Buying Your First Home

Forward planning will help you make progress towards your goals and show lenders that you are prepared, which could make it easier for you to get a mortgage.

Hopefully you will have started your new home savings plan but if not, you will need to start saving. Cut down on any borrowing and make sure your credit record is as good as possible. Get your finances in order before making offers. You can strengthen your hand in negotiations if you can provide evidence of your ability to finance the purchase.

Tips:

• Build up a good savings balance - You will usually need 10% or more of the amount that the property costs to put into it yourself - your deposit.
• Remember to work out the moving costs involved in buying a property.  Opening a Monthly Saver  Account  might help you save towards your goal.
• Work out how much you can save with this Savings Calculator on moneymadeclear.org.uk
• Remember that your loans and credit card debts will be taken into consideration on the amount you can borrow so try to clear or reduce any credit card debts
• Polish up your credit record – It will help if you:
  • are on the electoral register,
  • are in steady employment,
  • have kept accurate records of your income and tax,
  • have copies of your last six months' bank statements,
  • have your last three months' payslips.

Before you start looking for a property to buy, you need to work out exactly what you can afford, try our budget calculator   

It's a good idea to talk to our team at The Loughborough about your mortgage as early as possible. To help you, we've provided a mortgage payment calculator  to help you get an idea of what your monthly mortgage repayments might be.

There are numerous costs when buying a new home, so take into consideration valuation costs, stamp duty, Solicitor's/conveyancing fees, land registry fees, mortgage arrangement fees and moving costs.

As it's one of the first questions any estate agent or property website will ask, have a good idea of the most you want to spend - a price ceiling. 

Remember also not to overlook the cost of protecting your home and yourselves.  Work out what insurance and protection you need before you set your mortage budget and don't forget the ongoing costs of bills like council tax, utilities and a TV licence.

When you are considering buying a new home, there are a number of things you may want to look at before making your decision. You may want to find a job in certain area or move to somewhere that has better schools or more green spaces.

Create a Viewing Checklist that examines what kind of home you want or the preferred location.  Do your homework to get an idea of what's available.

Compare prices and get in touch with a few local estate agents, look in local newspapers, drive around the area and search online.

One good property website that many estate agents advertise their properties on is http://www.rightmove.co.uk

When you get to the stage of looking at properties, take someone with you as they may pick up things you miss and you can discuss it with them later on and make sure you have second viewing at a different time on another day.

Here are some key points to consider when buying your new home:

• The plans and room sizes as these may be smaller than a show house
• Research the area
• Availability of a warranty such as National House Building Council Certificate or a Premier Guarantee

Remember that the estate agent acts for the seller and not for you and that a basic mortgage valuation is for the lender’s benefit and is not a full survey of property condition.

It might be worth considering paying for your own survey, but make sure you ask lots of questions, such as:

• What is included in the sale?
• Why are the sellers moving?
• What are the neighbours like?
• Are there any alterations and was planning permission required?
• How old is the boiler and when was it last serviced?
• How much is the council tax and what are the average utility costs?

Consider if there is enough storage, if the garden is too large or too small, whether the property needs updating, if the rooms are big enough for your needs, if there are any damp smells and whether or not the windows and electrics are in good condition.

When you are sure you have found the right property, it’s time to make an offer.  This is a big step and you want to make sure you are ready. Having answers to the following questions will make it easier for you:

• What is the maximum amount you can spend on your new home?
• What percentage of the property will you need a mortgage for (loan to value)?
• Have you pre-arranged your mortage with The Loughborough?
• What is your timescale for the move?
• How much are you willing to offer and how much are you willing to negotiate?
• Are any fixtures and fittings included in the sale?
• Talk to the estate agent to find out as much as possible, for example whether the seller wants to move quickly or has found a property to move to

Remember, estate agents work for the seller and are often trying to get the best deal for them rather than you.

When you make the offer, get in touch with the seller’s estate agent and tell them how much you would like to offer. If they don’t accept, you can increase the offer, but make sure it’s within your budget.

Buying a home is a complex and expensive process and, as a first-time buyer, you’ll find there’s a lot to understand.  That’s why we want to help keep the process as simple as possible.

Most lenders insist on buildings insurance  to cover the property in case the building is damaged or destroyed. You don’t have to buy it from your lender, so shop around to get the best deal for you.

One thing that is often overlooked is protecting your belongings and yourself. 

If you can’t work because of an accident, illness or redundancy, your lender will still expect you to continue paying your mortgage. There are a number of products you can buy to help with your repayments, but check out when they pay out and how long for.  Click here for further information.

