Taking out a mortgage and buying a home can be daunting. The steps below explain the mortgage and home buying process at a glance.
Step 1: Save
When looking to purchase a home, it is important to start saving for the deposit as soon as possible. Your deposit amount is dependent on whether or not you are a first-time buyer. Typically, a 90% limit will apply to the mortgage that a first-time buyer can take out. For non-first-time buyers, an 80% limit is generally applied to the mortgage.
Step 2: Budget
It is important for home buyers to determine how much they can afford to spend on mortgage repayments each month. Creating a budget that accounts for the running costs of owning a home will help in determining the mortgage amount you can afford.
Step 3: Research/Apply for Mortgage
Researching different lenders allows you to learn how much each lender is offering to loan out and their interest rates. To apply for a mortgage, you can either apply directly or use a broker. The overall cost of the mortgage with interest and the length of the mortgage are significant considerations that should be made.
Step 4: Hire a Solicitor
Solicitors will perform the conveyancing that needs to be completed during the home buying process. Conveyancing is essentially the transferring of ownership of the property from the seller to the buyer. Solicitors also help in ensuring that the sale is legal.
Step 5: House Hunting
After determining how much you can afford, you can now start looking at houses in and around your target location. Being aware of the property’s Building Energy Rating (BER) is also useful in understanding the energy efficiency of the home and the ongoing costs associated with running the home.
Step 6: Make an Offer
Before making an offer, it is beneficial to determine the highest amount you are willing to pay for a property. It is also important that you already have documents showing that you have a mortgage approval in principle and a bank statement with the funds necessary to pay the deposit when making an offer. Estate agents will look at you more favorably if you can prove that you are ready to buy.
Step 7: Sale Agreed
When the offer is accepted, a booking deposit will need to be paid to the estate agent. The estate agent will create a document of sales details that will be sent to the seller’s solicitor and your solicitor. This prompts the seller’s solicitor to send the contracts for the sale of the property and Title Deeds to your solicitor.
Step 8: Complete the Purchase
You can have a survey carried out to ensure that the house is structurally sound, especially if the property is older. You can also create a snag list outlining incomplete work or things that need to be fixed in the house. The next step is to get home insurance for the property. Once these steps are complete, you are ready to exchange contracts and move into your home.