The first steps to buying a house in the UK
What are the steps to buying a house for the first time?
Thinking of buying a house in the UK but not quite sure what first steps to take? Does the process of getting a mortgage confuse you?
Read on to find out the different stages of buying a house in simple terms.
Step 1 of buying a house: Savings & schemes
So… how does buying a house work exactly? Initially, hopefully you will have already started saving some money or thinking about starting to save for a house.
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The steps to buying a house for first time buyers is slightly different than if you already own properties. For example there are multiple schemes available in the UK to help first time buyers save for a property.
Step 2: Get some mortgage advice
So you have two options here…
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The first option is to go directly to your bank
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The second option is to approach a Mortgage Adviser
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The main difference is that Mortgage Advisers have access to a wide range of lenders. ‘Lenders’ is another term for the multiple different banks who will be providing the mortgage.
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This means that they will be able to find you the best deal on the market, as well as being on hand to guide you through the whole process.
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Here at Amulet Mortgages, we are whole-of-market Mortgage Advisors. This gives us access to every bank offering mortgages through the broker market.
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When buying a house, it’s a good idea to speak to a mortgage advisor, they will:
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Be able to give you free mortgage advice
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Go through all the costs with you. There is more than just a deposit you need for buying a house, including solicitor fees, survey fees and sometimes stamp duty.
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Analyse your spending habits to see what options are most affordable to you
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Give you an idea of how much you can borrow and how much the monthly payments will be
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Discuss the different types of mortgage and interest rates available
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At Amulet Mortgages we are flexible and able to speak to clients outside of office hours.
Once the Mortgage Advisor has gone through this, they will be able to get you an Agreement in Principle.
An Agreement in Principle is a written estimate from a mortgage lender (a bank), giving you an indication of how much you can borrow. It is free to get an Agreement in Principle and it lasts for an average of 60 days, after this time your Mortgage Adviser will need to renew your Agreement.
What is an Agreement in Principle?
What is a credit check when buying a house?
At this stage the lender carries out relevant credit checks, analysing your credit history. If you have a low credit score, your Advisor might need to place your mortgage with a specialist lender. In some cases if your score is too low, you might not be able to borrow. If you are concerned about any previous missed payments or if you think you’ve had any credit problems, make your Mortgage Advisor aware of this and they can look at your credit report and find the best solution for you.
Step 3: Start the house hunting
Once you have your Agreement in Principle, you are now in the best position to make an offer on a property.
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If you haven’t already started house hunting, now is the time to see what’s out there. Do your research. Find comparable properties that have sold on the street that are similar to get an idea to how much you should offer.
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We advise that you start house hunting using websites such as Rightmove, Zoopla or Prime Location.
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Once you have found a property that you like, you will then need to make an offer with the Estate Agent. We would advise that you firstly call the agent and then also send an email to confirm. You will need to provide the Estate Agent with your Agreement in Principle and Solicitor details at this stage.
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When negotiating on a property, it is sometimes a good idea to keep your first offer below your maximum budget.
Step 4 of buying a house: Protection and insurance
Buying your first house is undoubtedly one of biggest milestones of your life. You’re spending the time and money to build a future for you and your family. You should also ensure that you are also protected against the unexpected. This is why this next step of buying a house for the first time is so important.
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What insurance do you need when buying a house?
​There are a variety of different types of insurance to protect you in different situations. Whilst buildings insurance is the only insurance that is legally required, the other types are still highly recommended.​
This will protect you in the event of there being a fire, flood damage or if your home has been broken into. You won’t need this if you are buying a leasehold property, for example a flat whereby the freehold is owned by a management company. If you are planning to make any home improvements or major renovation works, make sure your insurance policy covers the level of work you will be carrying out.
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This will protect your belongings in the event of there being a fire, flood damage or if your home has been broken into.
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This will pay out a lump sum in the event of death. It can be used to pay you’re your mortgage giving you peace of mind that, if the worse was to happen, your loved ones would be taken care of.
