How to Buy Your First Home

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Taking that first step on the property ladder is an exciting moment, but it can be a confusing process for first-time buyers. Keep reading to find out the step-by-step process you need before you buy your first home.

#Step 1: Check Your Mortgage Suitability

The first thing you need to do when buying your first home in the UK is to visit a broker. The broker will type in your details, name, and income and tell you how much of a mortgage you can get. A broker tells you this based on your income, age, and other factors.

Doing this helps you know how much house you can buy in the neighborhood you like.
If you are planning to save a deposit of £30000, the house you will buy should be worth £200000. Your broker can tell if you qualify to get such a mortgage.

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Checking your mortgage suitability with your broker is also an opportunity to discover other things impacting your mortgage suitability.

A good broker will tell you if there are things on your file dragging down how much the lender can borrow you to get a mortgage.

#Step 2: Save Up Your Deposit

Once you have checked your mortgage suitability and determined how much you are likely to get, you can start saving up for that deposit and the extras. There is a video on my YouTube channel where I shared tips on how you can save up for a mortgage; you can watch it here.

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#Step 3: Get A Mortgage in Principle

Saving up for your deposit and the extras can take a while, but if you have them ready, congratulations!
Once your deposit and extras are ready, contact the broker that checked your suitability so they can check your mortgage in principle. You can also get it online by filling in your principle.

The purpose of this mortgage in principle is to show the agent selling the house that you can get a mortgage in the UK.

Once you get the mortgage in principle, print it out or save it on your system; so that you can present it when you go house-hunting. It smoothens the house hunting process because some agents will ask for it.

#Step 4: Start House Hunting

Once you get your mortgage in principle, the next step is to start house hunting. Look for houses, and go check them out. One way to house hunt is to visit a house agent and ask about the homes they have for sale.

A more effective method is to search online using websites like RightMove and Zoopla. These websites list houses for sale.

As you browse the websites, it is always good to use filters to filter out houses that do not have the criteria you need.

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If you want a garden, a 3-bedroom, parking, or a shed house, you can use the filter to select them and remove those you do not want to see. After that, call up the agent to see the houses.

The beauty of house hunting is that you may think you know what you want until you see other options. You might start out thinking of an old house, but change your mind once you’ve visited a few old ones. House hunting helps you determine what you want and to find your dream house.

#Step 5: Make an Offer

Once you have found your dream house, make an offer. When you go house-hunting and find the one you like, be careful not to be effusive in praise for the property.

Do not go talking about how beautiful, perfect and great it is. It may impact your negotiating ability. Manage your emotions.

Listen very well to what the house owners say, ask questions. If you do not ask, you will not find out. Open doors, sit in rooms and look around.

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Asking questions will help you find out if they are desperate to sell the house. It will help you know if they are sitting on the fence and not so keen about selling it; this can help your negotiating ability.

It is alright to make an offer slightly lower than what the seller initially says. If the house is being sold for £200000, you can offer to pay £180000 or £190000. They might be able to meet you halfway.

Speak out if you find out that there is work to be done in the house like the boiler needs to be changed or the bathroom needs to be fixed. It may help you to drive down the price a bit lower by letting the seller know you have a lot of repairs to do.

#Step 6: Get a Deal From Your Mortgage Broker

Once your offer is accepted, go back to your mortgage broker to look for a good deal for you. Bearing in mind your mortgage suitability and the mortgage in principle, they can find you a good deal.

The broker will find a deal that allows you to have a convenient monthly payment with good interest. A good deal means you can pay your mortgage over some years that is convenient for you, depending on your age.

There are two kinds of mortgage deals your broker can get for you;
I. Interest-only mortgage: This kind of mortgage allows you to pay just the interest on the loan from the lender. In this case, your monthly payment will be low. An interest-only mortgage will not allow you to pay off the mortgage, only the interest.

II. Principle and interest mortgage: A principle and interest mortgage mean you are not just paying the interest but also paying off a part of the loan.

Your monthly payment will be a little bit higher. The benefit of this is that it allows you to chip away at the loan from the lender. I advise that you go for this mortgage because it allows you to pay off your mortgage.

#Step 7: Hire a Solicitor for Conveyancing

The job of a solicitor is to carry out all the legalities. He handles all the payments you need to make and the legal steps to carry out. The price to carry out conveyancing ranges between £1000 and £2000.

#Step 8: Hire a Surveyor

A surveyor will go into the house and find out if there are things you need to watch out for. They tell you about any electrical issues, leaks, and work you need to do.

If your surveyor says there are a lot of repairs to be done, you can return to the seller to renegotiate your offer.

However, if he comes back with little day-to-day changes, you do not need to renegotiate; factor them in for the future.
Your mortgage lender will also send their surveyor to ensure the house is what you say it is. They will value the house as a lender.

man in yellow safety reflective vest with hard hat doing house inspection
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Your surveyor will tell you what they think the house will be worth based on their survey. If your surveyor quotes a figure way higher than the offer, you can also renegotiate the price with the seller

#Step 9: Sit Back and Wait For Them To Do Their Job

At this stage, sit back and allow your team to do their job; they will keep you updated about the fees you need to pay while your lawyer makes the payments for you.

#Step 10: Exchange of Contract

Once your lawyer has made a filing with the council and is happy with the state of the house, he will instruct you to do an exchange of contract. At this point, once you sign, you cannot go back. Going back will attract charges. You may have to pay a hefty fee if you decide not to buy the house anymore.

#Step 11: Inform Your Current Landlord

Contact your landlord to inform them you are moving out soon, especially if your house has a notice period that is quite big.

#Step 12: Get a home insurance

Home insurance is important once contracts have been signed and exchanged. If anything happens to the house at this point, you will be responsible for it.

#Step 13: Completion

The time between the exchange of contract and completion should be short. Tell your seller and lawyer at the beginning of the process that you want a short exchange period.

Six months or one-year duration is too long. A lot can happen in that space, and you will be liable for anything that happens at that time. Invite your lawyer to speed up the process so you can complete it quickly.

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Final note..

Once you complete, the house is all yours; you will get the keys and can move in any time you want. If the seller remains there a day or two after completion, it has to be with your permission.

Once you know the completion date, you can book movers to help you move.

I hope you find this post useful on your journey to being a homeowner.

Till next time.

Love,

Ronke O.

Published by ronkeodewumi

I am a Chartered Accountant (ACMA, CGMA) and seasoned Management Consultant with about 16 years of experience driving the delivery of strategic solutions to complex problems of global firms. Through my blog, youtube channel, social media, tailored courses and downloadable material, I share information, resources and tips to help you manage your money better, grow your business, progress in your career, thrive in difficult times and create a life that is safe from failure, while being the best version of yourself. You will also find here links to my youtube videos where I share more nuggets to help you achieve and live your dream life. I am based in London, United Kingdom and always happy to connect with you via email (ronkeodewumi@gmail.com), social media or my contact page here.

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