It is often said that the three most stressful things a person can experience are divorce, changing jobs and moving house. The first two are beyond the scope of this article. As experienced mortgage and financial advisers, however, for those looking to buy a home – we can help.
One way to help alleviate the stress of moving house is to have a clear idea of what’s coming, in which order, and at what kind of cost.
So here, we’re going to talk through 15 steps when buying a new home!
Step #1: Look at affordability
It might seem obvious, but it’s an important thing to do. Can you actually afford the property you want to buy? There are lots of mortgage calculators you can use online to get an idea of the deposit needed, and the ballpark mortgage payments.
Step #2: Understand ballpark timeframes
Although it doesn’t always pan out like this, typically it takes 6-8 weeks to complete a purchase in England, Wales and Northern Ireland.
Remember, you need to choose a property to buy and put in an offer. This process can take 1-3 months, assuming your offer is accepted and you get the surveyor and solicitor involved.
After that, exchange to completion can be very fast – sometimes instant. Other times, it can take a month to sort out the payment, keys and deeds.
Step #3: Find a Property and Offer
Simple enough. Get onto a property search website and look for the kind of property you want to buy. Once you find one you like, put in a reasonable offer that you can afford.
Step #4: Find & Choose a Good Mortgage
Assuming your offer is accepted, it’s time to find a good mortgage. Make sure you shop around and find the best rate.
Remember, the difference between 4% and 5% over the lifetime of a mortgage spells thousands of pounds. You usually have about 30-90 days before your Agreement in Principle (AIP) expires, so don’t put off your search for too long.
Step #5: Find a Conveyancy Firm
To legally transfer ownership of the property to yourself, you’ll need a conveyancy firm to sort out the legal paperwork. Just be aware, the total costs can run up quite high (e.g. up to £1500).
Step #6: Move from AIP to Application
After the AIP is over, it’s time to complete a full application. Here, the lender will make sure they are happy to give you a mortgage, and will check the property (through a basic valuation) to make sure they’re happy to lend on it.
Whilst this is happening, your conveyancy firm will conduct some important searches for you, such as drainage, environment and local authority. Naturally, these searches come at a cost, so make sure you understand their fees before commissioning them to do any them.
Step #7: Think About Getting A Surveyor
Your lender will carry out a basic valuation to check the property, but it’s usually a good idea to get your own surveyor too.
Remember, you cannot rely on the former, if later something turns out to be wrong with the property that you didn’t see before.
If you’re going to do this, make sure it happens before you exchange.
Step #8: Mortgage Offered
Well done. If you’ve reached this point, then the lender has made you an offer.
Time to celebrate!
Step #9: Get insured
Make sure you do this before you exchange the contracts. At that point, you are required by law to buy the property. So make sure you have adequate buildings insurance in place, even if you think you do not yet own the property.
Step #10: Agree the Finish Date
At this point, your conveyancy firm should have reported back to you with their searches. Assuming all is well, it’s time to agree the completion date with the person/people you are buying the property from.
Step #11: Deposit
Time to pay the deposit amount to your solicitor. It’s a big scary, handing over such a large amount of money! Just make sure that in the lead up to this, you move the relevant money for the deposit into one, secure bank account, ready for the transfer.
Just be careful to keep the total amount under £85,000, so it is protected by the Financial Services Compensation Scheme in the very unlikely event anything happens to it.
Step #12: Swap Contracts
This is the point where the party can really begin! Your solicitor will arrange the exchange of signed contracts between you and the seller, marking a ironclad legal set of documents securing the sale of the property.
At this point, your solicitor should also hand you a completion statement. This will detail which fees you owe them for their services, as well as other financial obligations such as stamp duty land tax. These have to be paid before the finalisation date you agreed with the seller.
Step #13: Transfer Deed
This will be prepared by your solicitor, and you need to sign it under witness. This proves in law that you are willing to own the property.
From here, your solicitor should then ask your lender for the mortgage money. This is where you end up receiving the mortgage money you asked to borrow for the property.
Step #14: Pay up
Full payment will then be sent from your solicitor to the seller’s solicitor. They will also receive proof that their mortgage is now cleared with their lender, as well as their title deeds.
Well done. At this time, you can now safely say you own a new home! Just make sure that you pay your stamp duty via your solicitor.
Step #15: Registration & Deeds
Your solicitor will need to contact the Land Registry with your information, and you’ll normally need to hand over about £200-£300 to cover the costs involved with the registration process.
From here, the Land Registry will hand the title deeds to your solicitor, who will then pass these on to your lender. If you do not have a mortgage and own the property outright, then these deeds will come directly to you instead.
And that’s it!