We have just accepted our offer on what we hope will become our first home.
The family we bought it from is moving into a rented house while they look for their next place, so there is no chain.
We’re excited, but also a little confused about what steps we should take next and in what order.
When is the right time to process the mortgage, find a lawyer and carry out studies?
When do we actually transfer our money for deposit and when do we pay the solicitors and our stamp duty bill?
And how and when do we decide the date we will move?
On the ladder: Buying your first home is probably the biggest purchase you’ll ever make
Harvey Dorset of This is Money, responds: Congratulations. Buying your first home is a big step and it can be easy to feel overwhelmed by the obstacles you need to overcome.
First things first: It’s time to apply for a mortgage, if you haven’t already, and hire a lawyer. As you’ll see below, there’s no hard and fast rule about what you should do first. However, informing a lawyer before receiving a mortgage offer can give your case some weight.
You will probably have to pay an escrow fee to your solicitor and the remainder will need to be paid at checkout.
When applying for a mortgage, your life can be easier if you have already agreed on a mortgage in principle.
Finding an independent mortgage broker can also be a good decision. They will be able to show you mortgages from a range of lenders and advise you on your options, and may have access to deals not available on the high street.
As soon as your mortgage application has been approved, you will be able to book your surveys. Please note that this may take time, especially during busy periods.
Getting a home survey done is not a legal requirement in the UK, but it is highly recommended because you may be able to renegotiate the price you are paying if repairs need to be made. If the house is in very bad shape, you may decide not to go ahead with the purchase after all.
Once the studies are completed, your lawyer can begin the legal work to transfer the property into your name and move towards the exchange of contracts. This is when you pay the deposit.
The move-in date will be finalized once you have agreed on a completion date with the seller. This is when all legal documents are signed and funds are transferred.
We asked two real estate experts to explain the purchasing process in more detail.
Renegotiate: Angela Kerr advises conducting a survey to address any issues that arise
Angela Kerr, director of real estate advice website HomeOwners Alliance, responds: I’m very excited for you too. However, since buying a home is expensive and things can go wrong, let’s hope for the best and plan for the worst.
About 30 percent of arranged sales fail, so we always recommend starting with homebuyer protection insurance.
It will cover your transfer, mortgage and appraisal costs if the worst happens.
Next, contact your conveyancing solicitor. Don’t just go for the one suggested by the real estate agent. Instead, shop around to ensure you get the best price and service.
Start by instructing them to conduct searches by local authorities. It is important to do this as soon as possible, as despite the government’s target of returning them within 10 days, most councils take around 30 days.
Now that your offer is accepted, you will also need to complete a full mortgage application for the exact amount you need to borrow for your home. Do this without delay.
If you have a mortgage advisor, they can guide you through the process. Be sure to respond promptly with all the correct details to avoid delays. Processing a mortgage application typically takes two to four weeks.
As part of this process, the mortgage lender will want to conduct a mortgage valuation study on the property.
These surveys are usually conducted online and are for the lender’s benefit, not yours. You are unlikely to see his report.
Therefore, in addition to this, we recommend carrying out an expert study of the condition of the home for your own peace of mind.
While a survey is not mandatory, it is a good investment to help you understand any current or future problems your property may have.
If your survey report uncovers problems, you can use it to renegotiate the price before you make the trade. Or get the seller to agree to fix the problem.
Booking a survey in advance also shows that you are a serious buyer.
As for the deposit, talk to your attorney about how to handle it. They will help you make arrangements to transfer the deposit (traditionally 10 percent of the purchase price, but it can vary) to your account so that it is settled in time for the exchange of contracts.
Before exchanging contracts, you must agree on an end date with the seller. This is the day you receive the key and move in, often two to four weeks after exchange on a mutually agreed upon date. Your lawyer can propose a date if you have one in mind, and without a chain there should be no problem.
Once completed, your solicitor will finalize the final stages of the conveyancing process. This includes paying stamp duty on your behalf if necessary, although first-time buyers are exempt on properties up to £425,000.
They will also register the property in your name at the Land Registry and then issue you an invoice for your payment.
Legally binding: Matt Smith warns that once you exchange contracts, you will lose your deposit if you withdraw
Matt Smith, Mortgage Expert at Rightmove, answers: First of all, congratulations on buying your first home.
Ideally, you should have had a mortgage in the first place before submitting an offer. This is a document from a lender that tells you what you could borrow based on the information you share.
However, since you’ve already submitted your offer and it’s been accepted, the next step is definitely getting approved for a mortgage.
There are a few ways to do this, but most people choose to use an independent mortgage broker, who can look at all the different mortgage products on the market and help you find the right one for you.
Once you have started the mortgage process, it is time to find a solicitor or conveyancer as they are known.
There will come a point when applying for a mortgage when you will need to tell your lender your solicitor’s details. By then, you’ll need to have given one instructions.
There are two types of surveys to consider during the purchasing process. When you are reviewing your mortgage application, your lender will conduct a valuation of the property you want to purchase.
This is to check that the property meets your requirements and that they are happy to lend you the money to purchase it. Once the lender has received the valuation report and completed the underwriting checks, they will be in a position to issue a mortgage offer.
As part of this process, the lender may offer you the opportunity to use the same survey to conduct a more in-depth evaluation of the property for you.
These are not required, but can be a useful way to spot any issues you may want to consider about the property you plan to purchase. There are three levels of building study, with level one being the simplest and level three the most invasive and detailed of the house.
You do not need to use the lender’s adjuster for this and may consider hiring your own adjuster to obtain an independent opinion.
Once your solicitor has received the mortgage offer from the lender, they will go ahead with all the checks they need to complete. Once you are underway with the searches and paperwork you need to complete with your attorney, it is time to think about your moving date.
The attorneys involved in the process will work to find a move-in date that is suitable for all parties. Once a move-in date is agreed upon, you will work to reach an exchange date with the seller of the home you want to purchase. This exchange date is usually around 2 weeks before completion, and it is on this exchange date that all final documentation is completed on your end and your deposit is transferred to your solicitor.
Once you complete your exchange, the move becomes legally binding and you will lose your deposit if you decide to back out of the move after that stage.
On your move date, attorneys will work with your lender to transfer the remainder of the money needed for the purchase.
When this is complete, you will be ready to move into your new home. It is important to note that legal fees and stamp duty payments will need to be settled before you can complete your purchase. Your solicitor will send you a breakdown of the costs owed to you before the completion date.
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