Buying your first home can be a daunting experience, and so Warren & Co aim to help make your house buying process as smooth as possible.
We will find the most suitable deals for your circumstances and explain your options in a clear and concise manner.
Obtaining a Deposit
There is no set amount that you need to have saved up before you can get a mortgage. However, the larger the deposit is, the more competitive the mortgage rate will be. Generally a 25% deposit is a good amount to aim for, however there are other options if you are unable to find this sum. Things worth considering are the shared ownership and shared equity schemes, or a gifted deposit from a family member.
You will also need to remember the other costs associated with buying a home. You will need to account for solicitor’s fees, stamp duty, survey costs and the cost of furnishing your home once you have moved in.
The government has recently introduced the Help To Buy ISA whereby the government contributes a bonus of £50 for every £200 you save. This is limited to a maximum bonus of £3,000 on £12,000 worth of savings, however two people buying together can each open their own accounts and receive their own bonus of £3,000 each.
Agreement in Principle
When you are looking for a property, the first thing you will need is an Agreement in Principle. This is where a lender takes your basic information and gives you a figure of how much you could borrow based on your current circumstances. Most estate agents will ask for an agreement in principle when you want to put in an offer on a property. As an agreement in principle requires a credit check to be carried out, it is very important that you seek advice beforehand to avoid unnecessary “hard” credit footprints on your file.
Once you have had an offer accepted on a property you can then proceed to the full mortgage application. This is where the lender takes a more detailed look at the information you provided in the agreement in principle. They will ask for supporting paperwork to prove your identity, income and outgoings. Generally you will need to provide the lender with ID, proof of address, payslips and bank statements. The lender will then carry out a valuation, and once they ate satisfied with all of the paperwork, your application will receive a mortgage offer.
As part of the mortgage application, the lender will carry out a valuation of the property to make sure that is suitable security for the mortgage. A basic mortgage valuation will tell the lender the basic sale price of the property and will only highlight significant issues with the property. You could choose to upgrade your survey to either a HomeBuyers Report or Building Survey which give more detailed overviews of the property. A HomeBuyers Report is the most common type of survey and gives advice on any defects and repairs or maintenance. A Building Survey is particularly useful for older or heavily altered properties. It is more comprehensive and gives a full breakdown of the structure and condition of the property.
Exchange and Completion
Once the solicitors have received their copy of the mortgage offer they will begin the legal work involved in the purchase of your property. Until the contracts have been exchanged, the buyer or seller can pull out without incurring any serious costs. After the contracts have been exchanged you are legally bound to purchase the property. Exchange and completion usually happen several days apart, however they can be carried out simultaneously. Completion is where the money changes hands through the solicitors, and is when you can finally get the keys to your new home. Once you have completed, the property becomes yours and you can move in.