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What’s involved in the house buying process?
- What’s involved in the house buying process?
- Home
Whether you’re a first-time buyer or a family moving to your second or third home, buying a house is probably going to be the biggest purchase you’ll make in your lifetime. With the average house price in the UK rocketing to £271,000 in 2021 – that’s a 10% increase over the year – the more you can understand the house buying process, the more likely you can avoid any potential pitfalls.
No doubt you will have been looking online for a property – there are plenty of online property portals to view – but in reality, the house buying process should start before you go looking for your dream home. It would be so disheartening to find the perfect place, view it and offer on it only to find that you can’t afford it.
So, we’ve set out the steps to the house buying process to help you find your next home.
Stage 1 – Find a property you can afford
Before you start house-hunting, it’s a good idea to work out what you can afford to spend on buying a house or a flat and calculate your monthly mortgage payments.
Please see our handy Mortgage Affordability Calculator
Think about costs
When you’re deciding whether a property is affordable for you, think about how you’ll cope if your income drops, or interest rates rise, and be careful not to overstretch yourself. You will also need to factor in other bills, such as heating, council tax and water rates.
When you buy a house in the UK, if the value of the property is above a certain value you must pay a Stamp Duty Land Tax (SDLT) to the government. How much you pay depends on whether you are a first time buyer, you already own a property and are buying another, you do not live in the UK, or the property/land is non-residential. Our handy Stamp Calculator below will help you calculate how much tax you will need to pay when you buy a property.
Please see our handy Stamp Duty Calculator
Choosing the right mortgage
That’s what GPM Mortgages are here to help with!
It’s never too early for you to apply for a mortgage to buy a property as it can be a time-consuming process.
Once you’ve found a mortgage product you like, if accepted you’ll get what is called a mortgage ‘in principle’. This tells you how much money the lender is likely to offer you and the interest rate you’ll pay.
Handy Tip: Before you apply for a mortgage, check your credit report for any errors and get an idea of your score. Lenders will look at it when considering your application.
Stage 2 – Make an offer
Once you’ve found a home you want to buy, the next step is to make an offer, usually through an estate agent, although it could be via the developer if it is a new property, or the owner if a private sale.
It’s worth noting here that you only pay estate agent’s fees if you’re selling property. The fees usually range from 0.5% to 3%, plus VAT, of the selling price.
Stage 3 – Arrange a solicitor
GPM Mortgages can help with this!
The solicitor or specialist property conveyancer will handle the legal work in respect of selling and buying a property. They will tell you how much you can expect to pay and they might ask for a deposit upfront.
Your solicitor or conveyancer submits search requests to the local council to check whether there is any planning or other local detrimental issues that might affect the property’s value, such as drainage problems or flood risk.
A survey is often done by the lender to make sure the property is worth the price you’re paying before they approve the mortgage. It's not an extensive survey and will not identify all the repairs or maintenance that might be needed so, it is advisable to get your own survey as well, particularly if the property is older than 20 years.
Some lenders might not charge you for the survey of a property, depending on the type of mortgage product you select.
Please be aware the Financial Conduct Authority does not regulate conveyancing.
Stage 4 – Finalise the offer and mortgage
Once you’ve found a property and had your offer accepted, it’s now time for the estate agents and solicitors to confirm this in writing and to get your mortgage finalised. It’s this stage in the process that is often the most stressful. Delays and problems can happen for a variety of reasons including:
- your mortgage application being rejected;
- the seller withdrawing the property from the market;
- the seller accepting a higher offer from another buyer (known as ‘gazumping’);
- delays on search results from the local council;
- issues with the property highlighted by your own surveyor.
When problems happen, GPM Mortgages are on hand to support and advise you, and try to speed the process up as much as possible by working with your estate agent and solicitor.
If everything has gone according to plan, GPM Mortgages will speak to the lender to finalise your mortgage.
Stage 5 – Exchange of contracts
If there are no problems or delays, you should receive the contract to sign and complete the sale, which currently takes around 8-12 weeks in the UK.
However, before signing the contract, go through it with your solicitor to check that all the details are correct. Make sure you’re happy with what the sellers have agreed to leave in the property and that all your queries have been answered.
At this stage, you and the seller are committed to the sale. The seller might also ask you to pay a holding deposit – typically £500-£1,000 to show your intent to purchase the property.
Once you’ve exchanged contracts, you’ll need buildings insurance in place to cover the structure of the property. Some mortgage companies will insist you use a particular insurer or will include it in the mortgage offer. You don’t have to agree; you are free to select your own buildings insurance provider.
Stage 6 – Completion and final steps
To complete the purchase of the property and to allow you to move in, the mortgage company transfers the money owed to buy the property, or the balance if you paid a deposit, to your solicitor. They then send it to the seller’s solicitor’s account and once they confirm it is received, the estate agent can release the keys to the property, and you can move in.
Your solicitor will register the transfer of ownership with Land Registry for properties in England and Wales. In Northern Ireland, it needs to be registered with Land and Property Services.
You’ll now need to pay your solicitor’s bill (minus the deposit and local searches, if you’ve already paid these costs). If you have sold a property as well, you will need to pay your estate agent on completion.
Buyers of residential homes have 14 days from the completion date to file their Stamp Duty Land Tax Return and pay any tax due in England and Northern Ireland. In Wales, it is known as Land Transaction Tax and is collected by the Welsh Revenue Authority (WRA). In most cases, your solicitor or conveyancer will handle this for you.
Buying your first property can be scary, time-consuming and difficult but with the help of GMP Mortgages, experienced mortgage professionals that have extensive knowledge of the mortgage industry and property market, you can rest assured that the process will be as smooth and hassle-free as possible. Call us today to get the ball rolling with your new home.
Please be aware your home may be repossessed if you do not keep up repayments on your mortgage
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Office address: Skylark Rise, Easton, Woodbridge, England, IP13 0FA
GPM Mortgages, a trading style of Gareth Marsland is an appointed representative of Ingard Financial Ltd, which is authorised and regulated by the Financial Conduct Authority.
Ingard Financial Ltd is entered on the Financial Services Register (https://register.fca.org.uk/s/) under reference 450731.
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