The Buying Process
STEP BY STEP PROCESS TO BUYING YOUR HOME
Buying your first home is one of the biggest financial commitments you will make in your life. Whilst it is a very exciting time, it can be daunting with the volume of information available and it’s hard to know where to start. It’s no wonder it’s ranked at one of the most stressful experiences you can go through. We have outlined the main steps of the buying process below, to help break it down.
At Willowgate Finance we will help you through every step of the way, always providing valuable and useful information that will make the whole experience far less overwhelming.
Step 1 – Establish your maximum borrowing amount and get an idea on costings
This is usually the first question we get asked – “How much can I borrow?” The answer depends on a number of factors, such as income, outgoings including any credit commitments and how much of a deposit you have available. Each lender also has their own unique affordability calculator and the results can vary widely between them.
You can contact us for a FREE, no obligation, chat to go through your details and establish your potential maximum borrowing amount, so you know the price range of the houses you should be looking at. This is the first step of the buying process.
The appointment can be face to face at our office in Market Deeping or Pinchbeck in Spalding, or at a time and place to suit you locally. We also offer phone and video call appointments nationally.
In this meeting we will:
- complete a detailed review to get to know your situation so that we can ensure our advice is tailored to your unique circumstances.
- advise on how much you could potentially borrow.
- explain the different mortgage types available, such as fixed rates versus tracker/discount rates and indicative costs.
- go through the various mortgage schemes that are available, including the Help to Buy Equity Loan Scheme and Shared Ownership Scheme.
- advise on the potential costs involved in purchasing your home; including conveyancing/solicitors, valuation/surveys, arrangement fees, stamp duty & deposits – and when these become due.
- discuss the appropriate mortgage protection that is needed to ensure your home and lifestyle is fully protected.
You will now have a good idea of your borrowing potential and can now start looking for your new home.
Step 2 – Obtain an Agreement in Principle
An Agreement in Principle (AIP), which is also known as a Mortgage in Principle or Decision in Principle, is a letter or certificate from a lender stating that ‘in principle’, i.e. as long as all the information that has been provided on the application – such as your income/outgoings – is accurate and can be verified, they will be prepared to lend you a certain amount of money (usually the maximum amount they would offer – although you do not have to borrow the full amount). They will also perform a credit check at this point.
Some estate agents will require you to have an AIP before they even arrange a viewing on a property, and some won’t forward an offer to the seller unless you have one. In many cases they won’t confirm the sale is agreed, and take the property off the market, without site of an AIP and proof of deposit.
Having established your circumstances in our first appointment, we can help you obtain an AIP after searching the whole of the mortgage market to establish the most suitable lender and mortgage product for you.
Step 3 – Apply for a mortgage and instruct solicitors
Once you’ve found your perfect home and had your offer accepted, it’s time to submit the full mortgage application and all the supporting documents, such as bank statements and payslips, to the lender for assessment. We can get all the paperwork ready and submit the application for you. Our process includes:
- checking that the mortgage we recommended at the AIP stage is still most suitable mortgage scheme as rates change often.
- obtaining payment for the upfront fees i.e. mortgage valuation.
- completing all the paperwork and collating all documents to submit fully packaged to the lender to ensure maximum chance of success.
It is also time to instruct a solicitor to handle the legal arrangements to purchase the property, which is separate from obtaining a mortgage. We can help you find one if you haven’t already.
Step 4 – Mortgage valuation & searches applied for
Once the lender receives the full mortgage application and documents, they will instruct a valuation on the property to make sure it is worth the purchase price agreed and a good security for them to lend money on.
A basic mortgage valuation is required in all circumstances. You may wish to obtain a more in depth report on the property for your own peace of mind, such as a Homebuyers Report or Building Survey.
At the same time, the legal conveyancing should be started by your solicitor. They will receive the draft contracts from the seller’s solicitor to allow them to start their work, applying for local searches and checking the property Title at the Land Registry.
Step 5 – Mortgage offer issued
Once the lender has assessed all the supporting documents and are satisfied you can afford the mortgage, and the valuation has come back as satisfactory, they should now issue you with a binding mortgage offer.
It’s time to have a little celebration at this point!
Step 6 – Exchange of contracts and set completion date
Once all the conveyancing work has been completed – searches returned, replies to enquiries received and contracts signed – you are now ready to Exchange Contracts. Your solicitor will require you to have sent them the deposit monies and the balance of their fees and other costs, such as Stamp Duty Land Tax, prior to Exchange of Contracts.
All insurances will need to be started from this date.
Step 7 – Move in
Completion! Your solicitor will advise you once this has happened, and you can get the keys to your new home!
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE
Not all Buy to Let Mortgages are regulated by the Financial Conduct Authority.
You may have to pay an early repayment charge to your existing lender if you remortgage.
There may be a fee for arranging your mortgage, however the precise amount will depend on your circumstances. Typically the fee is £395.