These are the steps involved in the process of buying a house that 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 Robert Drury who will assess your circumstances, explain the different types of mortgages 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.
You will also need to get some understanding of the costs of buying a house.
2. Choose your home
Agree a purchase price with the estate agents or vendor. If the price is close to a stamp duty band threshold (see our costs of buying a house page) try and negotiate a price at or below the band limit. Do NOT put offers in writing without the help of a Solicitor – because 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, Robert 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, often around 3 weeks to obtain a mortgage offer from the lender. It can be quicker if the lender has efficient technology to process the application. During this time your broker is earning their 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. Therefore 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 ‘exchange of contracts’ is a formal legal process 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 could be sued for breach of contract. You or your broker will commence your life cover and buildings insurance cover because you are legally responsible for the property from this point.
The final legal aspects are completed by the Solicitor, and you will pay them their fee plus any stamp duty owed. 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. The Solicitor updates the Land Registry records to show you as the new owner. You may eventually receive the Title Deeds to your home for safekeeping.
Congratulations! You bought a house!