from a lender so you will know how much money you can raise to help purchase your first home.
As part of the budgeting process you must consider all monthly outgoings associated with owning your home including Council Tax, utility bills, maintenance costs and insurance costs to protect your property and your mortgage.
The Mortgage Key can offer you advice on all these issues, so please feel free to call us on 01728 862020 for a friendly, no fee, no obligation chat.
Step 2) Finding a home
Once you have your Agreement in Principle the next move is to find your property.
The Agreement in Principle is assessed on how much you can afford to pay for your home and therefore it is essential to find a property within your budget.
Start with a ‘wish list’ of things you would like from your property, ie number of bedrooms, garden, parking, location, etc.
Once you have drawn up your wish list find out what properties are available on the market. Contact local estate agents, search on-line and look in the local papers. You may have to compromise on your wish list to remain within your budget.
- take someone along to your viewings with you – they may see something you miss
- have a second viewing at a different time of day
- if buying a new home ‘off-plan’ be aware that it may be different from the show home and pay close attention to the plan details for room sizes, layout and aspect
- having your Agreement in Principle and Conveyancer in place will allow things to proceed faster when you decided to put an offer in on your first home.
Step 3) Making an Offer
Once you have found a property you would like to purchase, talk to the seller’s estate agent to find out as much as possible about the property, ie, what fixtures and fittings are included in the sale, does the seller want to move quickly, etc.
Decide how much you are willing to offer for the property and make the offer to the estate agent. Remember that the estate agent is working for the seller and will be trying to get the best deal for them and not for you! Every offer has to be shown to the seller and all offers should be confirmed in writing to both parties by the estate agent.
If your offer is not accepted you can consider negotiating and increasing your offer, however, you must never pay more than you can afford for a property or more than you think the property is worth.
Once your offer has been accepted the estate agent will send you a letter confirming this. You will need to give the estate agent your conveyancer’s name and contact details. Your conveyancer will need the details of the property, the estate agent and your mortgage provider.
When your offer has been accepted the property might be advertised as ‘sold subject to contract’ or ‘under offer’. This means that an agreement has been reached between you and the seller but either side can withdraw without penalty. It is only on exchange of contracts that a financial and legal commitment is made.
Once the offer is accepted a survey of the property will be undertaken to assess its condition and value. Different forms of survey are available, details of which can be found on our Surveys page.
Step 4) The Legal Process
The legal process when purchasing a property is called Conveyancing and can be carried out by either a solicitor or a Licensed Conveyancer.
The Mortgage Key’s Conveyancing page shows details of our panel of licensed conveyancers including contact details and fees. They all offer a ‘no sale – no fee’ policy for their services however disbursements undertaken, ie local authority searches, undertaken would still be payable.
What the Conveyancer will do – before Exchange
- complete certain tasks, ie, conducting local authority searches, checking the property’s tenure, etc in preparation for drawing up legal contracts for sale.
- discuss the contract and its terms and implications with you prior to exchange
- arrange a date to exchange contracts with the seller and negotiate the completion date for the sale of the property
Exchange of Contracts
On an agreed date, once all the legal implications have been verified and agreed, the conveyancers acting for both parties will swap or ‘exchange’ contracts. At this time your conveyancer will also transfer your deposit to the seller’s conveyancer. After contracts have been exchanged both the buyer and seller are legally committed to the sale. If you pull out after exchange you will lose your deposit and be responsible for legal fees to date.
What the Conveyancer will do – after Exchange
- prepare the Transfer Deed – the record that shows you as new legal landowner
- register your ownership of the property with the Land Registry
- arrange the final money transfer for the purchase of the property, including the mortgage money received from your mortgage lender
- prepare the final accounts including legal disbursements and conveyancing fees
Prior to completion it is your responsibility to ensure that your conveyancer has all the money required on completion day to cover all the costs in order to avoid delays.
- ensure that you have adequate Buildings Insurance for the property from the day of exchange – from this date you are legally responsible for the property.
Step 5) Moving Day
Once the conveyancers have finalised the legal paperwork and transferred the money on completion day you will get a phone call from your conveyancer telling you that completion has taken place and that you are the proud owners of your new property.
Once you have received the phone call go along to the estate agent who will release they keys to you.
- familiarise yourself with the utility meters, fuse box and stopcocks
- inform the utility companies of the meter readings on moving day
- ensure you have TV licence at your new property
- ensure you have adequate contents insurance
- register with the local authority for Council Tax and the Electoral Register
- have a handy box with you, including:
- – a kettle and cups
- – tea, coffee, milk, sugar & biscuits
- – cleaning products
- – torch & light bulbs
- – charged mobile phone
- – a sense of humour and a group of good friends!