Buying a home can seem hugely daunting. I wanted to create a ‘feel good and not scary’ mini guide to make this process as seamless as possible for you. It is something that most of us aspire to achieve within our life time but when it comes it the crunch most of us start out not knowing what we are doing and what next steps to take.

The idea behind creating this in-depth guide is to prepare and educate soon to be home owners on what happens when buying a home and what to expect at each stage of the process. Obviously there can be things that crop up while going through the process but knowing what should be happening next puts you in a less stressful space and you are then able to make decisions with clarity.

Buying a home doesn’t need to be stressful.

Easier said than done right! There is so much to think about and organise. You need to find the right property, apply for a mortgage, make an offer, instruct a solicitor, have an valuation, exchange contracts not to mention all the hoops you need to jump through within each of these stages. This is why getting yourself a trusted broker is something we highly recommend.

Being brokers ourselves we understand the pressure that buying a home can put people under so we look to take off some of the strain and help you through the process without too much trauma. It is after all the biggest purchase you will probably make, so it is really important to understand what the next steps are and knowledge really is your best friend within this process.

This guide will break down each stage down and make it easier to understand.

What kind of property shall I buy?

One of the biggest reasons buying a home can be so overwhelming is because it entails taking on a lot of responsibility, making hundreds of decisions that lets face it you are never 100% sure about and the tidal wave of options that are placed before you. Queue brain fog, anxiety and dread. The first questions you should be asking yourself to stop this from happening are:

  •  Where do I want to live?
  •  What kind of property do I want to own?
  •  How much can I actually spend?
  •  What am I looking for when looking for a home?

We would always advise to start by making a list of what you want from a property, does it need to be near a school for the kids? Do you need to get to work easily? Will it need to be near all the amenities? Will it be a flat, terraced, semi or detached house? Would you like it to be in a cul de sac? Does it need to have a garden? How many bedrooms do you require? – as you can see this could potentially go on for the whole guide as there are so many factors to consider but with these few questions you can narrow your wants down. You may already have an area in mind which would make this part a lot easier, finding out about the surrounding area and researching about what the area has to offer is always a good thing to do also.

Obviously all of the above will be driven by price. It will no doubt determine the type of property and area available to you, so getting clear on what you can afford is a must when looking to buy.

Please take a look at our mortgage calculators – https://www.mortgagesquared.co.uk/mortgage-calculator/

What is the difference between Freehold and Leasehold?

Now you have a better understanding of what exactly you are looking and where, you can start to learn about the different types of home ownership.

A freehold ownership means you own the building and the land on which it stands. Most houses you come across will be freehold.

If you are a freehold owner of your property you:

  •  Are solely responsible for maintaining the property – including the walls on the property and the roof.
  •  Don’t have to pay annual ground rent.

Being a leasehold owner of a property it becomes a little more complicated. You own your property for a fixed term but not the land it stands on.

You also:

  •  pay maintenance fees, annual service charges and our share of the building insurance.
  •  must obtain permission for any major work on the property.
  •  will more than likely pay ground rent to the freeholder.
  •  may forfeit your lease if you fail to pay any fees outlined in your contract with the freeholder.

There is more info at https://www.moneyadviceservice.org.uk/en/articles/leasehold-or-freehold-financial-implications

Finding your perfect home.

It is all well and good you being organised and having a list of wants for your property but actually finding it is a whole new ball game. The idea is to get in contact with as many local estate agents as you can to register as a potential buyer. They will then send you up to date details of potential properties that could tick your boxes.

It is always worth calling your chosen estate agents once a week to remind them of what you are looking for as this then ensures you get a look in for properties that have only just been placed on the market. This part can be stressful as you could go and see a handful of properties and none of them feel like they fit. Keep a track of the ones you go and view and write down some notes on each so you don’t confused later on down the line.

Using a broker to apply for your mortgage.

The need for a mortgage is to be able to afford a home, very few people have this much money saved up to put down on a property. This is where most people will begin to find the process complicated and overwhelming. Mortgage Squared was created for this reason. We have helped countless amounts of people through this sometimes complicated process. Mortgage Squared isn’t your average mortgage broker, we are family run, friendly and we believe that our unique business ethos will make the impact it so truly deserves. We know a mortgage is one of the biggest investments of your life and we want it to be a journey that you can feel relaxed and excited about, leaving the stress and overwhelm behind. We want to be your Mortgage Broker for life, standing with you every step of the way and guiding you towards your dream home and beyond.

When using our services we will help source a solicitor/conveyancer, we will also help you with a valuation or home report and throughout the application process we will keep you updated of the progress of your mortgage.

