An 8-Step Guide to the Homebuying Process in the UK
by Megan Addy – Director | Independent Mortgage & Protection Adviser @ Prism Mortgage & Protection Advice
Whether you’re buying your first home or up-sizing, each purchase is a milestone event. As an experienced Mortgage & Protection Adviser, I’m here to guide you through the homebuying process, ensuring you feel confident and informed every step of the way.
1. Assessing Your Financial Health
The first step on your journey is to evaluate your financial situation.
Understanding your finances is essential before you dive into house-hunting. It’s wise to speak with a Mortgage & Protection Adviser as early as possible. In our initial meeting, we will take the time to understand your needs and circumstances, providing you with a clear indication of how much you might be able to borrow.
Come prepared to this meeting.
Bring detailed information about your income and expenditure. If you can, download and review your credit report beforehand*. Your credit history is crucial as it influences the mortgage rates you’re eligible for and the amount of deposit you’ll need to secure your home.
2. Securing an Agreement In Principle
Securing an Agreement In Principle (AIP) should be your next step.
This crucial process involves a lender reviewing your financial details, such as your income, debts, and credit score, to determine how much they might be willing to lend you. An AIP provides you with a realistic budget and demonstrates to sellers that you are a serious buyer.
Choose a whole-of-market Mortgage Adviser.
While you might be tempted to go directly to your bank for an AIP, opting for a whole of market Mortgage Adviser offers significant benefits. We have access to a broader range of mortgage products beyond what your bank can offer. This means we can compare different lenders to find the most suitable products, tailored to your specific financial situation.
Why does an AIP matter?
Most estate agents will ask to see your Agreement In Principle before allowing you to view properties. Having an AIP not only confirms that you are looking at homes within your budget but also solidifies your status as a credible buyer.
3. Finding Your Perfect Home
Now comes the fun part: house hunting!
Start by listing out your needs and wants, like the number of bedrooms, essential amenities, preferred locations, and commute times. Utilise online property portals (such as Zoopla and Rightmove) and work with estate agents to find homes that fit your criteria.
4. Making an Offer
Once you’ve found a property you love, it’s time to make an offer.
The estate agent will submit the offer to the seller on your behalf and negotiate terms. This stage can be nerve-wracking, but remember to stick to your budget and consider any upcoming costs like renovations or furniture. Read our blog – “How to make an offer: Top 5 tips for First Time Buyers” – for more tips.
5. Applying For Your Mortgage
With your offer accepted, it’s time to secure your mortgage.
As your Mortgage Adviser, I will finalise my recommendation which will be tailored specifically to your needs and priorities. I will also handle the mortgage application process for you. As part of the application process, the lender will conduct a valuation to ensure the property’s value matches the price you’ve agreed to pay.
Consider a more detailed survey.
It’s important to note that lender valuations are typically basic. For greater peace of mind, consider commissioning an additional survey, such as a RICS (Royal Institution of Chartered Surveyors) Level 2 or Level 3 survey. These more comprehensive surveys can uncover potential issues that might affect the property’s value or your enjoyment of it.
Receiving your Mortgage Offer.
Once your lender is satisfied that you are a suitable borrower and the property offers adequate security for the loan, they will issue a Mortgage Offer. This offer is usually valid for 6 months, giving you ample time to complete the homebuying process.
6. Appointing a Solicitor/Conveyancer
Your solicitor or conveyancer plays a crucial role in the homebuying process.
They are typically instructed at the same time you apply for your mortgage and are responsible for handling the legal aspects of your purchase. This includes managing the conveyancing process, which includes conducting property searches, dealing with the Land Registry, and transferring the funds to finalise your purchase.
Advocating on your behalf.
Importantly, your solicitor or conveyancer works solely for you – the purchaser. Their job is to ensure that you know exactly what you are buying. They will identify any legal issues that might need immediate attention or could impact the property’s value in the future. This could include checking for planning permissions, potential disputes, or any other legal encumbrances that might affect your ownership.
7. Protecting Yourself, Your Loved Ones and Your New Home
Securing your new home involves more than just a purchase; it’s about safeguarding your future.
As your Mortgage & Protection Adviser, I’m here to help you understand the best ways to protect your property and ensure the financial well-being of you and your loved ones.
Tailored protection planning.
Together, we’ll review your needs, priorities, and budget to find the right protection solutions. This step is crucial in ensuring that any coverage you choose fits comfortably within your financial plan.
Your peace of mind.
Choosing the right protection isn’t just about policies – it’s about peace of mind. Options available include Life Insurance, Critical Illness Cover and Income Protection. Buildings Insurance is a legal requirement of your new mortgage, and it’s always advisable to protect your contents, too.
8. Completing the Purchase
The final step is Exchange and Completion.
The Exchange of Contracts legally binds both you and the seller to the transaction. On the completion date, the remaining funds are transferred from your solicitor to the seller’s solicitor, and you officially become a homeowner. You can now collect the keys and move into your new home!
Conclusion
Buying your first home or next home is an exciting time, but the homebuying process can feel like a minefield. Remember, you’re not alone. Professionals like Mortgage & Protection Advisers, solicitors, and estate agents are here to help you navigate this journey smoothly.
Ready to take the first step towards securing your dream home? Contact our experienced mortgage advisers today. We’re here to help you navigate the homebuying process – We’ll be with you every step of the way.
Your Home (or property) may be repossessed if you do not keep up repayments on your mortgage or any other debts secured on it.
A fee may be charged for mortgage advice. The exact amount will depend on your circumstance.
Conveyancing services are not regulated by the Financial Conduct Authority.
*Try it FREE for 3- days, then £14.99 a month – cancel online anytime. The above Check My File link is an affiliate link. Prism Mortgage & Protection Advice will receive a referral fee of £12 per new registration from Check My File. Please refer to the Check My File terms and conditions for further information relating to their services: https://www.checkmyfile.com/terms.htm.