The Definitive First Time Buyer’s Guide
House-hunting, finding the dream property and becoming a first time buyer makes up possibly the most exciting time in a person’s life. Having ownership of a property, whether a flat, house or maisonette, is a truly exhilarating feeling. Along with the excitement, though, come plenty of formalities. The buying process can often be confusing, especially if you have no knowledge about it. For those who are unsure, don’t worry – we’re here to help and make it as simple as possible.
There are many components involved in buying a home, such as:
- Securing an offer on a property
- Sorting a mortgage
- Sourcing a property conveyancer
- Ensuring you have all the correct insurance policies in place
If you’re still not sure where to start, continue reading. We’ve covered everything you need to know to guide you through purchasing your first home.
What’s involved with mortgages?
If you’re in the situation of buying your first home, you’ve likely saved up a large deposit and this is the first requirement in the process. Generally, the larger the deposit, the better position you’ll find yourself in to get on the property ladder. The reason for this comes down to avoiding the need to borrow more, as well as having more access to varying mortgage rates.
Once you’ve saved that all-important deposit, you’ll reach the next exciting step in the process of moving home – getting your mortgage. This often requires doing some digging to find out how much money you can borrow from mortgage lenders. It’s ultimately down to you how you wish to proceed when finding this out. Many people choose to use a mortgage advisor but some do it themselves (there are things like mortgage calculators readily available to help you).
When head hunting for mortgages, it’s vital to note mortgage lenders will account for your outgoings, your salary (or salaries if you’re wanting shared ownership), as well as loans and your credit score.
Once you’ve determined how much you’re allowed to borrow, you can narrow down your property choices in terms of price. It’s important to ensure you have a mortgage in principle prior to viewing any properties, as this supports you in negotiations with the estate agents. If you need more advice on mortgages, it’s a good idea to find a mortgage advisor who you trust.
Not only do you need to account for your savings for your deposit, but there are additional fees to consider in the process too. Some of these fees are needed to go towards conveyancing solicitors, property searches, stamp duty (where applicable), home insurance and more.
Another important factor that comes with purchasing your first home is equity. Equity is essentially how much of the house you own in terms of value. When determining the equity on your property, note
it includes the deposit you pay towards it and the mortgage you’re paying off.
If in future you ever want to sell your first home and move elsewhere, it’s vital that you consider equity. One main reason for this is that it can determine how much money you have remaining to use towards purchasing your next home.
For example, if your balance on the mortgage is £75,000 and your home is worth £100,000, you’ll have £25,000 equity. If you manage to sell your home for what it’s worth, you’ll have £25,000 to use towards your next step, whether that’s moving to a new home or not.
What’s involved in the conveyancing process?
Whenever purchasing a property, conveyancing is a crucial step in the process. Once a buyer makes an offer and this is accepted by the seller, a conveyancer is instructed to carry out the accepted offer. A property conveyancer will carry out all the required paperwork and searches, along with liaising with the seller’s solicitors to outline the contract between the buyer and seller. Typically, this will detail the contents of a contract. For example, if the seller wants to leave anything extra behind in the property, it will be included.
A buyer’s conveyancing solicitors will carry out the necessary searches for them around their chosen property. The checks usually include things such as local authority and environmental/water searches. Local authority searches can reveal any issues with public rights of way and anything regarding the property in terms of purchase orders and enforcement notices.
Your chosen solicitor will raise any queries or concerns they have with the search reports on your behalf. For a solicitor, it’s paramount all the questions are raised as they follow a code of conduct, and must adhere to the mortgage lenders’ requirements. Otherwise, they can fall foul of negligence. In an instance where lots of issues are raised, the process can be delayed for a number of weeks, so it’s important to note this if you’re a first time buyer and you’re in a chain.
Once the above has been complete and a contract is outlined and signed by yourself, a request for the percentage of deposit comes next. The percentage will depend on the deposit you have agreed to, however, typically a minimum of 5 to 10% of the purchase price is required. Your chosen conveyancing solicitors will undertake this process and ensure it’s carried out securely. It’s entirely down to you which form you wish to pay, whether through bank transfer or by other means.
The exchanging of contracts is the final step in the conveyancing process when purchasing a property. Your solicitor will ask if you have a preferred date for moving into your new home, which then is agreed with the seller’s solicitor. If there are any further parties within the chain, they will also be notified. It’s important to not carry out any arrangements for moving house until a date is finalised with everyone involved.
With the moving date agreed, your solicitor will have a date lined up for the exchanging of contracts. Once this has been triggered, the contract exchange will work down the chain with the seller starting first (this applies only if your property you intend on buying is in a chain).
The Completion and Register Change of Ownership
At this point, you’re at the final stages of the process. The final completion statement from your solicitor will need sending off and the change of ownership with the Land Registry. Any outstanding fees now need paying, which can include Stamp Duty to third parties, as well as fees for the searches. With regards to the change of ownership, you can expect your solicitor to receive a signed deed from the seller’s solicitors which states the transfer of names. Your solicitor will send this to the Land Registry for registration.
If your new property is leasehold, your solicitor will notify the landlord that the lease is now assigned to you and the property will be yours!
Buying your first home is a truly wonderful experience, but it certainly involves some complex steps. We completely understand that the process can be overwhelming, and we are more than happy to guide you through it. If you need a trustworthy and transparent solicitor to carry out the conveyancing for your first buy, please contact us today to discuss your options.