How to buy a House
Do you find yourself wondering how to buy a house?! Putting aside the obvious fact that you need money to do so. The actual process of what needs to be done and when is often overlooked by most. Particularly by some estate agent involved, sometimes by solicitors also. it can leave you frustrated, confused and a little intimidated even. I often find that first time buyers are usually the buyer type effected by this situation.
We’re going to take a look at the buying process of your typical first time home buyer. This would be someone buying with a mortgage and a cash deposit and just starting out on the property ladder.
Here is a basic list of steps when buying a home. Along with a rough guide on timeframe as to when they have to be done or when they are due.
Checklist for buying a house
- Secure you agreement in principle from a lender and ensure your deposit is in place.
- Find a house! View, offer and agree!
- Day 1 – Provide your financial info to the agent.
- Day 2 to 3 – Arrange to apply for your mortgage and instruct a solicitor.
- Day 4 to 10 – Ensure mortgage application is submitted and paperwork back to solicitors. Pay for searches.
- End of Wk 2 – Check that you mortgage valuation survey has taken place or at least has been booked. Book you own home buyers survey.
- Wk 3 – Check your survey, raise any questions if need be.
- Wk 4 to 5 – Check for your mortgage offer from the lender. Liaise with your solicitor on searches that have been returned and enquiries that are being raised with the sellers side.
- Wk 5 to 8 – Answer to enquiries settled. Your solicitor liaises with your lender to confirm all ok. Your solicitor reports to you and discusses dates with you and the sellers side.
- Wk 8 – Dates are set for exchange and completion of contracts. You sign contracts in readiness, your solicitor will hold your deposit and arrange transfer of the mortgage monies from the lender.
- Wk 9 to 10 – Exchange takes place making the transaction legally binding. Completion usually afterwards. The agent selling the house will make keys available upon the day of completion!
Preparation
Firstly, you have decided to buy a house! So congratulations! You have looked into to a mortgage, know what level of deposit you need and have saved. When you start looking make sure you have a recent decision in principle with a mortgage lender in place. This will aid you in getting an offer agreed quickly. It also means you have gone through a basic level of background checking ( a light credit check) with a lender.
Make sure you don’t spend that deposit money or make any ‘out of the ordinary’ financial commitments, as it will effect the lenders view of your ability to pay for a mortgage.
Agree your budget, what you limits you set, the type of house you would like, the location you think would suit and get on google, Rightmove, Zoopla and agents websites and start looking! Remember to consider costs such as stamp duty (if applicable) and solicitor costs when setting budgets.
You have found a house to buy
Great News! You have found the one, made an offer and negotiated with the sellers, keeping within budget! Your offer has been accepted. So what next?
If there is an Estate Agent involved, you will be asked to evidence your ability to buy. As a first time buyer you would do this by providing the agent your agreement in principle from your mortgage lender (and/or putting your financial advisor in touch with the agent). You would also need show them your bank account where your deposit is being held, or put them in touch with the party supplying you a deposit i.e. parents of family – we call this a gifted deposit.
Once the agents have seen this they will formally accept you offer and reserve the property from the market for you (in most cases).
The the fun begins!
First steps
So, our next steps on the How to Buy a House journey are to start your financial purchase of the home moving and also employ a solicitor. A solicitor will handle the legal matter of buying a home. They will look after your interests and ensure what you are buying conforms to expectations and you and your mortgage lender are not put at risk.
The mortgage application process and the Solicitors legal enquiries run side by side from the start of your property purchase. So the two parts of this initial process is split below :-
Part 1 –
Upon offer being accepted contact your lender or financial advisor and inform them that you wish to proceed to apply for your mortgage. You will fill out paperwork, supply identification and the lender will process the paperwork. They will perform quite firm background checks, credit reports and analysis of your spending habits.
Once they are happy they will need to value the property you are buying, and will contact the agent you are buying through to arrange a mortgage valuation. Once they are happy with the figure agreed, they will ultimately produce a mortgage offer.
This process can take a few weeks but the application part is the but you need to do quickly at the beginning.
Part 2 –
Instructing a solicitor. At the same time that you apply for your mortgage, you will need to instruct a solicitor. This needs to be done within the first few days upon agreeing to buy a house. Get quotes, read reviews and shop around. Bare in mind the cheapest offering is not always the best, particularly when it involves houses.
Once you have selected a solicitor, they will send you lots of paperwork to fill out and return and will need to verify your identification. The legal process can take 8 to 12 weeks on average, so the sooner you get things moving the better.
You will have to make a financial commitment when buying. You will have to pay for searches. The solicitors use this money to investigate the land and area you are buying in. This is done to ensure you own the land, that there is sewerage disposal connected and many other things that you wouldn’t normally think of or take for granted.
Your solicitor will also ask for a draft contract of sale from the sellers side. This is a vital bit of paperwork that the whole transaction will be based on (ironically a single bit of paper….).
So, once you have applied for you mortgage and instructed you solicitor, returned paperwork and paid fees for surveys and searches (yes there are expenses early on!). You are well on your way.
Last steps
Move forward a few weeks. You application for your mortgage has gone through. A survey has been completed and a mortgage offer has been issued to you and your solicitor.
At the same time, your solicitor has been very busy asking lots of questions of the sellers solicitors about the house you want to buy. These are called enquires and are based on the searches and various bits about the house – extensions, solar panels, boundary lines etc. One side fires a lot of questions to the other, then waits for a reply. Sometimes the answers are not good enough, so we go again. This whole process can take a few weeks.
All signed off
So, your solicitor is happy. They have answers to all questions. Have checked out the house and land thoroughly. They have your mortgage offer from the lender and they have also reported to them to say all is good. They will contact you to review the file and if you are happy, ask you for dates for when you would like to move.
Another conversation takes place between solicitors, agents and sellers to agree upon the best date for all. When agreed, it’s set in the contract of sale, this is referred to as the completion date.
Then, an exchange date is agreed. In most cases, and exchange of contracts happens days before the completion. This is to enable the solicitors to legally bind buyer and seller to together, then allow the mortgage lender time to transfer funds (its a lot of money usually). upon exchange your solicitor will ask for your deposit monies to be transferred to them.
Remember, if you exchange, you are legally obliged to complete the purchase of the house. Pulling out could incur serous expense on your part and result in you being sued by the selling side.
You have a new home!
Exchange happens and every sighs with relief! The day of completion happens, your money from the mortgage lender lands in your solicitors account, who then forwards it to the sellers solicitor. Upon receipt they confirm completion, you get a call and you can pick up you keys!
Whilst there is still a bit to do for the solicitors, all you have to do is concentrate on moving in and enjoying.
How to buy a house!
We hope that has helped a touch. it can be a daunting time but it isn’t that scary. We are here to help and advise so if you are looking to buy a home in Daventry, Rugby or in between, even if it isn’t with us, we will always help where we can. More importantly, let us know if you are looking. We can help with finding a house, looking into mortgages and advise on the best solicitors to speak to.
Call David Bruckert at Skilton & Hogg Estate Agents Daventry & Rugby on 01327 624275 or 07738 803948. You can email on info@skiltonandhogghomes.co.uk also.
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Good luck!!
