3 Things First-Time Home Buyers Need to Know

Sean Jones
Sean Jones
Senior Associate Operations Manager - Private Client

Buying your first house is an exciting time: You’ve found the house you want. You’re imagining what it’ll be like living there, and your head is filled with ideas about what you’ll do to the place once it’s yours.

But, when the excitement dies down, the reality of buying your first house starts to kick in.

Buying a house has officially been listed as one of the most stressful life events a person can go through, even topping bankruptcy and divorce!” – Mortgage Advice Bureau

How do you start the process? What do you need to do? What do you need to know?

This article will give you the basics, but if you need more advice talk to our specialist, first-time buyer Conveyancing Solicitors.

Call now 0808 134 9750 or Get Conveyancing Quote

1. How Much Deposit Does a First-Time Buyer Need?

To secure the house of your dreams, you’ll need to pay a deposit. This shows all parties involved in the purchase that you’re committed to the sale.

The amount of deposit you’ll pay will depend on the value of the house. The more the property costs and the more you have to borrow to pay for it, the higher the deposit will be.

But, generally, the amount of deposit you’ll have to pay will be around 15-20% of the purchase price, depending on the lending requirements of your chosen bank or building society.

To give you an idea of what that might look like in monetary terms, in 2021, the average first-time buyer deposit in the UK was around £53,935.

2. What’s the Step-by-Step Process of Buying a House?

Once you’ve established that you can afford the deposit on the property you want to buy, the buying process can begin.

There are usually eight steps to buying a house:

Step 1: Get a Mortgage in Principle

Unless you can afford to buy it outright, you’ll need to get a mortgage to help you purchase the house of your dreams.

A mortgage is effectively a long-term loan from a bank or building society that you pay back each month. An Independent Financial Adviser (IFA) or a mortgage broker can help you find a mortgage that suits your circumstances. The average mortgage lasts for around 25 years, although it can last up to 40 years.

To secure a mortgage for the property, you’ll need to apply and show your chosen mortgage provider that you a) can afford to pay the deposit, and b) are earning enough money to pay their loan back.

If your mortgage application is accepted, you’ll get a Mortgage in Principle (MIP). This tells you how much money your mortgage provider is likely to lend you and the interest rate you’ll have to pay.

Step 2: Make an Offer

The next step in the home-buying process is to make an offer, usually through the estate agent.

You’re in a great position as a first-time buyer because you can move quickly once the sale has been agreed.

This puts you at a significant advantage over someone who has a house that they need to sell before they can move. This means, depending on how the housing market is performing, you might be able to offer less than the asking price. If the seller rejects your first offer, you can always offer more.

Step 3. Secure a Mortgage Offer

Once your offer is accepted, you’ll need to secure a formal mortgage to confirm that you can afford the property. This process can take at least three weeks, but if you have a Mortgage in Principle in place, this is likely to speed things up.

Your mortgage provider will need to value the property you’re buying to make sure that it’s worth what you’re paying for it.

If they value the property at a lower price, it’ll mean you won’t be able to match the asking price or the offer you originally agreed. If this happens, you may need to go back and renegotiate the sale price with the seller.

Step 4. Instruct a Conveyancing Solicitor

Whilst you’re getting your mortgage sorted, you’ll also need to get yourself a Conveyancing Solicitor.

We’ll cover how to choose the right Conveyancing Solicitor in the next section. But your Conveyancing Solicitor is key to making sure that the buying process goes as smoothly as possible.

It’s their job to make sure that:

  • the purchase of the property is entirely legal;
  • they conduct property-related searches to make sure you know exactly what you’re buying, where the land boundaries are, and if there are any other obligations that you need to fulfil;
  • you sign and complete all the necessary documents;
  • the details in the purchase contract are all correct;
  • a completion date is agreed;
  • all money transactions between you and the seller are dealt with properly.

Step 5. Arrange a property survey

While your Conveyancing Solicitor is progressing with the purchase process, you should get a property surveyor round to check that the house is structurally sound. If your surveyor finds significant structural problems that are likely to be expensive to fix, then you can use this as an opportunity to renegotiate the price of the property to cover the cost of fixing the issues.

Step 6. Finalise the offer and mortgage

If everything goes to plan, this step is where you contact your mortgage provider and tell them you want to proceed with their mortgage offer. They’ll send you a binding mortgage which gives you seven days to mull the mortgage over and make sure that you’re happy with it. If you are, accept within seven days and move onto the next step.

If you’re having second thoughts at this point, it’s still possible to pull out of the sale because you haven’t exchanged contracts: Take your time with this step.

Step 7. Exchange contracts

When you get to this stage, you can start to relax a little because you should receive the contract for the sale of the house. Go through it with your Conveyancing Solicitor to make sure that all the details are correct and that you’re happy.

Once the contract has been signed by you and the seller and the formal Exchange of Contracts has taken place, you’re committed to the sale and you’ve reached the point of no return: If you pull out of the sale, you’ll lose your deposit. If the seller pulls out, they’ll be liable for the costs you’ve incurred.

Step 8. Complete the sale

Once contracts have been exchanged, your Conveyancing Solicitor will give you a document that will state how much money you’ll need to pay on or before the agreed completion day. They will then contact your mortgage provider to get the funds for the property released.

Then, they’ll send this money to the seller’s Conveyancing Solicitor. Once they’ve confirmed they have received this money, they’ll confirm that you can collect the keys to your new home. Congratulations! The house is now legally yours.

3. How do I Choose a Good Conveyancing Solicitor?

As you can see, buying a house can be a long, stressful and complicated process. This is why you need to choose your Conveyancing Solicitor carefully. You need to make sure that whoever you instruct to help you buy your house will:

  • put your interests first;
  • communicate with you throughout the entire process;
  • give you sound, jargon-free legal advice.

You need to understand exactly what’s happening during every step of the process, so these things are incredibly important. Look at client testimonials and listen to word-of-mouth recommendations.

If you’d like to find out how our Conveyancing Solicitors can help you with the purchase of your first home, meet the team and give us a call on the number below. We can talk through your situation, work out some options and see how we can help.

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