Buying a new home is an exciting prospect, however it is important to inject a bit of realism into the process and assess whether your dream property is within your means.
If you’re looking to purchase with a mortgage, then you will have two main factors to consider:
It’s easy to assess how much you can borrow by taking a look at the different affordability calculators online to give an indication on what mortgage lenders are prepared to lend you based on your income.
To take it that step further and reassure yourself on where you stand in terms of borrowing, we would recommend speaking to an independent mortgage broker and secure an Agreement in Principle (AIP), which can help make you more attractive to estate agents and sellers.
There are many factors that determine whether a home is right for you. Some important things to consider are:
With the cost of energy rising, climate awareness increasing, and the government considering legislative action to improve the energy efficiency of UK homes, it is becoming increasingly important for you to understand the energy performance of the property you are purchasing.
This information can be found on the property’s Energy Performance Certificate or EPC. An EPC provides a rating of the property’s energy efficiency on a scale from A-G with A being the highest efficiency band. This will be determined based on a scoring system assessing the key energy performance areas within the property. Alongside the current rating will be an indicator of the potential score if improvements were to be made.
The better rating a property receives the more energy efficient it is, reducing excess CO2 emissions and potentially saving money.
So, you’ve scoured the market, viewed a property you love, and now you’re ready to put in an offer on your dream home. What’s the next step?
You need to evaluate how much you’re willing to pay for the property
The property will be listed at an estimated property value which is reached via a market appraisal from the estate agent; however, this is not a legal valuation and is not necessarily the price you will pay. Don’t be afraid to negotiate!
For more on the difference between a market appraisal and a mortgage valuation, check out our mortgage valuations page here.
When you are looking to make an offer make sure to specify any fittings, fixtures, or additional items that you want to be included. Your solicitor will go into more depth on this at a later date, but to avoid any disappointment make sure any inclusions are clarified in writing at the point of acceptance on your offer.
Your offer has been accepted, now it’s time to apply for your mortgage!
Unless you are proceeding with a cash only purchase, choosing your mortgage will be one of the most significant steps in your property purchase, so you need to make sure you are getting the best product for you.
You might want to take on the task of finding your own mortgage deal, but if you haven’t got the time, or perhaps want the reassurance of some professional advice, then get in touch with an independent mortgage adviser.
A mortgage adviser will have access to all the possible products, rates, and exclusive offers from every lender – even the obscure ones – and will be on the ball in corralling you and the lender to provide the correct forms and documents in a timely manner so you can keep the process moving along as quickly as possible.
There are many resources available that allow you to do your own online comparison and, regardless of how you decide to proceed, we would recommend taking a quick look to make sure you are getting the best deal.
Throughout the rest of your property purchase journey, you will need to liaise with a licensed conveyancer to conduct the legal proceedings associated with your purchase.
Your conveyancing solicitor will be responsible for any legal paperwork, local searches, Land registry searches, draft contracts, and the final exchange. All updates throughout the process should be readily provided to your solicitor to help make the process as timely as possible.
Although you may not want to instruct a conveyancing firm, or pay their retainer prior to your offer being accepted, you may be able to speed up the process by finding a solicitor you would like to proceed with ahead of time.
Most importantly when choosing your conveyancing firm, you will need to take into consideration whether that firm are on your lender’s approved conveyancing panel. Considering this, you may choose to pick a conveyancing firm that is on the panel for most major lenders, or you might consider holding off until you are aware of which mortgage lender you will be using.
Once you have decided to proceed with a mortgage application, the lender will then need to carry out various checks to ensure that they are confident in lending to you.
Chief amongst these will be the check to determine whether your mortgage provider is happy to lend on the property you have chosen.
For mortgage purposes your property will act as security for the loan, with the understanding that if you are unable to continue with your loan payments the lender will have the authority to repossess the property and sell it to recoup the loan.
To gauge this the lender will arrange a mortgage valuation to assess whether the property’s value is sufficient to cover the loan requested by the applicant.
