You may have noticed that we bought a house recently (I may have mentioned it once or twice…). This was our first property purchase, and I have to say I was pretty clueless about buying a house. There’s not a huge amount of information out there about the process, and the things I did find were quite vague and didn’t really give a great deal of detail. So I thought I would write a (hopefully) easy to follow, step by step guide of how to buy a house!
1) Find a mortgage broker
Before you starting looking at houses, you need to know how much you can afford in order to know what your budget is. Find yourself a mortgage broker – and even better if they’re independent and can search the “whole market”. You might find if you use a mortgage broker who is based with an estate agent, they can only access certain details (this isn’t true for all though). We were recommended a broker who several friends had used who could search the whole market for us. We had to give detailed financial information – how much we earned, if we did any overtime or had extra income, if we had any assets and what our outgoings were. We had to list everything from bills, food and childcare to train fares, gym memberships and how often we went to the pub! We were then given an idea of what we would be able to borrow and how much our mortgage repayments would be.
Sometimes your broker will have a fee (ours typically charged £495) and sometimes they will take their commission from your mortgage provider (this is what ours did so we didn’t need to pay).
2) Get your Decision In Principle (DIP)
Once you’ve worked our what you can afford, and decided on the best mortgage for you, your broker will apply for a decision in principle. This is basically a form that says the mortgage provider thinks you are eligible for a mortgage. This doesn’t guarantee you will be approved, however, it’s a pretty good indication.
We were pretty limited in our options for a mortgage provider due to our low deposit and our high childcare fees, but we were given our DIP so we were ready to go!
3) Start looking for houses!
This is the fun part! If you’re anything like me, you will have been hunting the apps like Rightmove and Zoopla for
years months and will have probably been looking at houses that are completely over budget! Once you’ve had some fun, start to narrow down your search by things you need and then things you want. We knew we needed three bedrooms and a garden. We wanted a kitchen/diner and large bathroom. Once we started looking properly online, we knew we had to widen our search area to afford what we wanted.
We actually only visited one house. It was in our price range, ticked the boxes of three (decent sized) bedrooms and a (large) garden. It had a lounge/diner and a small kitchen, but did have a big bathroom. There was also a garage which gave us scope to extend the kitchen into if we wanted to. It was below our budget and we knew it was perfect for us as soon as we saw it.
4) Put in your offer!
Once you have found your dream house, make sure you have a coupe of viewings. The first time you see a house, you’ll just be looking at if you like, if it ticks your boxes and if you can see yourself living there. You should definitely go back for a second viewing to scrutinise it a bit more. Take someone else if you can, maybe your parents, or friends, who can be more impartial and point out any issues there might be with the property.
When you’ve decided the house is for you, put in your offer! Most people will go in lower than the asking price, but this will all depend on if there are other people interested (although the estate agent will likely tell you someone is!), what the market’s like, if there have been other offers, and if you are in a chain or not.
We were in a pretty good position in that we were first time buyers, the house had been on the market for a few months, and we weren’t in a rush to move. We went in really low, which was quickly rejected, but we slowly increased our offer and managed to knock £5k off the asking price. This wasn’t a huge amount, but it meant it was under budget for us which is always a bonus!
5) Your offer is accepted!
Yay! You’re one step closer to owning a house!
6) Start for a search for a solicitor
Now you can start the search for a solicitor. Ask for recommendations and get quotes from local firms. Some mortgage providers will have a list of approved firms that you will have to choose from. When considering quotes, get a breakdown of what it includes, and check the small print for any possible hidden extras.
We used a firm that a family member had recently used. We were using the Help To Buy ISA scheme, so I made sure they had experience with this. Their quote was similar to others I received so we decided to go with the recommendation.
If your vendors need to find somewhere, you may find yourself in for a bit of a wait. It took 3 weeks for our vendors to find a house but then their vendors needed to find a house and complete the chain. This took a lot of patience but I spent my time on Pinterest dream decorating our new house! By the end of the 5 weeks, I’d designed a whole garage conversion and 2 storey extension on the back of the house (now just to win the lottery to pay for it…)
6) Apply for a mortgage
Now you have a complete chain, you can process your mortgage application. You will probably meet your broker in person if you haven’t already to sign forms and go through the process. They will then apply for your mortgage. Now you just have to wait!
7) Help to Buy ISA
As first time buyers, Craig and I both have a Help to Buy ISA. This has been a great way of saving, as we will gain a 25% bonus on top of everything we have saved, up to a max of £3000. As we are both first time buyers, we both get an account. You can only save £200 a month, so not all our savings were going in the ISA, but it’s still been a great way to add that extra bit of money to our house fund. You can’t use it as part of your deposit, as the money is only released on completion but you are able to use it to pay your stamp duty and other fees.
To start the process, our solicitors sent us a form to fill in with the details of our account and the house we were purchasing, and a current statement to show how much money was in the account. We then had to send them another statement once we closed the account. We closed the account just before exchange and the money was applied for shortly afterwards. The money came in after we completed and our solicitors applied it to our final bill.
