Outline of the Home Buying Process
(Also see this Flow Chart of the Home Buying Stages )
STEP ONE: What can you afford?
This will depend on:
A) Your earnings
Mortgage lenders will usually lend you 3.5 times your annual income. However it’s possible to borrow more – it totally depends on your individual circumstances.
If you are buying with a partner you can usually borrow 2.5 times the joint annual income – though there are several variations. Read more about how much you can borrow.
It can be a good idea to speak to a mortgage broker at this stage who will be able to tell you how much you could probably borrow and how much it will cost you each month.
B) How much you have saved up
For example what you’ve got in the bank or what you are bringing as profit from the sale of another property. Read more about the deposit in Costs of Buying Your New Home.
C) You also need to think about
The other costs involved in order to know what your budget is for the both the purchase and running costs of your new home. Read more about this now.
STEP TWO: Choosing Your Mortgage Type
There are usually thousands of mortgages to choose from. But you can easily narrow your choice down.
Then there are all the repayment variations like fixed rate mortgages, cash back mortgages, discount mortgages and so on.
You can read the full list at the Types of Mortgage section.
Getting a Mortgage in Principle will give you an idea of what can you afford and what type of mortgage you want. (This is a conditional offer made by a mortgage lender that – provided the information you give them is correct – they will “in principle” give you the loan).
STEP THREE: Now Start Looking.
You could use:
or even Property auctions
STEP FOUR: Buying the Property
When you’ve found your ideal property you make an offer.
If your offer’s accepted you have to move quickly to get:
A confirmed mortgage. You can use a mortgage adviser – make sure they’re truly independent. (Read more about mortgage brokers/ advisers)
A survey/valuation on the building. (Read more here)
All the legal side sorted out (This is also known as conveyancing) You can use a solicitor or a conveyancing service. (Read more about conveyancing / the legal aspect)
When all this has been dealt with you exchange contracts and agree a completion date – which is when the property becomes yours.
Congratulations. You made it !
Your Enemies: What’s Working Against You
Most home buyers encounter the following typical obstacles:
If you locate your dream home the chances are that others will also be interested in it. You might think that these guys are the opposition in the race to buy but actually the following are more likely to work against you:
The problem of getting the professionals to do their job in good time – and not hold you up. (We’re talking about lawyers / surveyors / and the mortgage lender).
(See Completing Your Property Deal for further details).
The chances of being gazumped or gazundered – depending on the current market conditions.
The chances that the property survey/valuation may reveal problems with the building – though you may not think these are such a big deal and may be able to use it to lower the price.
Problems with the chain – if you’re part of one.
Oh yes: You! If you’re not organised and efficient you’ll be one of your biggest obstacles. See how to get organised.
If you’re a first time buyer see also Your first mortgage and home for a few more things to watch out for.
Welcome to the wonderful world of home buying.
First Time Buyers Guide
- Intro / What You’re Getting Into
- Process / Flow Chart Of What Happens
- Buying Your First Home
- Be Careful Out There
- Don’t Just Grab The First Mortgage You Can
- Problem: Having Enough Money
- Guarantor Mortgages
- 100% Mortgages For First Time Buyers
- Should I Borrow Five Times My Income?
- Having Problems As A First Time Buyer? Read Some Solutions
- UK Government Help, Homebuy And Key Workers Schemes