Buying your first home can seem like a daunting process. This quick guide highlights the 10 steps to buying your first home:
1. Get your finances in order
Before you submit your mortgage application, you will need to demonstrate you can pay back the loan and you have the finances to cover the repayments. Make regular savings arrangements, pay down any outstanding credit card balances and pay off any loans you can.
2. Apply for your mortgage
There are lots of financial products and lenders to choose from when selecting your mortgage. It's important to get the right advice and find the right mortgage. See our handy Mortgage Application Checklist which details all of the documents you will need to apply for your mortgage.
3. Get Approval in Principle
Once the lender has received your documents, and they are satisfied you meet the criteria for the mortgage, they will issue you with an Approval in Principle. This means that you have been approved for a specific mortgage amount. Some sellers may ask if you have your Approval in Principle before accepting a bid on a property.
4. Pay a booking deposit
When you find the home for you, you pay a booking deposit with the seller. This deposit holds the property for you, until the contracts and the Full Loan Offer are in place. This booking deposit is refundable if either party decides to cancel the purchase agreement. At this point you should employ your solicitor. Your solicitor will work on your behalf and review the property deeds, contracts and so on.
5. Property valuation
When you choose your property the mortgage provider will have it valued. The purpose of valuing the property is to confirm that the property value is appropriate for the mortgage approved.
6. Receive a Full Loan Offer
When your mortgage provider is satisfied with the valuation on the property you have chosen, they will issue you with a Full Loan Offer. This document confirms the mortgage amount, the term, the rate and the type of mortgage. It is also sent to your solicitor with the legal documents for your mortgage.
7. Get a structural survey completed
Although this may not be required by your mortgage provider, it is advisable that you complete a structural survey of your property. This gives peace of mind that the property you are purchasing is structurally sound and in good condition.
8. Sign your purchase contract and pay your deposit
Your solicitor will review your contract and the property deeds. Once they are satisfied, you will be ready to sign. When you sign your contract, you will then be required to pay the full deposit for the property (less the booking deposit paid).
9. Full Loan Offer conditions
Your Full Loan Offer will contain certain conditions that you must complete before closing. These conditions will include the mortgage protection cover, the property insurance, direct debit etc.
10. Close the purchase
The mortgage provider transfers the mortgage amount to your solicitor, who in turn transfers it to the seller of the property on your behalf. This process is called the draw-down of your mortgage. Once these funds have been drawn-down and have been paid to the seller, you have purchased the property. Now all that is left to do is move in!
Need help with your mortgage?
Cornmarket's Public Sector Mortgage Experts specialise in Public Sector mortgages. We offer impartial advice on lenders and financial products, to find the best mortgage for you. We're with you every step of the way in the mortgage process - from preparing your application to getting the keys. Our experts will advise you on the mortgage amount, term and the repayments and will ensure you select a mortgage which is suitable and affordable for you.
You can also check out our quick guide to what you need when applying for your mortgage.