Buying Property - Simple Guide
Buying property, particularly your first property can be a daunting process.
To help Capital Fortune have summarised the key steps to buying a property in England and Wales below.
1. Securing a Mortgage in Principle Before the Search
At Capital Fortune we advise that preparation prior to both the search for a property and the search for a mortgage is the real key to success. You could spend all year looking for a property but if you cannot secure a mortgage at an affordable rate then the search process has been meaningless.
Prior to commencing the search have an idea as to your personal budget for the property. Be clear on your budget and base it on your affordability, that way if you see a property which you fall in love with, but it's outside of budget then you protect yourself from paying more than you can afford.
You can use our mortgage budget calculator to help you work out how much you can afford, our maximum borrowing calculator helps you determine how much you can borrow and our mortgage repayment calculator assists you in calculating how much the mortgage payments will be each month.
Once you have set your budget, you can then speak to your Capital Fortune Adviser who will take you through a fact find process to determine exactly what youâ€™re looking for. We will asses how much you can afford and determine the type of mortgage and type of product which best suits your individual needs.
On conducting the initial fact find your Adviser will be in a position to make an application to an appropriate mortgage lender to obtain a decision in principle. This is a non-binding decision provided by a mortgage lender but it provides a good indication that they will accept a full application for a mortgage should you wish to proceed.
On obtaining a decision in principle its then time to search for a property.
2. Planning the Property Search
Prior to the search obtain a map and circle the particular areas you like and cross out areas which you donâ€™t like. Focus your search and if possible choose specific roads which may be based on the type of property in that road, its proximity to rail or transport links, the local amenities near by, which could be bars, pubs, restaurants even local schools. Once you have focused on the location conduct a local search of Estate Agents in the area call the Agents and make an appointment to actually go in and physically see them
Meet all the Local Estate Agents
Estate Agents have a number of applicants and it is our belief and experience that those who go into an Estate Agents to physically register have greater opportunity to be contacted than those who deal with Agents simply via email or over the phone. The Agent will have a face to the voice and they will remember you.
In addition when seeing the Estate Agent you are well advanced, as you will be taking in with you, specific details on the actual roads you wish to buy in, the type of property you want and importantly in your hand you will have a Decision in Principle approval from a national lender indicating you will in principle be given a mortgage.
Do not underestimate the value in physical attendance, the demonstration of focus and your pre-approved mortgage. Agents are often messed around by shoppers and you are presenting as a serious potential buyer. You will see that you are prioritised well above other buyers when properties in your chosen areas come onto the market.
3. Property Found and Making an Offer
On finding the ideal property, always think whether it is actually right for you. Wait until the following day and if youâ€™re still excited about the purchase, ask for a second view. If you previously viewed it at night ensure you view it in the day. If initially in the day, see the property in darkness. This property will become your home and it is important you see it in all its guises.
If youâ€™re still in love with the property then make an offer. You can do this on the telephone with the Agent, but again sometimes its best to write a formal offer letter to the Agent indicating that you are interested in the property and you would like to make the following offer at a given price. Always include, subject to contract as until the legal process is fully undertaking you will not be sure what security will actually transfer with the property.
If the offer is declined think carefully before making another offer, always consider your budget and do not exceed what you had initially agreed. If you do increase your offer again use our mortgage repayment calculator to ensure that the mortgage payments will be affordable each month. If so, make a further offer.
If the second offer is declined, walk away. Never make more than two offers. The decline of both means you are being pushed past your financial comfort zone and given there are well over 30 million homes in the UK, we promise there will be another one out there for you.
4. Offer Agreed and Memorandum of Sale
If the offer is accepted the Estate Agent will let you know and will immediately draw up what is called a Memorandum of Sale.
This is an agreement between the parties and contains the details of the property, the agreed sale price, the parties full names, contact details and importantly the parties solicitors.
5. Instruct your Solicitor
It is at this stage you will need to instruct a solicitor who will represent you through the legal conveyancing process. The UK conveyancing solicitor is critical in ensuring you get the full legal title to the property and in other words you get the home that you are about to pay for.
You can speak to your Capital Fortune Adviser regarding our national panel of conveyancing solicitors or you can obtain your own quote from hundreds of solicitors nationally.
