Guide to buying a house

Overview

Buying a new home can be stressful and if you’ve never done it before, the process can seem daunting.

We’re here to help. In this section, you’ll find a step-by-step guide to house buying. Our eight-step home buyer’s journey is designed to help address some of the questions you may have as a home buyer. If your questions are not answered by the information below, please feel to email us or call us free on 0800 169 9661.

Alternatively, please download our helpful infographic which explains the home buying process and why getting a survey can give you confidence in your purchase.

Buy or rent?

There are advantages and disadvantages to buying and renting. Think carefully and weigh up the benefits of each, based on your personal circumstances.

Buying a house can be an expensive exercise. When setting out your budget, don’t forget to factor in essentials like an independent residential survey, solicitors’ fees, and removal costs, as well as practical extras like furniture, appliances and carpets.

Find a property

If you decide it’s the right time to buy a property, it’s time to start looking for the ideal home in the ideal location. As well as visiting local estate agents or online property websites such as Rightmove and Zoopla, you should also take a drive around your ideal location, and check out the private advertisements in the local newspapers.

It’s important to research the local area and learn as much as you can about the property you’re thinking of buying. And don’t forget to ask the property owner all the questions you need answers to. For example:

• How long has the seller lived there?
• Why is the seller moving, where to, and is there a chain?
• Has the property had many viewings/offers?
• How long has it been on the market?
• How long is the lease (if it has one)?
• Are there any parking issues outside the property?
• Who lives upstairs/downstairs/next door?
  • What are they like?
• What repairs have been done?
• If there’s a real fireplace, is it safe to use?
• How old is the boiler and when was it last inspected?
• What’s included in the sale?
  • White goods?
  • Curtains?
  • Wood burner?

Find a mortgage

Do your research. There are two routes when looking for the right mortgage. You can either go direct to a high street bank or building society, or you can go through a broker or financial advisor. Once again, there are advantages and disadvantages to both options.

Financial advisors may be better placed to provide you with an independent view of the whole lending market, but it may take some time to identify which lender has the best product for you.

When you opt for a mortgage with a high street bank or building society, you’ll generally be offered one of its in-house products which may limit your ability to obtain the best rates. However, the advantage of using a high street bank or building society is that your lender should be able to process your application quickly, particularly if you’re already a customer with a history of transactions.

But which mortgage should you choose?

• Fixed Rate
• Interest Only
• Standard Variable Plan
• Tracker
• Discount Rate

And there are some other things to be aware of:

• Arrangement Fees
• Early Redemption Charges
• Payment Shock
  • This can occur for a number of reasons:
  • The expiration of an initial or temporary start interest rate (sometimes known as a ‘teaser rate’)
  • The end of a fixed interest rate period
  • The end of an interest-only payment period
  • An increase in an adjustable-rate mortgage’s fully indexed interest rate
  • The re-casting of a payment option adjustable-rate mortgage

Arrange a valuation and a survey

So you’ve found a property you’d like to buy, but you can’t proceed until you’ve had a valuation. Be aware that a valuation is not the same thing as a survey. But why do you need either?

When lending you money to buy your property, your lender will want to ensure:

• that you can pay – what is your income compared with the value of the loan you’re requesting?
• that you will pay – what is your record of repaying loans?
• the security – your lender will want to be sure that the property is worth more than the loan.

For these reasons, the lender requires a valuation.

As a buyer, you’ll be making one of the biggest investments you’re likely to make in your life. You’ll therefore want to ensure:

• that you can afford the loan – what’s your income compared with the loan required?
• that you can pay – what is your experience of repaying loans?
• the value – is the property worth the asking price, and what repairs need to be made?

For these reasons, buyers need surveys.

Therefore, your fourth step on the homebuyer’s journey is to instruct a valuation and survey of the property you’re thinking of buying.

Remember, just as a lender won’t lend without a valuation, a buyer shouldn’t agree a price without a survey.

If you haven’t already, take a look at our survey comparison guide to find out which survey report is right for you and your circumstances.

To book a survey, or for free advice on which survey to choose, please give us a call on 0800 169 9661.

Agree a price

Once you’ve agreed a price and the terms of your mortgage loan, it’s over to your solicitor who will act on your behalf to:

• Check with the Land Registry that the property exists
• Check with the Charges Registry to identify who has a charge over the property (e.g. an existing mortgage lender or an existing finance lender. There may be more than one charge on a property)
• Ensure legal title for the lender (i.e. the lender is paid back first)
• Receive the loan from the new lender
• Pay the previous lender (if one exists)
• Pay the balance to the vendor/builder.

Find a solicitor

So, you’ve agreed on an offer and now you need a solicitor or conveyancer to transfer the legal ownership of the property from the seller to you. Choose wisely, and remember, solicitors must be members of the Law Society, conveyancers must be members of the Council for Licensed Conveyancers. Many larger solicitors’ practices employ in-house conveyancers to do their conveyancing for them, so do your research.

Exchange contracts

Only when your solicitor is satisfied that everything is in place (such as legal checks and mortgage funds) does the ‘Exchange of Contracts’ take place. This is a legally binding process, committing both parties to the deal.

Complete!

‘Completion’ takes place when your solicitor is in a position to pay the previous lender (if applicable) and the vendor. It’s at this point that you become the legal owner of your property and finally receive the keys. Congratulations!