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Critical Illness Cover
This will pay out a lump sum in the event of being diagnosed with a critical illness. This money can help cover your bills if you are unable to work or pay for private treatment.
This will pay out a monthly sum in the event of being out of work due to an accident or illness. You can be covered up to around 60% of your monthly salary. This will give you peace of mind that you will still be able to cover your mortgage and bills if you are unable to work.
​Unfortunately you never know what is round the corner, so it is very important that you have the right protection in place.
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Your Mortgage Advisor will go through the different types of protection with you. They will be able to make sure you have the appropriate cover in place.
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Here at Amulet, we have access to a wide range of different cost-effective products to suit both your needs and your budget and we do not charge a fee for this service.
Step 5: Your offer has been accepted on your house
Congratulations, now this is where things get exciting, get back in touch with your Amulet Mortgage Advisor to start the buying journey.
When to instruct a solicitor when buying a house?
Once you have had your offer accepted on a property, your Mortgage Adviser will instruct a Solicitor and submit the full mortgage application.
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Choosing the right Solicitor is very important. The legal side of buying a house will normally take around 2/3 months on average. It is therefore important to find a good solicitor that you can trust, and that you and your Advisor are easily able to get hold of, to help the process run smoothly.
Your Mortgage Advisor will usually be able to recommend a good Solicitor, having already built relationships with various Solicitors.
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Once the Solicitor has been instructed, your Mortgage Advisor will then submit your mortgage application. This is where they will complete research with all the different banks to make sure you get the best deal.
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After submitting your full application with the chosen bank, they will review your documents and then instruct a surveyor to carry out a basic mortgage survey/ valuation.
What is a mortgage valuation survey?
The purpose of a mortgage survey is to make sure the property you are purchasing, is worth the cost you are paying.
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The mortgage valuation is carried out by a surveyor and might bring up problems with the property i.e. damp/structural damage which might devalue the property price. You can still negotiate on your offer if this is the case.
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Every bank will require at least a basic mortgage survey to take place, but there are other types of survey available depending on the condition/ type of property you are buying.
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What are the different types of house surveys?​
Either the bank will carry out an online valuation, or they will send a surveyor to visit the property for an inspection. They will check to make sure the property is worth the offer price. **Most banks will give you a free basic survey/valuation for residential mortgages**​
Basic mortgage survey
Usually costing around £300 – £600 on average, depending on the property price. You would instruct a private surveyor to carry out this type of inspection. This will give you a full report outlying any problems with the property in a traffic light system or a ‘condition rating’. Red - further action needed, Amber - attention maybe required, Green - everything is ok.​
Home-buyer’s survey
These are more expensive and can cost upwards from £750, but are very thorough and usually much more detailed than a home-buyer's survey. A full structural survey would normally be recommended for an older or a listed property, or for non-standard construction
Full structural survey
The mortgage will be offered when the underwriter at the bank has approved the valuation/documents.
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Mortgage offers are normally valid for 6 months which should be enough time to complete the legal side.
Step 6: Exchange of contracts and completion
Now we have the most exciting stage of buying a house…
What is exchange of contacts when buying a house?
Exchange of contracts is when the property sale becomes legally binding, once all of the legal paperwork has been completed.
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You will send your deposit to your solicitor who will then be able to carry out an ‘exchange of contracts’ which involves swapping your contract with the sellers’ solicitor.
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Before exchange can happen, the buyer and seller will need to agree on a completion date. This is a moving date that suits both parties.
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Most banks or lenders will normally require 3- 5 days between your exchange date and your completion date. This gives them time to send the mortgage funds to your solicitor ready for completion.
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This can sometimes be longer depending on your situation. For example if you are waiting for your tenancy agreement to finish or for buying a new build property.
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Once you have the date set, this cannot change and so you can then start to furniture deliveries or removals if required.
We hope our guide to ‘the steps to buying a house for the first time’ has given you an insight to the whole process of buying a house. If you would like some free initial advice with a qualified Mortgage Advisor then please feel free to get in touch or request a callback.