Okay, so I know the title is slightly mis-leading, getting your first home isn’t a simple process and actually takes up a lot of time and causes copious amounts of stress. But, what I wanted to highlight and explain is that prior to getting a property offer accepted, I was confused and didn’t understand the house-buying procedure, however, now I am much more in the know of the process as I am going through it myself and I am by no means, an expert, but I just wanted to share the ‘stages’ of house buying with you. For those who are looking to get their own place and who are unsure of what each stage entails, here’s little ol’me trying to talk you through it. Hope you find it useful.
Before you commence with any mortgage applications, it helps if you have a quick look online at some mortgage evaluation sites to get an idea of how much you can actually borrow. Sites like Ocean Loans, Money Saving Expert and even Zoopla have a good calculation system that’s free to use. Next, register with some estate agents in the area you’re looking to buy in, they will be able to advise you on the current market and send through houses in the criteria stated and within budget. At this point, you can decide to use the estate agent mortgage advisor, bank mortgage advisor (sometimes, banks have really good cashback deals, so it’s worth checking out) or find your own broker. They will put you on their books and issue you an AIP (Agreement In Principle) based on small bit of information you have given, like deposit amount, current salary, bills you pay and any debt you have. They will do a soft print credit check and give you an estimate of how much the bank is willing to lend. Using this plus the deposit amount, you will have an idea of the price range you can look for a property in.
Now you can go house shopping (probably the most stressful part), kiss goodbye to evenings or weekends as you’ll probably spend all your spare time viewing properties until you find ‘The One’. Another thing to keep in mind, when looking for a property is don’t reach your maximum budget as you will need to fork out for fees (solicitor, broker, survey, stamp duty) aswell, so it’s best to keep some money back for that.
So you’ve found the one, finally, and you’ve made an offer and it’s been accepted, congratulations! Here’s is where the eight stages kick in to gear…..
Stage one, credit check – Banks need to know whether you have a good credit history, so they will submit checks on you to ensure that you have never missed a payment before, never been denied credit and that you have a good history of ensuring payments are current and up to date. Having credit cards and loans isn’t always a bad thing, it means, that you banks have previously lent to you before and that you are able to get credit, so they will take this all in to consideration.
Stage two, mortgage application – Credit check passed, woohoo, next stage is to apply for the mortgage. Your broker/ mortgage advisor will book in a meeting with you to discuss all the terms relating to borrowing the money and request information from you. They will go in to more details regarding you salary, expenditure and debts as well as terms of your mortgage, some legal parts and produce a chart of fees.
Stage three, survey valuation –This will be done via the bank, they will contact the estate agency the property is being purchased from and book in a survey. This is just a basic survey that the bank does in order to find out if the property is actually worth the price and is mortgagable (not an actual word, but makes sense, haa!) as such. Just a note that this is not a full survey, they only check what they can see physically and it is advisable that you organise your own survey to check every little corner of the property you are purchasing to put your mind at ease and also to negotiate with the seller if there are any faults found.
Stage four, underwriting – Now, the legal part kicks in, you should have a solicitor by now and they will start underwriting your documents, waiting for the draft contract from the seller’s solicitor to come through and also submitting searches to discover additional information about a property that often may not be obvious.
Stage five, mortgage offer –This stage and stage four pretty much come together at the same time. Your chosen lender will send through the mortgage offer in writing and you will need to check through all the details and make sure they’re correct. This pack is for you keep, your solicitor will also be sent a copy of this for them to proceed with further paperwork.
Stage six, insurance – There are two types of insurances you need to look in to, building and contents. The difference between the two types of insurance is simple, building is walls, windows etc and the contents is the sofa, the bed , and others. Once you have found the right one that suits, these costs are added on to your monthly payment as well as your mortgage.
Stage seven, exchange contracts – Nearly there, so your solicitor and the vendor’s solicitor have spoken, they have discussed all the terms and the legal side of things. Once the contracts have been exchanged, you are legally bound to purchase that property, no going back, eeeek! At this stage, a completion date is agreed.
Stage eight, complete – The day has finally come, your solicitor will arrange for the funds to go in to the seller’s solicitor and then you can pick up your keys. Happy moving!
I hope you found this post useful, I really didn’t want to make it too long, but somehow, it’s super long already. Like I said, I am going through the home buying process myself, so I am also finding out new things along the way which I may not have mentioned here, but can add at a later date. I just want to highlight again that I am no expert, but have learnt the process along the way, so just wanted to share this information with whoever is on the same boat.
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