The ultimate guide to buying a house
This guide has all the information you need about buying a house. From fees to mortgages, we cover the basics for first-time buyers and movers!
Buying a house is a daunting thing, especially for first time buyers – even if you’re moving it can be a headache too! For some, the process is alien, even some secondary buyers have no idea what’s going on when it comes to buying a new home. That’s why we’ve teamed up with leading estate agency, Essex Countryside, to bring you the ultimate guide to buying a house. In this guide, you’ll find all the information from the process of buying a house, to landing a mortgage and all about the fees entailed in buying a property too. So, whether you’re a first-time buyer or moving to a new house, you can bet we’ve got some information to help you understand the process. This guide is your step by step to buying a house.
Your Step By Step Guide
1. Is Buying The Right Thing?
The most important question to ask yourself before you buy is: “is this right for me?” Many first-time buyers may think that they’re ready to buy, but many considerations need to be taken into account before you take the keys. One of the biggest factors is the housing market. The current economy and housing market dictates the price of houses, so it’s important to know the right time to buy. Some houses may be more expensive in a prosperous housing market, but despite what you may think, there is a right time to move. Sometimes, it takes a little patience and a little market research. Moving house in a bad market period means your home could not fetch as much as you thought, so it’s important for both movers and first-time buyers to consider the housing market before pulling the trigger on a purchase.
Also, consider your savings. The same goes for both first-time buyers and movers. For buyers, your savings are most likely to be for your mortgage. The best mortgage rates are available to those with a bigger deposit. So, the more you save, the better off you are in the long run. Also, consider the costs of furnishing your home too – it’s no small thing, it’s costly. The same goes for movers, do you have enough to spend on fees like surveying fees and moving costs? It all adds up, so just be sure before you jump ship for a new home. The more time you have, the more you can save – so think before you decide.
2. Sell First (Movers)
This goes for the moving crowd especially. If you’re sitting at home thinking, “let’s move house!”, then stop. Instead of focusing on finding the right property, put yours on the market. Not only will it help you set a budget, but it will alleviate pressure on buying. If you’ve sold it means, you won’t be caught in a ‘housing chain’, waiting for your home to sell whilst trying to hold onto your dream house. It frees up your capital, meaning you can go in, put an offer down and move a lot faster than those stuck in the dreaded housing chain. However, if the market rises than you may be caught short. Whilst this is a risk, if you follow step 1, then you’re more than likely to be fine.
3. Decide Your Budget
So, for the movers that have sold their property / have their home valued, you’ll know what you can afford to spend on a new home. Remember, always take into account agency fees as well as moving costs too. For first time buyers, you’ll need to see what kind of mortgage you can get in order to buy a house. Usually, you’ll need a 5% deposit of your desired property’s price. But, the more you can put down, the better the rate you’ll receive. 5% of a £200,000 home is around £10,000, but the more the better. Although, saving forever is not the ideal for everyone. Deciding your budget is an excellent way to help you look for a house, so you don’t look for properties out of your reach. Mortgage brokers can offer you advice on mortgages, for a small fee, and help you find out what sort of rate you can get.
4. Pick Your Area
A big part of buying is to pick where you want to live (obviously). Whether it’s locally or further afield, you’ll need to do your homework on your desired area before you think about looking at properties. Places up North are usually cheaper, and the closer you get to the centre of London, the more expensive. Areas in school catchment areas and near transport links (buses and trains) are usually higher priced as they are more desirable. However, some areas have more road noise and higher crime rates. Luckily, all these statistics can be checked online, through various free websites. So, you can find out about your desired area, before you hop in the car to look around.
5. Choose Your New Home
Once all the research and planning is finally out of the way, now is the time to pick your dream home. Whilst this may sound easy, it’s no small feat. Especially if you’re a couple trying to pick (conflicting opinions, of course). It’s a good idea to make a list of everything you want before you start looking. What’s important to you? Garden space, bedroom number, lounge size etc. All of these factor into what kind of house estate agents will show you around. You’ll need to be aware of what to look for when viewing a property and what questions to ask too. Your estate agent will be able to assist you throughout the entire process.
