Buying a home, especially for the first time, can be an especially daunting stage in your life. This only compounded by how many hoops you have to jump through to prove to lenders you are worthy of their credit. To begin with, it’s always worth finding out your credit score and whether there are any red flags you need to rectify before approaching a lender.
Once you’ve got the green light on your credit report, follows these steps to ensure your purchase goes as smoothly as possible.
1. Save for a deposit: most lenders will accept a deposit of no less than 10%. If you have a less than perfect credit history, or are a first-time buyer, you may find a larger deposit is required.
2. Find out how much mortgage you can borrow. This will depend on your income, savings and size of deposit. Most banks have a mortgage calculator tool on their website to help you estimate what you can afford.
3. Apply for a mortgage agreement in principle (AIP): this is a confirmation from a lender that they would, in principle, be willing to lend you a certain amount. It can make you a more attractive buyer, as it shows the seller you can afford the property. The AIP doesn’t have to come from your bank or building society. An independent mortgage broker can help you apply.
4. Start house-hunting! There are a number of places you can go to find out what properties are on the market such as Rightmove, or checking out the local estate agents. You may also want to find out about any local property auctions as you can find some great bargains.
5. View properties in person: it’s vital that you don’t purely judge properties on their online listings. Get out and about to get a true sense of what you want. Don’t feel pressured into making an offer until you’re sure the property ticks all of your essential boxes.
6. Make an offer: work out how much to offer based on recent selling prices for similar homes in the same neighbourhood and whether you’ll need to carry out repairs to the property. Make your offer to the estate agent, who will pass it on to the seller.
7. Apply for a mortgage: a whole of-market mortgage broker can recommend the best lenders and deal for you and help you apply.
8. Find someone to do the legal work: you’ll need to appoint a conveyancer or property solicitor – ask friends or look online for recommendations, and don’t make your choice based on price alone.
9. Get a property survey: hire a Rics-accredited or RPSA surveyor to check for serious structural problems before you buy the property. If it unearths problems, you might want to ask the seller to fix them or reduce your offer.
10. Hire a removals company: get at least three quotes.
11. Arrange home insurance: you’ll need buildings insurance in place from the day you exchange.
12. Exchange contracts: your and the seller’s solicitors will swap signed contracts and you’ll pay the deposit.
13. Complete: your mortgage and deposit will be transferred to the seller and then you can collect your new house keys from.