As exciting as buying your first home may be, between the estate agents, solicitors and paperwork, the process itself can be a daunting one. If you plan on taking that first step onto the property ladder, here's what you need to know.
Before you rush headlong into the nearest available home loan, it's important to do your homework and understand exactly what you're getting into. Though a mortgage is just a loan that enables you to buy a property, there are a variety of options available in terms of fixed rates, variable rates, shared ownership and so on, so knowing which is best for your particular circumstances is a must.
An online search is then probably the best place to start, as it allows you to get a good idea of what is available given the amount you have a deposit. A mortgage broker may also be able to help with a more extensive search, though do double check if they will be charging fees.
Last month new rules about mortgage lending came into force, meaning that buyers will now need to undergo an in-depth interview aimed at ensuring they are able to afford their mortgage, even if interest rates rise, so when it comes to getting a loan, go armed with all your financial details, including expenditure, life plans and bank statements.
If you have a good record and relationship with your own bank, don't rule them out as a possible lender, as they may be able to offer existing customers a special deal.
Should you find that perfect property, it's time to put in an offer, usually through the estate agent. At this stage it is advisable to have a mortgage agreed in principle, as it will mean your offer is more likely to be accepted, and the process will get underway much faster. Once you've made your offer, the estate agent come back to advise whether it has been accepted by the vendor, and if so, the process can begin.
With your offer accepted, a solicitor or licensed conveyancer will need to begin putting all the legal paperwork in place. Your mortgage broker may be able to put you in touch with a reliable solicitor, or if you decide to search for one yourself, do take the time to phone several in order to get a good price. Once appointed, they can begin to check any possible planning or local issues that may affect the value. But do be prepared to keep chasing them up throughout the process in order to get the deal done as quickly as possible.
While a survey may seem like just another added expense, it is a necessary evil in most cases. There are three types available, varying in price. A condition report, the most basic of surveys, will not include a valuation or investigate any possible structural problems. A homebuyer report is more thorough, and will look at potential issues both inside and outside, while a building or structural survey is the most comprehensive, and is advised for older or more unusual properties.
Your local surveyor will usually be able to advise on which is best suited to your needs. If the survey does throw up any problems, your surveyor will be able to give you an idea of how much they would cost to fix, and you can then either try to renegotiate the price with the seller, or pull out of the buy altogether.
Exchange and completion
Once the solicitor and surveyor are happy, the contracts are signed and exchanged with the seller, and the deposit on the property, typically ten per cent or more, is paid. Ask the seller to take meter readings at this point, so that you start with a clean slate on the utility supply front. Should you pull out of the deal at this stage, for whatever reason, that deposit will be lost.
Soon after exchanging, you and the seller will complete the sale. The remaining price of the property will be transferred by your mortgage lender, you will pay the solicitor's fees and stamp duty (depending on the price of your home), and then it's time to move in.
Buying your first home needn't be stressful, particularly since you won't have the worry of trying to sell a property at the same time, but proper research and preparation will ensure that you are best placed to make good decisions and get into your new home at the earliest opportunity.
Have you recently bought your first home? What advice would you give to other first-time buyers? Leave your comments below...