6. Put An Offer Down
If you’ve found your dream home, then it’s time to put an offer down! Yes, to secure your dream home, you’ve got to put a bid in, and keep your fingers crossed. If you offer market value, then you’re more likely to get accepted. However, be aware of the actual cost of the house. It may be priced to high or may be the desired price of the seller, so it’s ideal to try and negotiate a price before putting down your offer. Some estate agents may ask for a holding deposit, to ensure that you are serious about following the sale through to the end. This is normally around £500 – £1000, depending on the house’s cost, if the sale does not go through however, you will be refunded. Then, after talking with the estate agent, your offer should be accepted by the seller (hopefully).
7. Get A Mortgage (First-Time Buyers)
After deciding your budget and getting your finances in check, now is the time to apply for a mortgage. So, take the savings for your deposit on a house and get some quotes on a mortgage for your desired home. Make sure you do this ASAP, as you don’t want to drag the whole process out longer than you have to. Luckily, recent change to government legislation means that first-time buyers will not have to pay stamp duty. The requirements for stamp duty exception are not just for first-time buyers, there are numerous conditions to pay less or no tax. Here they are as listed on the government’s website, and include:
- If your purchase is completed on or after 22 November 2017.
- Your house is priced at £500,000 or less.
- If you are a first-time buyer.
Your mortgage is largely dependent on your credit rating, which can be checked on numerous free credit score checker websites. You will need a formal mortgage offer before you can complete the purchase of your home. Contracts will and cannot be exchanged without a mortgage offer. This won’t apply to those moving as you’ll probably have a mortgage already from your first home.
8. Solicitors, Conveyancers And Surveys
Now comes the legal stuff. Once your offer has been agreed with the seller, you need to enlist a solicitor or conveyancer to handle the transfer of the property to your ownership. Sometimes, your mortgage company requires you to use their legal services or the estate agent can even recommend a solicitor or conveyancer for you to use. The legal work includes background checks and research on the property (in terms of local authority and Environment Agency), to check there are no serious issues with the property. You’ll also need a survey on the property, carried out by a surveyor for the purposes of your mortgage company. This is for the mortgage company to make sure that the property is satisfactory for them to lend against. Not only that, but a survey will alert you to any issues you may face moving in, so it’s ideal to get the full works. Not just for your mortgage lender but for yourself too.
9. Deposits And Contracts
Once you have undergone all the necessary checks to your property, it’s time to give a deposit to your solicitor or conveyancer. This is around 10% of the property’s sale price, and can be taken from the sale of your home or from your mortgage. Then, once your solicitor or conveyancer has your deposit, comes the contract exchange. At this point you are legally obligated to complete the purchase of the property. Likewise, the seller is legally bound to sell to you. So, this is where the housing sale is locked down and will not fall through (hopefully). If you pull out at this stage, you could lose your deposit. However, do not exchange contracts until your survey is complete. Any vital work that needs to be carried out will become your responsibility after contract exchange. Then, you’ll need to agree a completion date. This is the day that you officially own the property, as all the legal documents are officially signed over to you, the buyer.
10. The Final Details
After all of the above, it is time for the little things. This is the time to negotiate any of the minor details of the property that have not previously been discussed. Details such as if the previous owners are including white goods (fridge, washing machine etc.), in the sale of their property. Other details include the electric, gas and water suppliers too – the seller should have taken readings before they move out. Then, plan your moving day – think about what you’ll need and what date works best before you decide anything. Your solicitor or conveyancer will have informed the land registry that you are in the process of taking ownership of the property. Your mortgage should be ready for the day of completion, as this is when the deeds and money are transferred between the buyer and seller.
And that’s it, the property is now yours! Collect your keys and plan your move. You can move in or get builders in for renovations, or any other work you want done on the property. This is the time to pay your solicitor or conveyancer for their services. If applicable, you’ll pay stamp duty as this stage too. You’ll receive an itemised account of all the costs, the house’s price and stamp duty too. The stamp duty will be included in the solicitor’s or conveyancer’s fees. Once you’re all paid, then your house is ready to become your home! You’ve completed the buying process and now are the proud owner of your property.