Always start your research as early as possible, even if you don’t think you are ready it is worthwhile speaking to a mortgage broker so you can set your expectations and start to plan. This is arguably one of the most important steps to buying a property and will save you time and possibly heartbreak at a later stage.
The first thing you will need to do is get an idea of what sort of loan amount you will be eligible for. All UK banks and building societies have different criteria and rates, but at The Mortgage Library we do all the research for you and match you with the most competitive deals.
Once you have an idea on your budget, you will then need to start to research the area you want to live in. If you are staying local, this should be straight forward but If you are moving across the country to a new area, this may be a bit more complex and may well take a bit more time to investigate. You may find some things may be more important than others, like being close to a good school or railway station, for example.
Once you feel that you are ready to start looking for a suitable property, your mortgage broker can proceed to arrange your Mortgage in Principle. You can’t officially apply for a mortgage until you have formally secured an offer on your desired property but having a Mortgage in Principle arranged, is the closest you can get to financially qualifying yourself at this stage. Having this agreement will put you in a very strong position in comparison to other buyers that haven’t completed their financial checks. The lender takes some initial information and completes a credit check to make their decision on whether they would be happy to consider a Full Mortgage Application. Once approved it is normally valid for anywhere between 30-90 days, giving you plenty of time to shop around for a suitable property.
3. Choose a Property
It is important to visit as many potential properties as possible so you can get a better understanding of your personal preferences. You will also need to establish if these properties are freehold or leasehold, bearing in mind leasehold properties can often have additional service charges which may be enough to put possible buyers off. If you want to buy a house, these are usually freehold. Thanks to modern-day technology, the days of peering through estate agent windows and trawling through newspapers are long gone. Many people now do most of their property search online through websites such as Rightmove, On the Market and Zoopla Remember to consider the surrounding neighbourhood area of your property and not just the inside and outside.
4. Make an Offer
To put yourself in the strongest possible position to make an offer, you need to consider two things; being financially qualified and a being in a position to proceed. If you are a first-time buyer (or not dependent on selling a property), you are already able to proceed. If you are dependent on selling a property to proceed with the new purchase, you will need to make sure you have secured a buyer before the chain can be completed. At The Mortgage Library, we also like to ensure your Mortgage in Principle is all agreed prior to placing a formal offer, so you can always guarantee you will be in a position to proceed if the vendor accepts your bid.
If you haven’t had your finances in place prior to placing the offer forward, you may find yourself scrambling around last minute trying to sort it out, putting you at risk of the seller losing patience or losing out on the property to someone who was more prepared.
5. Arrange the Mortgage
Now that you have your offer agreed you will need to get your Mortgage in Principle formally agreed. This starts with submitting your application along with all required documents to the lender’s underwriters, (this normally includes ID, proof of income and bank statements). Sometimes the lender will also ask for further information on a case, for example, if a payslip shows sick pay, they may request a letter from the employer confirming the client has returned to work as normal. Once the lender is satisfied with all aspects, you will be issued a formal Mortgage Offer which is usually valid for around 3-6 months.
Ultimately, the underwriters of the Lenders’ want to assess that the mortgage is affordable now, and for the full term of the mortgage.
Your mortgage lender will also need to assess your chosen property to make sure it is suitable for their lending purposes. Normally the lender will instruct a third-party surveying company to complete a basic mortgage valuation, but sometimes this can be an automated valuation. Most applicants get the option to upgrade this Valuation survey to a paid Homebuyers Report or full Structural Survey should they wish. Although it is not mandatory to instruct a private survey, a lot of buyers will arrange this in order to have a clearer understanding of the state of the property they are buying. Ideally, no-one wants to worry about having to complete expensive unnecessary work on the property in the near future.
7. Instruct your Conveyancer
You may have had quotes from friends or estate agents but now is time to choose and formally instruct your legal representative now that your offer is agreed. You will need to return some paperwork to your conveyancer to start the initial process, where they will then deal directly with the vendor’s solicitor. This starts off by conducting searches on the property which may result in raising enquiries where necessary to ensure there are no major issues when you do own the property. They also handle drawing up and checking the contracts, as well as transferring monies between all parties. It is also hugely important to choose a good local solicitor, a good article about choosing a conveyancer is available here.
Remember you will need to make sure that your chosen conveyancer is on a panel with your mortgage provider, as some lenders only deal with solicitors that they have already chosen.
You’ve worked hard to get the property, now you want to make sure that you can keep the property if something goes wrong. The only mandatory insurance you must have in place is buildings insurance (when purchasing a leasehold property, this is normally included in the service charges). Most people choose to set up a contents policy alongside this, to protect all their personal possessions as well as their home. The other types of insurance to consider are life insurance, critical illness cover, income protection and accident sickness and unemployment cover. Your broker at The Mortgage Library will guide you on the most appropriate policies for you and they should be in place by the time you are ready to exchange contracts.
Once all parties have their mortgage offer, fixture and fittings have been agreed and all enquires are satisfactory, all parties can then look to agree on a suitable completion date. Both parties then need to sign their contracts and if the buyer has paid a minimum of 10% deposit, the solicitor can officially grant the exchange of contracts.
On the day of completion, the buyer and vendors solicitor organise the funds to be released and the title deeds of the property transferred appropriately.
And the most exciting part, take a deep breath…you finally get your keys and the steps to buying a property are over...until the next time!
We hope this has helped you answer the questions around how to buy a House UK. If you have any further questions or require any mortgage advice, please feel free to contact us on 01702 899 072.