The Complete Guide to Buying a House: From mortgages to moving In!
Moving house can be stressful, time consuming and expensive. For some the whole process is easy, especially if they have people around them who know what’s involved, but for others – my husband and I included – there’s a lot of unknown territory involved.
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For the past ten years my husband and I have been renting. When we first met we moved into a two bed second floor flat. We lived there for around eight years before moving onto our second rented home back in the village where I grew up.
We always knew that we wanted to buy a house together. We don’t want to rent our whole lives. There’s nothing wrong with renting and plenty of people do this, but to us buying a house means security and not just for us, but for our children too.
The main problem we faced was saving up for a deposit. We quickly learnt that we’d need a minimum of £10,000 to even start us on the right track.
How on earth were we going to save £10,000?
That’s a lot of money!
We’re close, but we’re not quite there yet and it may take another year or two before we get there, but we’re determined!
This post will hopefully give you an idea of what’s involved in buying a house.
Tips for saving a deposit
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- Find out how much you need to save. This will depend on the price of the house that you want to buy. There are lots of online calculators available which can help you to determine how much of a deposit you’ll need.
- When you know how much you need to save, the next thing you’ll need to do is determine when you’d like this amount saved by. Setting a date can help you to plan how much money you’ll need to set aside each month and you may even want to consider setting up a monthly direct debit which pays a set amount of money into your savings account each month.
- Next you’ll need to work out how much money goes in and out of your account each month. Once you know this you can work out an estimate of how much money you have left at the end of each month and then decide how much of that you can afford to put away each month.
- Buying a house is most likely the biggest investment you will ever make. With this in mind it’s worth thinking about what sacrifices you can make to help you get to your target quicker. For example, if you’re a smoker you may want to consider quitting. A pack of 10 cigarettes can cost around £5 and if you smoke 10 a day that works out as around £150 a month, which is £1,800 a year.
- Now that you’ve worked out how much deposit you need, when you want to reach your target by and how much you’re going to save each month, you need to find the best place to save your money. Savings accounts are important. You’ll need to find one that will let you pay money in on a regular basis and also an account that has a good interest rate.
- Saving for a deposit is going to take time. It may take years, but it’s important to remember the end goal.
Applying for a mortgage
Congratulations! You’ve worked hard and managed to save up enough money for a deposit. So, what’s next?
Well first up you’ll need to choose the right mortgage for you. There are lots of different types of mortgages available and it’s important to make sure you choose one that you can afford. You may want to speak to a mortgage adviser or your bank about what options are available.
It’s a good idea to write down some questions beforehand so you can find out the answers you need to know.
Once you’ve found the right mortgage for you I’d highly recommend checking your credit report. Potential lenders will check this so it’s important to make sure there are no errors.
Once that’s all done you’ll need to agree a mortgage in principle. You may need to pay a fee to reserve your mortgage so this is another cost to consider as this can be anything from £100 to £250.
Finding the right home for you
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Things to consider…
- The future – how long do you plan on living in your house? Will this reflect the type of home you buy? For example – when I buy a house I want it to be my ‘forever house’. A place where I live forever. However, some people may want their first house to be a ‘step onto the property ladder’ and with that in mind you’ll need to consider if the house is appealing enough to be sold on. You won’t to buy a house that you’ll be stuck with in ten years time.
- The area – some areas are more expensive than others so you’ll need to think about where you want to live. Other things to consider are access to local schools, shops and your commute to work time
Making an offer
So you’ve found your dream home. You have your mortgage in principle so now it’s time to make an offer. This usually happens through an estate agent.
This is probably the most stressful part of buying a house. Making a decision about how much you should offer. Start low and work your way up. Your first offer should be 5-10% lower than the asking price as a rough guide.
Once you’ve decided you’ll need to let the estate agent know your offer. It’s best to do this over the phone, but it’s also wise to put this in writing too (an email is acceptable).
If the seller is interested in your offer, you can start negotiating.
Once both sides have agreed on an offer it’s important to know that this isn’t legally binding. Until contracts have been exchanged you or the seller can pull out. Although it you do, you might lose any holding deposit you’ve put down.
Property Survey
You’ll want to ensure that the property you’re buying is worth what you’re paying for. A survey can help to offer reassurance and peace of mind that there are no major issues with the property that need to be addressed.
There are a few different surveys from basic ones which are perfect for buying a new build property, to a home buyers report, which is the most popular as this will look at the general state of repair of the building among other things such as signs of subsidence.
Conveyancing and the legal side of things
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Conveyancing is the transfer of legal title of property from one person to another. The seller is responsible for drawing up a legal contract to transfer ownership.
Make sure you’re happy with the details and if there’s anything you’re unsure of you’re solicitor or conveyancer can go through this with you.
When you and the seller are happy with the contract, you’ll both need to sign it and then send a copy to each other. Once this happens the contract is legally binding and neither party can pull out without paying compensation.
Completion
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Once the money has been transferred to the seller and you’ve had all the checks you’ve asked for completed, the only thing left to do is taking hold of the legal documents and obviously the seller needs to move out so you can move in!
Once you’ve received the keys it’s time to book your removal van and organise your utilities and council tax.
Organising your utilities
- Before you move you should let your current supplier know that you’re moving. By preparing and doing this early it’ll be easier to move your supply if you want to stay with the same supplier.
- Take meter readings from your old property on the day that you move as this will ensure that you don’t get overcharged on your final bill. You don’t want to be paying for the new occupants energy!
- When you move into your new home take meter readings.
- Find out what type of meter your new home has. Some may have a pre-payment meter, others may have an economy meter. You’ll need to know this when it comes to sorting out your supply.
- Search online for the best supplier and tariff for you
Taking out a reverse mortgage
Taking out a reverse mortgage is like applying for a regular home loan without all of the hassles and headaches because it is a more flexible way to borrow money based on your home’s equity. First, the home’s equity will be calculated. Then you can choose how much of the available balance to borrow and whether you want to receive it in installments or all at once. Another reason it is known as one of the most flexible loan types is that you choose when you pay it back. You are under no obligation to do so as long as you continue living in your house. When you take out a reverse mortgage it allows you access to funds you may need without jeopardizing your livelihood or adding to your monthly financial stress.
This post was written in collaboration with TSB. This is a sponsored post.