Each mortgage provider has their own lending criteria with rules and guidelines about the type of property it will and will not lend on. This may include parameters about commercial premises, non-standard construction, or unusual materials.
For more information, check out our mortgage valuations page here.
Once your mortgage valuation comes back, and you have been assured that you are able to borrow the required amount, we always recommend that you purchase a home survey.
A mortgage valuation is not the same as a home survey and is intended for lender purposes only. A valuation alone doesn’t provide a thorough enough inspection to inform you about the condition of the property you are purchasing and leaves you vulnerable to discovering more serious issues later down the line. Moreover, your lender is not required to share the details of the mortgage valuation with you.
Opting to having your own independent home survey carried out will allow you to gain a better understanding of the property’s current condition and highlight any repair work that may need to be considered for your budget.
If problems are found at the property, it may even give cause to negotiate for a lower sale price to accommodate for any necessary work to the property. You may even consider obtaining quotes from specialists for an estimate of the cost of work.
Check out some of the common problems that may be raised on a home survey here.
There is a selection of different survey options available to you and choosing which survey is right for you will depend on several factors including the type, age, and the condition. Find out more about the different levels of home survey here.
To enquire about arranging the appropriate level of survey for you, get in touch now.
An essential part of a conveyancer’s job is to carry out searches. These vary in price and type depending on the location of the property, however, there are a few non-optional searches that will be required by your mortgage lender:
The search stage of the purchasing process can be headache. There will often be delays, whether this be from receiving information back from your seller, the local authorities, or complications that may arise. It’s important to keep in touch with your solicitor to ensure that you’re sending and receiving information in a timely fashion to prevent any unnecessary holdups, and to stay abreast of where you are in the process.
Once you’ve received your formal mortgage offer, ensure that check it through thoroughly! Any mistakes or discrepancies have the potential to cause delays or additional expenses, and if not caught can cause chaos when it comes to exchanging or completing on a property.
Check your mortgage offer front to back to ensure that property details, figures, and even spelling is correct. If you find any mistakes, let your solicitor know as soon as possible.
You may not live there yet, but you will want to make sure you’re protected from the moment you become the legal owner of the property.
Once you’ve received your valuation and searches back have a look around to find the best possible insurance for you, you may even be able to arrange this through your mortgage broker.
You’ll want to pay particular attention to the rebuild figure that’s given on your valuation report, this gives you an estimation of the cost to rebuild the property from the ground up should the worst happen.
Note: this is not the actual market value of the property, there may be a significant gap between the market value and the rebuild figure.
You’re that one step closer to moving in, but before you can do so you need to get your ducks in a row when it comes to your deposit.
Prior to the exchange of contracts, you will need to arrange for all the funds for your deposit to be placed in one account to be sent across to your solicitor (two if over £85,000).
As you most banks monitor and prohibit sums greater than £25,000 to be moved in one day, you will be required to arrange a CHAPS (Clearing House Automated Payment System) payment between your bank and solicitors’ office, usually for the same day.
An exchange of contracts takes place when your solicitor and the sellers solicitor swap signed copies of the contract. At this point the sale is legally bound and neither you nor the seller can pull out of the sale (without risking your deposit).
Following exchange of contracts, your solicitors will be hard at work getting things ready for completion. They’ll be full steam ahead compiling all relevant documents, sending through a completion statement, completing some final searches to make sure everything’s still in order and the seller still owns the property, preparing the transfer deed for you to sign, and sending across your payment in full to the seller’s solicitor.
Congratulations! Once you receive word of completion from your solicitor – you can collect the keys and start the process of moving in.
At this stage the property is yours, but there are just a few final bits of admin that need to be completed to prevent any trouble further down the road…
Then it’s home sweet home!
Book a home survey with SDL Surveying and we’ll help highlight if there are any issues with the property that may not be immediately obvious when viewing a property.