Whether you are a first-time buyer or looking to move into your ‘forever’ home, moving house can be confusing, and sometimes you might not know where to start.
We have broken down the steps you need to take, and the order to take them in, to make your move as simple as possible.
Find a property you can afford
Before you start looking for what type of house you would like to buy, it is a good idea to find out how much you can afford to spend, and what the monthly mortgage repayments might look like.
Use an online mortgage calculator tool to input your salary and any debts or credit cards you might be paying off to work out how much you might be able to borrow. Online mortgage calculators can also help you work out how much the monthly repayments might look like, and how they will differ over different mortgage terms.
Credit report
Before you start applying for mortgages, check your credit score. A credit score shows your credit history, including the levels of debt repayment, and the number of accounts you have. Lenders will look at your credit score to indicate how likely you are to repay anything you borrow and check if anything is alarming.
If you have a low credit score, it might be worth spending a few months trying to improve it before applying for a mortgage, as you may be entitled to borrow more.
You can improve your credit score by ensuring you pay off debts on time, and avoid going into your overdraft and ‘maxing out’ credit cards.
You can check your credit score for free by using tools such as ClearScore or Experian.
Choosing the right mortgage
Finding the right mortgage deal for you is important to ensure you can afford to pay it now and in the future. Some lenders offer a fixed-rate mortgage which will help you to know how much you will pay each month for a fixed duration and can help with financial stability.
However, a variable rate or tracker mortgage can mean your monthly outgoings may drop when interest rates come down.
Another thing to consider is the length of the term. How long do you want to spend paying it off? Longer terms can mean that the monthly cost is lower, but in turn, you will be spending more on interest in the long run.
Website comparison sites can help you find a mortgage that is right for you. Meanwhile, a mortgage broker or Independent Financial Adviser can also help.
Once you’ve found a mortgage product you like, if accepted you’ll get a mortgage ‘in principle’.
This tells you how much money the lender is likely to offer and the interest rate you’ll pay.
Make an offer
Once you know how much you can borrow and how much it will cost you, you can go ahead and make an offer. Buying a property is usually done through an estate agent, and you only pay estate agent fees if you’re selling property.
Surveyor and Solicitors
When you have made an offer, it is important to consult a surveyor and solicitor to carry out the legal checks.
The surveyor will value the property and check for problems, which might affect the cost of the home.
Meanwhile, the solicitor or conveyancer will handle the legal work around the property. This includes the following:
- Handling contracts
- Giving legal advice
- Carrying out local council searches
- Dealing with the Land Registry, and
- Transferring the money to pay for your property
- Surveys
Surveys will help you determine any issues with the property before you exchange contracts.
- Valuation survey
Lenders carry out the valuation survey to ensure the property is worth the price you’re paying before they approve the mortgage.
- The property survey
There are a few different types of property surveys that can be carried out to determine any issues with the property. Depending on the type of the property should determine what type of survey you choose to have,
Surveys can help you avoid any hidden costs once you have moved in, or help you negotiate a lower asking price if you come across issues.
There are several types of surveys available:
- RICS condition report – basic ‘traffic light’ survey and the cheapest. It’s most suitable for new-build and conventional homes in good condition. No advice or valuation is provided in this survey.
- RICS homebuyer report – suitable for conventional properties in reasonable condition. This is a much more detailed survey, looking thoroughly inside and outside a property. It also includes a valuation.
- Building or structural survey – the most comprehensive survey and suitable for all residential properties. It’s particularly good for older homes or homes that might need repairs.
Finalise the offer and mortgage
Once the surveys have been completed, you might want to negotiate the price of your new home. This is because the survey might uncover problems that will be expensive to fix and you can use this information to ask for a reduction.
Meanwhile, you might need to negotiate the price if the lender values the property at a lower price, meaning you won’t be able to borrow as must as initially intended.
However, at this point, you can still pull out of purchasing the property if you don’t think the property is the right fit, or if you think it might cost you more than you can afford in the long run.
If you decide not to buy, you can pull out and cancel your mortgage application before you have exchanged contracts.
Exchange contracts
If you are happy to go ahead with the purchase, and there are no delays, then you should receive the contract to sign. However, you should go through the contract with your solicitor to ensure all details are correct before you sign.
Check that you are happy with what the sellers have agreed to leave in the property and that all your queries have been answered.
Once you and your solicitor or conveyancer are happy, you will be asked to pay the deposit, usually 5 or 10% of the purchase price, and contracts can then be exchanged.
At this stage, you and the seller are committed to the transaction.
Once you’ve exchanged contracts, you’ll need building insurance in place to cover the structure of the property.
Completion and final steps
Completion is the date when you can finally move into your new property. We have broken down what happens during and after you move.
The estate agent is likely to hold the keys for you to pick up.
- On completion day, your solicitor will arrange for money to be transferred to the seller’s solicitor.
- Ideally, all the buyers and sellers in the chain complete on the same day, otherwise you might have to wait for the seller to have completed buying their new home before you can move in.
- If you have a share of freehold, your solicitor or conveyancer will be able to assist you in the necessary steps for having this registered either at the Land Registry, or Companies house, as appropriate.
- Your solicitor will register the transfer of ownership with the Land Registry for properties in England and Wales. In Northern Ireland, it needs to be registered with Land and Property Services.
- Sellers will need to pay their estate agent on completion. The fee is agreed at the outset and is typically a percentage of the sale price, usually 1% to 3% plus 20% VAT. Buyers don’t have any estate agent fees.
- Buyers of residential homes have 14 days from the completion date to file the Stamp Duty Land Tax Return and pay any tax due in England and Northern Ireland. Your solicitor will usually arrange this for you. In Wales, you will need to pay Land Transaction Tax.
Further reading
Purchases – Oakwood Property Solicitors
WHAT TO DO NEXT
To make a start on the next step in your property journey, get in touch today to book a consultation with a member of our team. Call us on 0113 218 5727 to find out how we can help you.