You can buy contents insurance to cover the loss of, or damage to, the contents of your home, such as your furniture and electrical goods.

The legal work to transfer a property is called conveyancing.  Conveyancing is the process of legally transferring ownership of a property from the seller to the buyer.  We have teamed up with local experts Flint Bishop Solicitors to offer competitive conveyancing for our members. 

1. Starting the legal process

• Ensure that you are happy with the contract and understand it before you exchange, so keep track of what your conveyancer is doing.
• Make sure you understand what charges you will incur.

2. Arranging your mortgage

• It’s a good idea to research this as early as possible.
• If you haven't got a decision in principle from The Loughborough which outlines the amount you can borrow, you should contact us now.

3. Get a survey

• Check the building is sound.  We will arrange  a basic valuation, there may be charges involved.
• Unless you are buying a new home, it makes good sense to pay a little extra for a more detailed survey.
• If you want work done before the sale goes through, or you want to negotiate a reduction in price, ask your conveyancer to negotiate this with the seller’s conveyancer and estate agent.

4. After acceptance of the offer

• The seller’s estate agent will write to confirm this.
• On receipt, give the estate agent your conveyancer's name and contact details.
• Give your conveyancer details of the property, the estate agent, the price and your mortgage lender.
• If you don’t already have a conveyancer or a mortgage lender, you need to do this now.
• If you haven’t already, you will need to get a formal mortgage offer sorted out quickly. If you already have a decision in principle, getting a formal offer should be straightforward, subject to a satisfactory valuation of the property and status checks.
• Once you have accepted, the property might still be advertised as ‘sold subject to contract’ or ‘under offer’.  However, either you or the seller could pull out without penalty up to the point of exchanging contracts.
• When you exchange contracts, you make a financial and legal commitment.

These are the last stages in the legal process.  Exchanging contracts means that the buyer and the seller are both legally committed to the sale.  When the buyer and seller are happy with its contents, they sign final copies of the contract and send them to each other.  This is called the exchange of contracts.  Once contracts are exchanged, the agreement to sell and buy is legally binding and usually neither party can pull out without paying compensation.

1. Preparing for exchange of contracts

• Once your conveyancer has all the details they need, they will send you a pre-contract report and a copy of the registered title.
• If you are happy with everything, you need to approve the contract by signing it.

2. Exchange

• Your conveyancer and the seller’s conveyancer will swap or ‘exchange’ contracts.
• Your conveyancer will transfer your deposit to the seller’s solicitor and arrange a date of completion.
• If you pull out at this point, you could lose your deposit.

3. Preparing for completion

Ask your conveyancer what you need to do and when. Your conveyancer will:

• Check with the Land Registry to make sure the title of the property is OK.
• Prepare the Transfer Deed to transfer ownership
• Make the final arrangements for payment, including drawing down the mortgage funds for you.
• Prepare final accounts for you including details of any further money needed from you to complete.
• Once you have exchanged contracts, you are responsible for the property’s building insurance.
• Make sure you are covered in case anything happens before completion.

With all the paperwork out of the way, it’s time to move into your new home. 

Four weeks before moving:

• Have you confirmed the date you’ll be moving in?
• Have you booked time off work?
• Have you started thinking about and planning your removal?  Get more than one quote
• Does your home contents insurance cover you for the move?  If not, have you arranged for separate cover?
• Have you put together a moving pack with all the essentials you’ll need such as a kettle, mugs, light bulbs, toilet paper?
• Have you let all your telephone, utility companies, bank and other key parties know when you are moving?

Two weeks before moving:

• Have you told your local authority your new address and moving date?
• Have you redirected your post (if appropriate)?
• Have you arranged to take over the phone in your new home?  Contact the line operator to see if you can keep the line switched on and avoid any reconnection charges.

One week before moving:

• Have you packed the majority of your items?
• Do you know what time you’ll be able to move?
• Have you confirmed all details with your removal company?
• Have you asked the previous owners to show you where the gas, electricity and water meters are, and where you can find the fuse box and stopcocks?
• Are all the window and door keys labeled and easily available?

Day before moving:

• Have you packed a moving day survival kit with all you need such as tea and coffee?
• Have you settled all your bills?

Completion day checklist:

• Has your conveyancer transferred payment to the seller?  If you have a mortgage, this money will have been sent from your lender to your conveyancer.
• Have you received the keys to the property?
• Has your conveyancer received the Transfer Deed, originals of any important documents, and registered you as the owner?
• Has your conveyancer completed a tax return to pay the Stamp Duty Land Tax?  You’ll need to sign this before sending.
• Read the meters in your new and old homes.