To chat to one of our advisors please click the link – https://www.mortgagesquared.co.uk/

Knowing your Fees & charges

I know that most of you that are reading this will want to run a mile but being one step ahead of the game is key here. There are many fees & charges that go hand and hand with applying for a mortgage and naming each one would be impossible due to each mortgage being different. They will have different defining factors that establish what fees are charged. Here is a list of the most likely ones you will come across –

  •  Mortgage Broker fees – some mortgage brokers charge a significant fee for all the work that they do throughout the journey of your mortgage and some won’t. The catch here is to find a trusted mortgage broker that has a good track record and has some credible testimonials. Word of mouth is always a good indicator that you are in good hands.
  •  Stamp duty – Stamp duty is the one everyone cringes at. It is a government tax that you pay on homes that cost £125,001 or more. For first time buyers you will pay NO stamp duty on the first £300,000 – Confused? Click here – https://www.mortgagesquared.co.uk/stamp/
  •  Valuation fee – The mortgage provider will value your property and make sure it’s worth the amount you wish to borrow. Remember the lenders survey will only look at the property value, not future costs.
  •  Surveyors fee – Some lenders pay this fee for you and other times you may have to pay this yourself.
  •  Solicitors fees – A mortgage cannot go ahead without having a solicitor to carry out the conveyancing and all the legal bits.
  •  Estate agent fee – If you are selling your property you will most likely use an estate agent, the fee is negotiated when they put your property on the market.

For more in-depth info here are some helpful links –

https://www.moneyadviceservice.org.uk/en/articles/mortgage-related-fees-and-costs-at-a-glance

https://www.moneyadviceservice.org.uk/en/articles/estimate-your-overall-buying-and-moving-costs

Tips on making an offer.

Haggling to nab your perfect property can be advantageous if you know the right way to approach the seller. Most sellers will allow a certain amount of leeway when it comes to making an offer. It isn’t unheard of to offer below the asking price to establish boundaries. Your first offer maybe 10% less and then it is up to the seller to decline, accept or try to negotiate a higher amount. If the property is popular and there are a few offers on the table the seller may be able to insist on the full asking price.

Everything taken into consideration and assuming that the seller takes your offer we would suggest that you have a decision in principle from a mortgage lender as this shows you are keen to move forward with buying the property. Always remember that the acceptance of an offer isn’t legally binding, you can breathe a little easier when you and the seller have exchanged contracts.

Surveys – the ‘no jargon’ explanation.

Another mind field of information that people can often find themselves drowning in. Before a mortgage application can be accepted, your lender will instruct a surveyor to carry out a valuation. If the survey comes back with something serious you are free to withdraw your offer because you haven’t exchanged your contracts yet.

Simply put there are three types of surveys.

Valuation for lending purposes.

This valuation is for lending purposes and isn’t a detailed report. It will help the lender to ensure the property is worth what you have asked for and that there isn’t any significant problem with the property.

Homebuyers report.

This is the same as a valuation for lenders purposes, except this time they will prepare a report for you identifying any need for future work to be carried out. For example any refitting, signs of damp or rewiring. You can get an independent report or pay the lender to do it the same time as the valuation for lender purposes.

Full structural survey.

As per the name this one involves a more extensive survey to be taken out. It is where they look at the integrity of the property as a whole. This survey is more expensive but will obviously contain a more detailed report on what work the property may need. If you wanted a full structural survey you would have to hire an independent structural surveyor.

Nearly there, exchanging of contracts.

Exchange is where you are legally bound to buy the property and will also be the point at which you put down your deposit. Like most things, if you pull out after exchanging contracts you will lose your deposit and this is usually a hefty amount of money.

From this point you are now legally the owner of the property and you need to have buildings insurance in place.

Before signing on the dotted line so to speak you need to make sure:

  •  The solicitor has completed all checks that they need to make.
  •  The surveyors report has been accepted by all concerned and it is complete.
  •  You have a mortgage offer in writing which you have read through and understood.
  •  You are aware of completion date.

Just make sure you have everything in order at this point. You are about to make one of the biggest purchases of your life and if there is something outstanding then it could complicate the process and you are so close.

Move in and enjoy.

This mini guide is based on no complications arising so it may seem short and effortless (kind of). The majority of mortgages that are applied for and processed are trauma free but that doesn’t mean you shouldn’t prepare for a bumpy ride.

I could write a whole new post on moving in because there are another plethora of tasks, things to organise and money to pay out but I think I will leave you with the basics of buying a home.

Please don’t forget that when you officially own your property you are liable for it so getting building insurance is something you need to get straight away.

Enjoy making your home worth it.

Here is a check list you can use for when you move in – https://www.postoffice.co.uk/mortgages/moving-home-checklist

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Simon Rowe

Author Simon Rowe

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Mortgage Squared is a trading style of Closer Financial Partners who are Appointed Representatives of Julian Harris Financial Consultants, authorised and regulated by the Financial Conduct Authority No. 153566