Six steps to buying your first home

If you’re a first-time buyer, here’s a quick look at six key steps in the process of owning your own home:

1. Save for a deposit

Twenty five pounds in notes

Building up your deposit can be one of the biggest challenges to getting your foot on the property ladder, but it can be made easier with a little planning.

Start by figuring out how much you need to save each month, as the size of your deposit is likely to affect how much a mortgage provider is willing to lend you to buy your first home.

The general rule is that the more deposit you have, the cheaper your mortgage rate is likely to be. It can also be useful to check your credit report to see if you need to improve it in anyway before starting your first home mortgage application.

There are plenty of online tools which can give you a guide on how long you’d need to save for a deposit, depending on the price of the house and the percentage of its value that you’d need to put down. Take a look at our guide on deposits for more information.

How much deposit will I need?

Which? suggests that home buyers will need a minimum deposit of five per cent of a property’s value to get a mortgage in the current market.

2. Make an offer

Woman on a phone

Once you have found the house you’d like to buy, it’s time to make an offer. This must be made to an estate agent if the seller is using one.

It’s worth bearing in mind that an offer isn’t legally binding in the UK until official contracts are exchanged .

When making an offer

Buyers can make an offer 'subject to contract', which means the price can still be negotiated in the case that, for example, a survey finds a problem with the property.

3. Apply for your mortgage

Mortgage application form

A mortgage is a loan taken out to buy property or land, and most last for 25 years, but depending on the term and type of mortgage, it could be shorter or longer.

It is secured against the value of your new home until the full amount is paid off, and usually falls into two categories:

  • Fixed rate: The interest stays the same for a set amount of time, usually between two and five years. After the fixed rate period ends, your mortgage will go onto a variable rate.
  • Variable: The interest rate can change at any time, depending on the current market.

4. Carry out a survey

Man outside a house

Your mortgage lender is likely to ask you to carry out a valuation of your potential house as part of the mortgage application process, but this only looks at the value of the house rather than the condition.

It can be wise to make sure the property is in good standing order before you make your buy. Most surveyors carry out two types of surveys:

  • Full structural survey: Suitable if a property is large and is more than 50 years old, or if you have any doubt about its condition.
  • Intermediate or ‘HomeBuyer’s report’: Gives a report on the condition of the parts of the house that are easy to see and check. This is more suited to properties built in this century which seem reasonably sound.

5. Choose a conveyancer to handle paperwork

Man outside house

Conveyancers can guide you through the house-buying process and can identify what you need to do at each stage of your journey. Many people employ them as soon as they have finalised a mortgage and have put their offer in.

They will carry out investigations and searches on your behalf, and provide findings to your mortgage provider. If any legal problems are found, they can advise on the steps to take next.

Conveyancers usually complete the purchase for you and arrange a binding agreement, a contract between you and the house seller, as well as a date for the purchase to complete. Many solicitor firms offer a conveyancing service.

6. Insure your new home

Couple looking at a laptop

Once you own your new home, it’s important to have buildings insurance cover in case of any unforeseeable damage or repairs. It’s a condition by many lenders, so not having an insurance policy in place could affect your mortgage.

There are two main types of house insurance:

  • Buildings insurance: Covers damage to the structure of your home, like walls, floors and the roof.
  • Contents insurance: For belongings such as furniture, TVs, kettles etc.

Both types of insurance can be sold separately, or you can get them as part of one policy, like our combined buildings and contents insurance package.

Find out more about Home Insurance from Swinton...

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