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Homebuying guide

Written By:
Myles Robinson - Expert Finance Advisor

Posted: Feb 13, 2023

Homebuying guide

Although the home buying process should be joyful, life-changing experience, it can seem overwhelming if you are new to the process and trying to get on the property ladder. A mortgagee company like ourselves with an independent financial adviser can help you overcome any fears and uncertainties.

We are here to make the home buying journey exciting, we will offer you tailored mortgage advice and aim to get you the lowest monthly mortgage payments with the lender to suit you.

We’ve broken down the mortgage application and house-buying process into digestible steps. Also, we have highlighted the benefits of hiring a mortgage broker to guide you.

We also have a FAQ section that answers some of the most common questions from first-time mortgage applicants and new house-buyers.

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What is the process of buying a home?

Unless you have the funds to purchase a home, buying a house requires finding the right property, making an offer, and appointing a surveyor and solicitor. It can be difficult to navigate the path to homeownership. We’ve simplified it into easy-to-follow steps.

Step 1: Save for a mortgage deposit

A standard mortgage requires a minimum of 10% deposit. It is recommended to save the maximum amount possible. This will allow you to choose from a wider range of mortgage products and potentially offer better interest rates.

The higher your mortgage deposit, the better your mortgage deal will be.

Support could be offered to those with difficulty saving for a deposit. You can get government assistance, including lifetime IAS for first-time buyers and the most recent version of the Help to Buy program. For more information, please see our guide on government mortgage schemes.

You can also ask your family members to help with your mortgage deposit. Many flexible lenders allow gifted mortgage deposits. They also offer various low-deposit mortgage options and zero deposit options like a Family Springboard mortgage.

Applying through a mortgage broker is the best way to find the right lender in these circumstances. We can help you find the perfect one.

Step 2: Search for a property within your price range

If you aren’t sure if you want to buy a property in a particular area, you can search the web using online platforms like Rightmove or Zoopla. These should give you an idea about the available prices. It’s worth checking them against the Land Registry information.

It is a good idea to determine how much money you can borrow. This assumes that you will need a mortgage to purchase your home. You won’t get the same number from all lenders since some are more generous than others.

Most mortgage lenders allow customers with income to borrow 4.5x. Some will extend their loan five times, and some to six times. Your outgoings may impact the amount you are offered. Most lenders consider debt-to-income. While there is no standard for how much you can borrow, it is important to remember that your borrowing ability could be limited by significant financial obligations elsewhere.

Our mortgage affordability calculator will give you an idea of the amount you might be able to borrow for a mortgage.


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Step 3: Make an offer and get an agreement in principle

Now is a good time to talk to a mortgage broker and find the best lender. An experienced mortgage broker can maximize your borrowing power and help you get the best deal.

Our free broker-matching service will match you with the right mortgage specialist. It can help you connect to the best lender to give you the best deal. This will save you money over the long term, but it also means that you’ll be able to save time as your broker will assist you with all the paperwork.

Before approaching mortgage lenders, reviewing your credit reports is a smart idea. This will allow you to correct any mistakes and indicate what the lender will view when they examine your financial history.

After your broker has found the best product for you, you can accept the principle mortgage. This stage will allow you to determine how much money the mortgage lender would be willing to lend you and what interest rate you would have to pay.

To reserve a mortgage, some lenders may charge a booking fee. This usually ranges between £99 to £250.

Our guide to mortgage applications provides detailed information on the process of applying for a mortgage and how a broker might help.

What is the best way to make an offer?

Once you have determined that you can borrow the amount you require, you will need to make an offer on the property. This is usually done through an estate agent.

Except if you are selling a property, there won’t be any fees for estate agents. In that case, they will normally charge 0.5 to 3% plus VAT.


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Step 4: Identify a surveyor and solicitor

A solicitor will be required to manage the legal aspects of your property purchase. A solicitor will also conduct searches with the local council to determine if any local issues or factors could affect your home’s valuation. The typical cost of a solicitor is between PS500 to PS1,500 plus VAT. They may also ask for a 10% deposit upfront.

Hiring a surveyor to conduct necessary surveys on your property is important. This will help to identify any issues that may affect the price of your home or cause problems in the agreement.

The lender will first conduct a valuation survey to determine the value of your home. While some mortgage providers will not charge for this, others may. If you do have to pay the bill, it could be between PS150-PS1,500.

A property survey is a must to find any structural problems and make necessary repairs. This will allow you to negotiate a lower price and prevent you from being hit with huge repair bills later.

Property surveys cost anywhere from £350 to £800, depending on your property and the type of survey you select (some are more detailed than others).

We can assist you in comparing the costs of surveyors and solicitors to make the best decision.

Step 5: Accept your offer and submit your mortgage application

You may be able to negotiate a lower price for the property you are buying if your property surveys have been completed. The mortgage broker will advise you on the best way to go. However, if there are no problems, your advisor will direct your lender to move forward.

The arrangement fee is a fee that mortgage lenders may charge. Some will waive it, while others could charge you up to £2,000. It is possible to add the fee to your mortgage if applicable. However, you will be charged interest.

If everything goes according to plan, the mortgage lender will issue a binding offer. The mortgage lender will issue a binding offer within seven days. Your broker can then compare the offer to other products on the market if they are unsatisfied.


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Step 6: Contract exchange and completion

Next is the exchange of contracts if you accept your mortgage lender’s offer. Ask your solicitor for help and talk to your broker if you have any questions. Once you and the seller sign it, the deal becomes legally binding. Make sure you are happy about everything.

