These are the steps you need to consider when looking to buy a property in England or Wales. Slightly different arrangements apply in Scotland.
1. Check you can obtain a mortgage
The process of buying a house starts with a check to see that you qualify for a mortgage. See a mortgage broker such as Andy Wilson who will assess your circumstances, explain the different types of mortgage and how they work, suggest which might be the best for you and why, explain the setting up and monthly costs, and obtain an ‘agreement to lend in principle’ from a lender.
2. Choose your home
Agree a purchase price with the estate agents or vendor. If you are close to a stamp duty band (see our Costs of Buying A House page) threshold try and negotiate a price at or below the band limit. Do NOT put offers in writing without the help of a Solicitor – you may find yourself legally committed to buying the property even if your finances go wrong!
3. Choose a Solicitor
You will need a good conveyancing Solicitor. If you do not have one, Andy Wilson can make a recommendation of someone who you can trust. Expect to pay around £150-£300 for search fees to get the legal process started with the balance payable at completion of the property purchase.
4. Submit your mortgage application
Your mortgage broker will make the arrangements for you. Expect to pay a valuation or survey fee, and a mortgage broker fee. You will also need to consider life assurance, income protection and the buildings and contents insurances for your new home.
The mortgage application process takes a little time, usually around 3 weeks to obtain a mortgage offer from the lender. During this time your broker is earning his money; talking to lender call centres around the world, supplying the lender with information, keeping you up to date, obtaining valuation and survey results and pushing the lender for the mortgage offer to be issued
6. See the Solicitor
Once the mortgage offer has been issued the Solicitor will be close to completing the formalities. You will need to discuss the purchase contract, including any restrictions on the property, and then sign the contract. The Solicitor then holds this, pending step 7 below.
7. Exchange Contracts
Time to commit! Your Solicitor gives your signed contract to purchase to the sellers’ Solicitor and in return receives the sellers’ signed contract to sell. This is therefore the ‘exchange of contracts’ and includes the setting of a completion date. You will also need to pay at least 10% of your deposit at this point. This is non-refundable if you pull out, and you can be sued for breach of contract. Your life cover needs to commence along with the buildings insurance at least as you are legally responsible for the property from this point.
The Solicitors complete the final legal aspects. The balance of your deposit and the mortgage monies are handed over to the sellers through their Solicitors, and you receive the keys. The house is yours and the seller has to vacate. You will pay the balance of your legal fees and stamp duty. Your Solicitor records your new ownership at the Land Registry. You may receive the Title Deeds to your home for safekeeping.
Note: This Process of Buying a House only applies in England and Wales. Different arrangements apply in Scotland.