To obtain an instant no-obligation quote simply click here for our property solicitor conveyancing online source system.
Once the solicitor has been chosen, inform us that your offer has been agreed, you have chosen your solicitors and we will commence the full mortgage application on your behalf. Prior to doing so, we will confirm that your initial needs and requirements have not changed. If they have remained the same we will undertake an up to date comprehensive panel search to ensure that the mortgage product chosen for the decision in principle application still remains the best value mortgage for you.
6. Full Mortgage Application Submitted and Underwritten
We will place you on the most suitable and affordable mortgage product available on the day of application.
Once the application form has been submitted with all proofs of identification, address and income, the mortgage loan will be fully underwritten.
If the underwriters require further documentation or clarification of any issues raised in the application, they will contact us and we will liaise with the underwriters on your behalf.
7. Choosing the Valuation
Once the case has been underwritten it will be agreed subject to valuation. You will have the choice of which valuation to choose from and the guide below will be helpful in deciding this for you.
Valuation for Mortgage Purposes
Before a lender will offer you a mortgage they will require a suitably qualified valuer to inspect the property and submit a written report confirming that the property is a suitable security for the loan you have requested. This report does not necessarily give you any indication as to the condition of the property and in some cases you may not be permitted to see a copy as it is purely for the lenders purposes. If the property is new and building works are not completed, you may have to also pay for a second report to be obtained when the property has been finally completed.
This is more detailed than the basic valuation, but limited in focus and there is little comeback in the event of serious problems encountered later. This report could however, identify some defects giving you the opportunity to obtain more specialised reports and estimates. It is highly recommended that a homebuyers report be arranged in conjunction with the lender to prevent duplication of valuation costs.
Full Structural Survey
This is a thorough and complete inspection of the property carried out by a qualified professional surveyor. It can be expensive, but worthwhile given that your home is the most costly item you will probably ever purchase. It is highly recommended that this be undertaken in conjunction with the lender to prevent duplicate valuation costs.
8. Mortgage Offer
Once the valuation is back from the surveyors the underwriters will again look at the case and determine that the property is in fact good security at the price you have offered. If they agree with you, they will issue a formal mortgage offer. If they feel you are overpaying or feel that the property has some issues which may need repairing they can either reduce the loan they ware willing to lend or can offer what is called a conditional offer. A conditional offer is one whereby the mortgage lender will retain a part of the loan and will make payment of that part once any suggested works have been undertaken. This is called a retention.
9. Solicitors to Exchange and Complete
Once the mortgage offer has been issued, it is then down to your solicitors to set a date for exchange and completion.
Exchange and completion can take place on the same day but there is usually a period of time between the two dates.
Prior to exchange of the contract your solicitor will have undertaken all necessary searches on the property to ensure it is free from legal encumbrances and that you will on completion obtain good title on the property. You mortgage lender will insist that your solicitor reports to them on the title prior to drawdown of any mortgage funds.
Once the searches are complete the sale contract is drawn up and sent for signature to both the buyers and the sellers. Once the signatures are on the agreement it is a legally binding document and the seller then has the right to enforce the contract should you wish to change your mind.
Your solicitor will go through all the legal implications of failure to complete prior to you signing the exchange documents and this is the final stage where you can pull out if you have had a change of heart. Hopefully, youâ€™ve only got this far, because you absolutely love the property and exchange of contracts is one of the most exciting times of the buying process. It is at this stage that you actually know your are going to be the legal owner of the property.
10. Mortgage Completion
Within the sale contract, a date would have been set for completion. Prior to the date of completion you would have arranged to transfer your deposit to your solicitors account and the solicitor would have requested the lender for the mortgage advance funds. The combination of both your deposit and the mortgage advance should equate to the price you are paying for the property.
On the day of completion your solicitor will be responsible for sending the total monies of purchase to the seller's solicitors.
On doing so your property transaction has completed.
You can then arrange with the Estate Agents to pick up the keys and you can start moving into your new property.
11. Post Completion
Your solicitor after completion will register your ownership of your new property with the Land Registry and your property sale will be fully completed and fully registered.
Good Luck and we wish you every success in your new home!
If you require any assistance during the buying process, speak to one of our Mortgage Advisers by calling 020 77 100 400 or Enquiry Online.