The money is transferred from your solicitor’s bank account to the seller’s account after the contract exchange. The money is transferred from the solicitor’s bank account to the seller’s account. This service usually comes with a telegraphic fee of approximately £25-50.

A mortgage account fee may be required to be settled. This fee covers the maintenance, setup and closing of your mortgage account. It is usually around the £100-300 range. It can be added to your mortgage or paid upfront to avoid interest.

Final payment of your solicitor’s bill must be made upon completion. You should have paid the deposit and local search fees already. The typical fee for legal work would be between £500 to £1,500, plus 20% VAT.


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What happens after you have closed your mortgage?

Although the property may be legally yours, some legal issues remain to address, such as arranging insurance or paying stamp duty. We’re here to help.

Here’s a quick breakdown of what needs to be done after your mortgage is approved.

  • Update land registry
  • How to pay your stamp duty
  • Arranging insurance
  • Hire a removal company

Your solicitor must update the Land Registry

Your solicitor would register the sale if you purchased the property in England or Wales. However, you should check the Land Registry database to verify that the sale was recorded correctly. Your legal representative will register your sale of Northern Ireland homes with Land and Property Services. In Scotland, they will update the Registers of Scotland.

Stamp duty to be paid

You have 14 days to settle your bill if you purchased a property in England or Wales that is more than £500,000 at the time you write. Your solicitor will make the payment. You can find out how much stamp duty and the rates starting in April 2021 on the UK government website.

Arranging insurance

After you have exchanged contracts, you will need to ensure the structure of your building with a building’s policy. You have a variety of options at different prices. Some include content insurance, while others are standalone.

The mortgage broker can help you explore all options and recommend other protection insurance types popular among householders. When you get your full mortgage offer, you should consider life insurance or critical illnesses cover. However, it’s not too late to look into your protection options if one wasn’t taken out at the time.

Hire a removals company

Although not everyone requires a moving company to move their belongings into their new homes, those that do need one can expect to pay between £300 and £600. Moving during the week can help you save money, as weekend charges are often higher.

We can help you find a low-cost removals company as part of our service.


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The underwriting process

After the agreement in principle, the underwriting phase of a mortgage application is completed. After reviewing your application, they will examine your credit and finances to confirm that it is correct. This will also give the mortgage lender an accurate picture of the risk you are taking.

Unless the underwriting team requests additional information, the underwriting process is conducted simultaneously with the lender’s eligibility and affordability checks.

The following information will be cross-checked during the underwriting process.

  • A credit report will be done (a hard credit check)
  • Information about the property (value, potential issues, etc.)
  • Affordable (the underwriter will double-check this).
  • Eligibility is determined based on the underwriter’s policy and other fraud rules.

Our guide to mortgage sub writing provides detailed information on the underwriting process.

Talk to an expert about your monthly mortgage payments

We can help you if you are new to the home buying property market or need assistance. Our broker-matching service is free and will match you with a mortgage expert to keep your monthly mortgage payments as low as possible.

They will help you navigate the process, assist you with paperwork, and ensure that you are matched to the right lender.

We can help you find the best deals on insurance, removal services, and even solicitors. A consultation with one of our experts won’t cost anything, but it could help you save time and money in the long term.

We’ll help you navigate the home buying process by introducing you to an expert mortgage adviser.


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Home buying process FAQ

What is the best time to ask solicitors for proof of deposit?

Although some lenders will not require you to provide proof of sufficient deposit or evidence to support it, others may. Your solicitor may ask for copies of your bank/savings statements, contractual agreements signed, and other certifications to verify that you have sufficient funds.

Learn which deposit sources are preferred by mortgage lenders and how to evidence funds in our guide to providing evidence of deposit for a mortgage.

What time will my solicitor verify proof of funds?

As the estate agent, your solicitor, seller’s solicitor, and mortgage lender are legally required to view proof of funds, you can expect to be asked multiple times for proof. In the beginning, you will likely be asked for proof.

After you have accepted an offer, proof of funds is required to verify that you can pay for the property. This could be a mortgage, the sale or purchase of an existing property, or any combination thereof.

What is the cost of an environmental search?

For mortgage applications in the UK, environmental searches are a common practice. Your lender may insist that you do one with all the others.

This is an important check because it will show if the property you buy was built on or close to contaminated land, water, or an old landfill. This information is vital as former industrial land may still contain toxic substances or harm your health.

This search will also reveal whether flooding is possible on your buying land, at which point specialist lenders would be required to facilitate a flood zone mortgage.

What happens when the searches are completed?

If everything goes according to plan, your solicitor will invite you to sign the contract paperwork, including your mortgage deed.

It could be that some issues are discovered at this stage, including

  • Flood/environmental Risk
  • Subsidence evidence
  • Enforcement notices or compulsory purchase orders
  • A recent planning application in motion
  • The property could be affected by infrastructure work done by the local council
  • Water issues or drainage
  • An ongoing or past boundary dispute

Your conveyancer will inform you if any of these issues are discovered. You can legally withdraw from the agreement at this point, renegotiate the price, or continue with the transaction despite the risks.

What is the average time it takes for searches to return?

Conveyancing searches usually take between two to four weeks. Most cases go smoothly. However, if any problems need to be addressed, it could slow down the process so that all parties can come up with solutions.

What happens to my mortgage if I sell my house

The proceeds from the sale of the property will typically be sufficient to settle the debt unless you are porting the mortgage to your new residence. This will be done by your solicitor or conveyancer asking for a redemption statement from the lender. The completion funds will then be used to repay the remaining amount.

You will need a mortgage to purchase your next home. This applies even if the mortgage was transferred from your previous property.

Contact us now for our expert help and assistance.