8) The valuation report
Our lenders instructed a surveyor to inspect the house. There are 3 main types of survey you can chose – basic, homebuyers report, full structural survey. We opted for the middle range one and went for a homebuyers report. This is a bit more detailed, but not a full structural survey. The house was built in 1965 so was reasonably new, so we didn’t expect anything awful to come back. The report took a week to come back and had a “traffic light” system. Everything was marked red, amber and green – red means urgent attention, amber means needs attention soon and green means good. We were very pleased with our survey, it flagged up things we already knew about, but also instructed us to have the gas/boiler/electrics checked.
9) Mortgage offer
After a very tense 2 weeks, we were given our mortgage offer! This came through 2 days after the survey, and I was so, so relieved! I don’t know why I was worrying so much, I was just convinced they weren’t going to give us a mortgage! Our broker let us know the good news and then we received our letter to confirm a few days later.
10) Paperwork…lots of paperwork!
You will find you receive a LOT of paperwork through the post from your solicitors! First we were sent something called the holding letter. This is a questionnaire sent to the vendors with a load of questions about the house. Our solicitors then made some enquires based on their answers and asked them to confirm a number of things (eg the boundaries of the property). You will also receive a mortgage deed that you need to check and sign and send back ready for exchange of contracts. We also received the list of fixtures and fittings that will come with the property. Make sure you check this and that when you move in, all the things they say are staying, are there! Our vendors were a bit cheeky – they said they were leaving all the light fittings, which they did, but not the ones that were there when we viewed the house! They fitted cheap fitting thatwere actually hanging off the ceiling in most rooms and looked awful. This was pretty annoying, especially when we discovered all the other “bodged” items in the house!!
Your solicitor will conduct a number of searches for you. I’ll admit, I don’t really know what these are for! But you must wait for these to come back. Your solicitor will tell you if there are any issues. We had to wait for further confirmation from the vendors with regards to building regulations that came up on the local authority search.
12) Wait a bit longer
Then you just have to wait a bit. Honestly, I don’t really know what we are waiting for. I know the enquiries toom a while to come back from the sellers, but our solicitors didn’t really keep us updated with what was happening so we were in the dark for much of the time. It wasn’t too stressful, just very frustrating. The waiting continued…
13) Signing of the contracts
Everyone has sent back all the relevant paperwork, your solicitor has gone through it and drawn up the contracts, so now you have to sign them ready to exchange. At this point you will have had all the searches completed, any relevant certificates that you were waiting for (we needed up to date gas and electric certificates, as well as paperwork for the newly fitted windows) and confirmation of the boundary line from the land registry (we had a query about access to an alleyway behind our house which caused a bit of confusion).
Once the contract was drawn up, it was sent to us to read through and sign, along with a land registry transfer form and all the relevant searches to read through. Some of these we had to have witnessed too. We then sent out deposit money over so our solicitors had it ready for exchange.
14) Exchange of contracts
We then returned all these documents to our solicitors (we did it by hand as we were in the area, but we could have posted them). A completion date was agreed (unfortunately it wasn’t as quick as we wanted, but at least we had a date!) and then contracts were exchanged. You should now organise your buildings insurance, as you are liable for any damage on the house. Our solicitors asked for proof of this before we completed.
15) Arrange your move
Now we had a date, we could start packing and arranging the logistics of our move. We looked at hiring a van and doing it ourselves, but when we worked out the cost, plus having to ask family and friends to help out, we decided instead to hire “a man with a van”. For £200, he would provide the van and himself plus a helper to move all our belongings from one house to the other, and would be avaliable for as long as it took, all under one price. We thought this was a fab deal, so booked in the date. Then I realised I should probably start packing (something I do NOT like doing!) It did give me the chance to have a good old clear out and get rid of or sell unwanted or unused items. I didn’t want to just transport a load of crap from house to another! I’m a bit of a hoarder, so this was quite tough to do, but I was ruthless and managed to clear out a bit of space (although if you ask my husband, I probably wasn’t as ruthless as I could have been!)
16) Wait a bit longer…
If you’re like us and have a long wait between exchange and completion, then it can be a bit frustrating as there’s not much you can do whilst you wait for those keys. Well, you could be sensible and start packing, or you could leave it to the week before, like we did….
Ok, so we (or rather, I) did actually do a lot in between exchange and completion, for which I will be doing another post – but basically it’s sorting utilities, notifying the correct people etc etc. You also need to arrange your buildings insurance as soon as you complete, as the building is now your responsibility!
You will have your completion date, so on the day you just have to sit and wait for that phone call to say the process is complete! I got the phone call from the solicitors at 10am, but I was driving so missed the call! But was very excited to hear it had all gone ahead as I just had an awful feeling something was going to happen. Then we got the call from the estate agents at about 11.30 to say we could go and collect the keys.
18) Moving day
We were fortunate that as first time buyers, we didn’t have to move out one house and into another on the same day. Once we collected the keys, we went to see the house, made sure it was clear and in order, and ready for us to move in. We decided to move in the following day so we weren’t stressing and waiting around as we obviously didn’t know what time we’d be able to collect the keys to the house.
So that’s it! 18 easy and stress free steps to buying a house. The whole process took us 6 months, which was a lot longer than we expected but according to friends who habe been through the process, it’s a pretty average timescale, especially with the size of our chain. But we did it and we’re now proud home owners.
There really is no better feeling 🙂
Linking up with the fabulous: