Before buying your first home, it is important to understand the process as a whole in order to budget and plan appropriately. However, we know that a house purchase can be overwhelming and complex in the beginning, and so our Mortgage Brokers are here to support you throughout the process and answer any questions you may have.
Please note that the below information is based on the process in England & Wales, and differs in Scotland.
Initially, the best thing to do is to speak to a Mortgage Broker who will be able to find out if you can get a mortgage, how much you can borrow, and secure a formal agreement from a lender, often called a ‘decision in principle’.
You will also have the chance to discuss the options available to you, get an accurate idea of the costs involved and the monthly payments you can expect. Once you have found the best deal available to you, you will be ready to start hunting for your ideal home.
Armed with the knowledge that you can obtain the mortgage you need, you are now ready to start house hunting. Having the decision in principle will mean that estate agents will take you far more seriously as they will know that you can afford to buy a property.
Now comes the exciting process of looking through the property papers and internet for your dream home. As and when you find a property of interest, you can contact the estate agent and request a viewing. You can do this as many times as you need and should not feel under any pressure to offer on a property.
When you find a property you like, you can put in a formal offer. This is simply saying to the estate agent that you would like to offer a specific amount for the property. The estate agent will relay this to the vendor who will either accept, reject or counter offer. If it is outright rejected or a counteroffer is made, you are free to go back and forth as much as you like to negotiate a deal. Once an offer is accepted, you need to go back to your Mortgage Broker to formally apply for the mortgage.
It is worth noting at this point that no formal commitment has been made by either party, and the agreement to buy the property is nothing more than a gentleman’s agreement between you and the seller, therefore, either can back out (details on when the agreement becomes legally binding will be found below). This can be an unnerving concept, however, you can take heart from the fact that, as the process continues, both buyer and seller are typically spending money which will often be lost should either party pull out of the deal. Therefore, the further you proceed, the less likely it becomes for anyone to back out of it.
Once the offer has been accepted, you need to return to your Mortgage Broker to make a formal application to the lender. At Gladstonei365 Mortgage Brokers we always search the market a second time to see if a better deal has become available to you at this point, as things change quickly in the mortgage market. Once we have found the best deal for you, we will submit a formal application on your behalf, which also involves forwarding all the evidence we have gathered regarding you and your income.
We will have already verified your income and, with our knowledge of lenders’ criteria, will ensure we have everything in place to keep the application process as smooth and efficient as possible.
The lender then needs to first agree to lend you money, which will involve them satisfying themselves of your income and eligibility, and secondly agree that the property you have chosen is suitable security for the loan. This involves a valuation of the property you are buying, which is typically paid for by you, although sometimes free valuations can be obtained.
At this point, it is normal for you to instruct your solicitor to begin acting on your behalf in the conveyancing process. We can help you in finding a solicitor if you are unsure who to use.
Once the lender is satisfied with both you and the property, a formal mortgage offer will be sent to you, your solicitor and ourselves at Gladstonei365 Mortgage Brokers. We will check the offer to ensure everything is as it should be and then contact you to confirm this.
Once the solicitor acting on your behalf has satisfied themselves from a legal perspective, exchange of contracts takes place. This is the point in the process when the agreement becomes a legally binding contract between buyer and seller. Part of this contract typically includes a date for completion, which will have been agreed previously by both parties.
Upon completion, the money is paid to the seller and ownership of the property is then transferred into your name. You will get the keys and are now officially a homeowner.