Insights and tips designed to make your property purchase smoother and more manageable
Buying a home is one of the most significant financial decisions you’ll make in your life. This process combines excitement with challenges, often requiring careful planning and informed decision-making. Whether you’re a first-time buyer or moving up the property ladder, understanding each stage is crucial to ensure everything proceeds smoothly.
From establishing your deposit fund to receiving your keys on completion day, this comprehensive guide provides step-by-step insights and practical tips aimed at making your home-buying experience smooth and enjoyable.
Saving for your deposit
Your deposit is the foundation for your property purchase, and the amount you save can affect the mortgage deals available to you.
- Aim for a deposit of at least 5% of your property’s price, although 10% or more can secure better mortgage rates.
- If applicable, consider opening a Lifetime ISA (LISA) to boost your savings by 25%, with contributions up to £4,000 a year.
- Set a monthly savings goal and use financial tools like budgeting apps to monitor progress.
- If family or friends are providing support, agree on clear terms to avoid miscommunication.
- Partnering with a friend or partner to buy could increase borrowing potential, but consult a solicitor to formalise agreements.
A larger deposit often leads to reduced monthly mortgage payments, so prioritise saving wherever possible.
Exploring government schemes and financial options
Navigating various home-buying schemes can help make the process more accessible.
- Investigate schemes like Shared Ownership, where you buy a portion of a property and rent the remainder.
- If you’re a first-time buyer, you might be able to purchase a home for 30% to 50% below its market value. The home must be your primary residence. This offer, known as the First Homes Scheme and is available only in England.
- Use online mortgage calculators to get an idea of how much you can afford based on your salary and monthly expenses.
- Check if you qualify for special lender schemes tailored to first-time buyers.
Understanding your financial standing will ensure you know exactly what you can afford before starting your search.
Getting a mortgage broker
A mortgage broker is a valuable ally, especially in more complex situations.
- Consult a broker if you’re self-employed, have a fluctuating income, or are concerned about bad credit.
- Use their expertise to explore trusted lenders and compare mortgage options.
- Set aside funds for additional purchasing costs like legal fees, stamp duty, and surveys, which can add up to 15% of your budget.
If you’re worried about navigating the mortgage process alone, an experienced broker can provide much-needed clarity and support.
Securing a Mortgage in Principle
A Mortgage in Principle (MIP) is sometimes also known as an ‘Agreement in Principle (AIP)’, a ‘Decision in Principle’ or a ‘mortgage promise’. It indicates how much a lender is willing to lend based on your financial circumstances.
- Apply for an MIP early as proof of financial preparation; it strengthens your position as a serious buyer.
- Be aware that your final mortgage offer may differ slightly from the MIP amount, depending on property valuation.
- Keep this document ready for when you start negotiations with sellers.
An MIP is not an official offer but demonstrates your readiness to proceed to the next step.
Searching for the right property
Finding the perfect home takes time, patience, and smart decision-making.
- Make a list of your priorities, including location, number of bedrooms, outdoor space, and proximity to amenities.
- Communicate your requirements to local estate agents and sign up for listing alerts online.
- Attend multiple viewings and compare property prices within the area.
- Check whether the property is freehold or leasehold, as leasehold homes come with additional costs like ground rent.
- Visit at different times of day to gauge traffic, noise, and activity levels in the neighbourhood.
Keeping a record of properties you visit helps you evaluate your options before making an offer.
Making an offer
When you’ve found a property you love, submitting a competitive and strategic offer is key.
- Research recent sale prices in the area to understand market conditions.
- Decide your maximum budget and be prepared to negotiate with the seller.
- Make your first offer slightly below the asking price to allow for negotiation.
- Highlight your position as a first-time buyer or cash buyer in your offer to improve its attractiveness.
- For sealed bids, seek advice from your estate agent and weigh risks carefully.
Stay calm during negotiations, but be ready to move on if the price exceeds your agreed budget.
Navigating gazumping and gazanging
Even after an offer is accepted, the unpredictable nature of the property market can pose challenges.
- Gazumping occurs when a seller accepts a higher offer from another buyer after agreeing with you.
- Gazanging happens when a seller withdraws their property entirely, leaving you without recourse.
- Invest in Home Buyers Protection Insurance to cover survey, legal, and other costs if the purchase falls through.
- Keep open communication with the seller and estate agent to ensure transparency during the process.
Though frustrating, these risks can be mitigated with due diligence and planning.
Applying for a mortgage
Once your offer is accepted, you’ll need to formally apply for your mortgage.
- Submit required documentation promptly, including proof of income and bank statements.
- Be aware of the possibility of a down valuation, where the lender values the property lower than the agreed price.
- Aim to settle additional arrangements like life insurance to protect your financial investment.
Your lender’s valuation will determine the final loan offered, so ensure everything is accurate and aligns with your budget.
Appointing a conveyancing solicitor
Handling the legal elements of your purchase requires a reliable solicitor or licensed conveyancer.
- Choose a professional with solid client reviews and transparent fees.
- Respond promptly to requests for paperwork to avoid unnecessary delays.
- Expect searches, like Local Authority Searches, which may highlight potential issues like planning permissions or flood risks.
Your solicitor ensures all the legal bases are covered for a smooth exchange of contracts.
Getting a property survey
Though not compulsory, a thorough survey can save you significant stress and money.
- Opt for a homebuyer survey or building survey depending on the property’s age and condition.
- Use survey findings to renegotiate the price or request repairs from the seller.
- Remember that mortgage valuations aren’t as detailed as independent surveys.
A property survey provides peace of mind by uncovering hidden defects before purchase.
Exchanging contracts and preparing for completion
Exchanging contracts legally binds both parties to the sale, paving the way for completion.
- Expect to pay your deposit, usually around 10% of the purchase price, at this stage.
- Arrange buildings insurance, as you’re now responsible for the property.
- Finalise the completion date, typically set within 2–4 weeks of exchanging contracts.
This stage ensures that all paperwork and finances are in order, leading you to ownership.
Completion day and moving into your new home
Completion day marks the end of your home-buying process and the beginning of a new chapter.
- Transfer the remaining balance, and your solicitor will register the property under your name.
- Collect your keys and ensure utilities like water, gas, and broadband are set up in advance.
- Settle the solicitor’s remaining fees and update documents like your driver’s licence or insurance.
Congratulations! You’re now the proud owner of a new home.
Feeling confident about the process
While purchasing a home can feel daunting, preparation and the right support will make it manageable and rewarding. Take each step at a pace that works for you, seek professional advice when needed, and remember that this process brings you closer to your dream home.
Buying a property is an achievement worth celebrating, so take pride in your planning and efforts. If you’re ready to begin, start today with confidence and excitement for the future ahead.
Looking for expert help for your journey?
For assistance or personalised advice on finding the perfect mortgage option and purchasing your first or next home, feel free to contact our experienced team. Having the right team by your side will make all the difference. Happy house hunting! Contact Fitch & Fitch at 020 7859 4098 or email info@fitchandfitch.co.uk for more information.