Step by Step: Genius Guide to Buying Your First Home

Buying a home is a process involving a number of different parties and it’s important to understand the gears involved in the home buying process. From valuers to solicitors, let’s learn about what’s to come on your home buying journey!

1. Speak to an adviser!

Before you go house hunting, speak to a mortgage adviser about how much you can borrow. There's no point in viewing homes you may not be able to afford and on the converse, you don’t want to be limiting your budget too much when it comes to decisions like schools and amenities. Most advisers will be able to provide you with a “Decision in Principle” with a lender before you spend any money, it’s effectively a credit check with a lender and confirms your ability to borrow and how much.

2. Find the perfect home!

With a budget in mind and confidence with the financing, you’re in a great position to be viewing homes! Do some research in the local area to make sure you don’t go over your budget. Try and spot any potential damage such as damp and condensation and be sure to ask to see as much as you can. Factor in any works you'd want to carry out before you decide how much to offer. Upon the estate agent accepting your offer, they will usually ask for the following items:

• A Decision in Principle Certificate

• Details of your acting solicitor

• Proof of Deposit

3. Submit your mortgage application

Send your mortgage adviser the requested documents as early as you can, getting your mortgage underwritten by the bank isn’t an overnight process so be sure to liaise with your adviser regularly. Lenders can sometimes go back and forth with document requests and queries so the quicker you satisfy the lenders requirements the quicker you’ll get your mortgage offered. Send your broker the correct information as per what they require and if you’re unsure; ask your adviser, that’s what they’re there for!

4. Valuation

The valuation or survey of the property is normally instructed by the lender either at the point of the application being submitted or once the lender has underwritten your mortgage and documents. Every lender will require a valuation or survey of the property. Basic valuations are normally instructed as the standard type of valuation, you can either proceed on a basic, homebuyers or a building survey. Be sure to read up on these and discuss with your broker during your mortgage interview. Lenders will lend based on the lower of the purchase price or the valuation figure.

For example, you can buy a home for £200,000 however upon the valuation, the valuer confirmed the property to be worth £175,000 due to damp issues. If you proceeded with an 80% LTV product, the lender would only lend 80% of the £175,000 reducing how much the lender will lend. So keep this part of the transaction in mind as this can potentially impact the lending decision.

5. Mortgage offer

Once the lender has underwritten your application and the valuation is satisfactory, the lender will produce your mortgage offer, these are normally valid for 4-6 months as sometimes there can be delays within the chain of transactions i.e your seller isn’t ready to move as there’s delays with their onward purchase and other various factors.

If you’ve not had a chance to discuss mortgage protection, it would be a good idea to touch base with your adviser regarding this. Your prospective lender will have sent the mortgage offer to yourself, your solicitor, and your mortgage adviser. Ensure your solicitor has everything they need to carry out the conveyancing (the legal work necessary to transfer a property from one party to another) to make sure there is no delays. The lender will expect the solicitor to notify them of any potential issues with the title or complications with covenants and rights, a rare problem to have so don't stress too much!

The other thing to note is your property insurance. Commonly if you are buying leasehold property (usually a flat, rarely a house but still possible), you’ll be covered within a block insurance property the freeholder pays, this is normally paid for via your ground rent/service charge. However if you’re purchasing a freehold property, its good practice as per “Citizens Advice” to ensure the property is insured upon exchange of contracts.

6. Exchange of Contracts

Your solicitor will have carried out the necessary checks to ensure the bank is happy to take on property as collateral and the necessary paperwork to start the transfer of the property from the seller to yourself. Before this stage, you’re not legally bound to buy the property, however upon “Exchange of Contracts” you are legally bound to complete the transaction. At this point, you’d have your mortgage offered, conveyancing checks will have been complete and your solicitor will have discussed potential completion dates with the seller’s solicitors and yourself. You are also required to send your solicitor the deposit funds at this stage so make sure you are liaising with your solicitor to make sure there’s no hold ups.

7. Completion!

You’re now a homeowner! Your solicitor will have liaised with the seller’s solicitors to draw down the funds from the lender. At this point, you now own the property (Land Registry can take a bit of time to update) and your mortgage has officially started. Collect your keys and start moving in!

8. Protection!

Now you’re in your home, it’s time to stay there. If you’ve not discussed protecting your mortgage and your family with your adviser yet, call them as early as you can. Just remember there’s no obligation to take up the insurance and who knows, you might not need it; but most people don’t have hundreds of thousands of cash lying around to get your mortgage paid off. It’s always advisable to have a discussion with your adviser regarding protecting your mortgage, your adviser won’t be able to tell what your future has in store, but they’ll be able to help protect you and your family against a variety of unforeseen circumstances that could arise in the future.