Buying a house or flat can be daunting, especially for first-time buyers. From mortgage deals to the legal side, there’s a lot to think about. 

Saving a mortgage deposit

You will need a deposit of at least five per cent of the price of the home you want to buy. For instance, if you hope to purchase a property valued at £300,000 it would mean paying £15,000 up front. You will have to borrow the rest of the money from a bank or building society and make monthly mortgage repayments with added interest. Most buyers rely on a mortgage to purchase a property unless they are cash buyers.

The bigger your deposit, the less you need to borrow. A lower loan-to-value ratio means you’re likely to get a better mortgage deal. If you are a first-time buyer, you can use a lifetime ISA (Individual Savings Account) to help save for a deposit. You can put in up to £4,000 each year and the Government will add a 25 per cent bonus, up to £1,000 a year. 

The government’s Help-to-Buy mortgage scheme means more buyers with as little as a five per cent deposit can access 95% mortgages. The scheme, which runs until December 2022, includes new and existing properties priced up to £600,000.

Finding the best mortgage deal

Most mortgages last between 20-35 years. Longer-term mortgages usually mean lower monthly mortgage repayments which can make them seem more affordable. Be aware that if you opt for a longer term, you will pay more interest over the lifespan of the mortgage.

The decisions you make at this stage of the process could cost – or save you – tens of thousands of pounds. It makes a lot of sense to use a mortgage broker to find the best deal for you rather than simply getting a quote from a couple of banks or building societies. Brokers can look at the full range of mortgages in the market as opposed to an individual bank or building society’s products.

Get mortgage offer

While you can’t apply for a mortgage before buying a home, you can get a mortgage Agreement in Principle (AIP). This confirms the mortgage provider is willing in principle to lend you a certain sum. Applications are usually made online with a reply from the lender in minutes if you have information handy on your income and outgoings.

Having an AIP shows estate agents and sellers that you are a serious buyer able to get together the money you need to buy the property. Plus, it’s only after you know how much a mortgage provider is willing to lend that you will know the price bracket of properties you can afford to buy. 

House hunting

Chances are you will already have spent many hours browsing property websites, such as Rightmove or Zoopla. If you want to move to a new home close to your existing property, there’s less to consider as you already know the area. But if you are moving to a new city or different part of the country, make sure to research the area surrounding the house. Check out the league table of local schools, the crime statistics online as well as transport links.

When you have chosen the location (or locations), register with local estate agents. Keeping in touch with estate agents should boost your chances of buying a home as they may contact registered buyers before listing a property online. Try to visit as many properties as possible in your price range.

Viewing properties in person may uncover problems which aren’t likely to be highlighted in estate agent photos. Think broken taps, nicotine-stained ceilings and cracked walls.

Making an offer

Once you have found somewhere you want to buy and are confident it’s within your budget, it’s time to make an offer to the estate agent. This can be done either over the phone or in person. It used to be typical to offer less than the asking price. But in the current market you may need to offer the listed price or more to be in with a chance of sealing the deal.

Researching how much similar properties in the area have recently sold for will give you an idea of its value, so you don’t offer too much. This information can be found on the Land Registry website and Zoopla.

Mention any points in your favour, such as if you are a first-time buyer or have already sold your property, so are chain-free. Time is of the essence. If your offer is accepted by the seller, hurrah! But remember the deal isn’t sealed until you have exchanged contracts. So, what’s the next step?

Hiring a solicitor

When you are ready to make an offer, hire a solicitor to handle all the legal work involved in transferring ownership of the property. This part of the process is known as conveyancing. You can also use a conveyancer who might not be a fully qualified solicitor but who specialises property law.

In England and Wales, the solicitor or conveyancer will carry out local searches on your chosen property, asking for information from bodies such as the local planning authority and Environment Agency as well as drafting and checking contracts, dealing with the Land Registry and paying any stamp duty. The process differs slightly in Scotland.

With Local Conveyancing Direct, you can find the nearest conveyancer and compare costs. The golden rule is to shop around. Don’t simply hire a solicitor suggested by the estate agent.

Applying for a mortgage

Ideally, you will have got your finances sorted before making an offer. If so, the next step is to go back to your chosen lender and submit a mortgage application. Get all the necessary information together - a form of ID, past three to six months of bank statements, P60 tax form, utility bills, proof of benefits (if you receive them) and contact details for your solicitor, estate agent and seller. All lenders will run a credit check to make you’ve no history of defaulted payments or bankruptcy. Before applying for a mortgage, check your credit history and make sure you can explain any blips that have occurred over the last few years.

You will also need to decide the type of mortgage you want, for instance a tracker or fixed rate and the mortgage term (how long you will take to pay it off). A formal mortgage offer is confirmation that your mortgage application has been checked and approved. When you’ve got a mortgage offer, you are well on your way to buying a new home.

Commissioning a property survey

Before approving your application, a mortgage lender will carry out a valuation to check the property is worth the price you plan to pay.  Don’t confuse this with a building survey as it will only involve the briefest of looks at the property, if at all. In contrast, a more thorough property survey assesses the condition of the building, lists any structural defects and offers advice. If a  survey highlights any major defects, you may choose to pull out, ask the seller to fix the issue or try to negotiate down the agreed price.

A survey is optional but it’s a good idea to be aware of any issues before buying, so you can make an informed decision and budget for any repairs. Use this website to find a surveyor in your area and get instant estimates to compare costs.

Exchanging contracts

You and the seller will be sent identical contracts to sign. When the buyer and seller’s solicitors swap signed contracts, the deal becomes legally-binding and you can breathe a big sigh of relief. The chances of the sale falling through are now very slim. On the day you exchange contracts to buy your new home, you will give 10 per cent of the property value to the seller. This is known as the exchange deposit. If you pull out of the purchase now, you will lose that money, so don’t exchange contracts until you have your survey back and and all the local searches are done.

Complete and move in!

Congratulations – you are at the finish line! On completion day the rest of the agreed purchase price will be transferred to the seller and you can collect the keys and move in.  Completion usually takes place between two to three weeks after exchange of contracts, but this can be flexible. Use the time between exchange of contracts and completion, to research removals companies. Remember to take out building insurance for your new home from the date of completion. Your solicitor/conveyancer usually pays any stamp duty on your behalf as well as registering the change of ownership with the Land Registry.

Now you can start to enjoy your new home – and maybe even pop open a bottle of champagne. You have earned it!

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