From saving for a down payment to submitting an offer to closing, we walk you through every step of the home-buying process.
Your guide to buying your first house step-by-step
There are many moving parts to buying a home, but if you can understand the fundamentals, you’ll be less likely to get caught off guard and your home-buying experience will be a lot smoother.
There are links at the bottom of each part of this page to more information about each step of the home-buying process.
If you’d want some motivation, you can also print out the roadmap we’ve provided below and mark off each step on your way to homeownership.
1. Build a nest egg for a down payment on a home.
A down payment of at least 5% of the purchase price of the home you wish to buy is normally required. To buy a £200,000 house with a 95% mortgage, you would put down £10,000 of your own money and borrow the remaining £190,000 from a bank or other lender
However, if you’re able to put away more money, you may be able to get a cheaper interest rate on your mortgage if you have a larger deposit.
As a first-time buyer wanting to purchase a property that costs up to £450,000, you can save into a lifetime Individual Savings Account (Isa) and receive an additional 25 percent government top-up (up to £1,000 per year).
There are a few possibilities if you want to buy now rather than later…
As part of the government’s Help to Buy equity loan, you save a 5% deposit and the government lends you between 15% and 40% of the purchase price of a new-build home.
You buy a quarter to seventy-five percent stake in a property and pay rent on the rest, which is known as “shared ownership.”
Even if your parents are unable to contribute financially to your down payment, some mortgage lenders will consider your parents’ income or assets when determining your eligibility for a loan.
Find out how much you can afford to borrow in a mortgage.
The size of your down payment, your income, and your credit score all play a role in how much a lender is willing to loan you. You and your co-buyers’ finances will be taken into consideration by the lender if you’re purchasing property together.
Remember to budget for the additional costs of purchasing a property, such as conveyancing, surveys, and – depending on the price of the property and if you’re a first-time buyer – stamp duty.
The next step is to do some research on the subject matter you’ve picked.
B&Bs are great places to stay in new towns or neighbourhoods so that you may get a feel for the commute, shopping, and dining options, as well as get a sense of what the area is like.
Even if you’ve lived in the area your entire life, it’s still a good idea to do some research on the neighbourhood you’re interested in purchasing a home in.
Among the possibilities for investigation are the following:
The fourth step is to apply for a mortgage in principle
A mortgage agreement in principle (AIP) is a written agreement from a mortgage lender stating they are willing to lend you a specified amount of money. DIP (decision in principle) or a mortgage pledge are other terms for this.
If you have an AIP, the seller and their estate agent will be more inclined to accept your offer because it demonstrates to them that you have the funds necessary to purchase the home.
In a poll conducted in June 2019, eight out of ten mortgage holders who had taken out an AIP reported that it had been beneficial to them.
Make use of the services of real estate agents.
Begin by registering with local real estate agents in the locations that interest you once you’ve narrowed down your search. Creating an account is completely free and does not bind you in any way.
Keeping in touch with local real estate agents might help you find the home of your dreams, as brokers often contact registered purchasers before putting a property on the market.
In-person property inspections
In January 2019, half of the homeowners we questioned felt that ‘the feeling’ was extremely essential when house-hunting.
A lot of time will be spent on Rightmove and Zoopla, but you should also see houses in person.
A real-life look at a property will give you a better sense for how much potential (or lack thereof) it has, as well as how much of a sense of ‘home’ you feel when you’re there.
A good rule of thumb is to go back to a place multiple times, and sometimes even on various days, to see if you can see any possible issues.
If you’re thinking about purchasing a property that has not yet been constructed, check out our guide to visiting a display home.
Put up a bid on a home or apartment
Making a lower offer than the asking price is extremely frequent. However, if the home is sought after by others, you may have to go above and beyond the asking amount.
You can get a sense of the property’s value by comparing it to other recently sold properties in the area. Websites like Zoopla and the Land Registry have this information.
After deciding how much you’ll be offering, you can inform the estate agent over the phone or face-to-face, but it’s also a good idea to put it in writing.
Mention any advantages you may have, such as being a first-time buyer without a chain, and mention that your offer is contingent on a survey and the property being taken off the market. This can help you avoid being snatched from under your feet.
Apply for a home loan.
The sort of mortgage you want to apply for, such as a fixed-rate mortgage or a tracker, and the length of time you want to spend paying off your mortgage, are all considerations (25 years is the norm).
Our mortgage repayments calculator lets you see how much your monthly payments would be if you took out a loan with different interest rates, loan amounts, and mortgage terms.
Life insurance on the mortgage
In the event that you become ill or die before your mortgage is paid in full, a life insurance policy can ensure that your loved ones will not be financially burdened.
LifeSearch, one of our partners, has been helping people locate the right life insurance coverage for over two decades.
Get in touch with a representative to talk about your choices.
Find a property lawyer or a conveyancer
After your offer is approved, the legal process of conveyancing begins.
All of them are included in the legal process in England and Wales, as well as any dealings with the Land Registry or stamp duty.
It is possible to work with a conveyancer, who may or may not be a licenced attorney at law, but will undoubtedly focus on real estate transactions, or a lawyer who specialises in property law and whose credentials you should confirm.
Get a property inspection done.
Property surveys are useful in determining a building’s overall health and spotting structural issues.
Despite the fact that a survey is optional, it’s a good idea to be aware of any problems before making an offer and budgeting for any repair work that may be necessary.
As a result of a pre-buy survey, you may be able to lower the purchase price or ask the seller to address any issues.
Prior to purchasing their present house, 76% of homeowners took a poll.
A condition report, a HomeBuyer’s report, and a building survey are the three most common types of surveys provided by surveyors. The price will be determined by the property’s location, size, and type.
Your mortgage lender’s valuation survey isn’t the same as a house survey, and you should always get your own survey done as well.
House surveys, including how much they cost and where to locate a surveyor, may be found in this section of the site.
Alternatively, if you’re purchasing a brand-new home, check out our guide to snagging surveys.
Research removal companies before making a final decision.
Removal vans are available to rent if you don’t have a lot of items to move into your new home.
If you have a lot to move, removal services can make it easier – Which? It is possible to locate an honest business in your area with the assistance of Trusted Traders.
The cost of a removal service will vary depending on the number of belongings you need to transport and the distance to your new home.
Selecting one or two firms that appeal to you is a good start, but before deciding on a completion date with the seller (see below), be sure that you can move in on the day agreed upon with the seller’s availability.
Organize your home’s insurance.
In fact, most mortgage providers will require that you have a building insurance policy in place when you sign the contract for your new house.
If the building were to flood or burn down before completion (see below), you would not be covered because you are legally committed to buy the property from the moment contracts are exchanged.
If you’re purchasing a brand-new home, your insurance coverage won’t kick in until the construction is complete.
Contracts of exchange
When the legal representatives of the buyer and seller swap signed contracts and the buyer pays the deposit, the contract exchange takes place.
Many things must be ready before the contracts are exchanged. For example, you’ll need to have produced a signed mortgage offer, an agreed completion date, and buildings insurance in place from the day of exchange.
Now that the contracts for the purchase of the property have been exchanged, you may finally exhale a sigh of relaxation. It’s quite unlikely that anything will go wrong from here on out.
In order for you to pay the seller and get the deeds transferred to your own name, your conveyancer will register an interest in the property.
Take possession of your new home as soon as possible!
It’s common for a transaction to be completed within two weeks of exchanging money, but this can be negotiated with the seller.
You can pick up the keys to your new property from the estate agent on completion day and transfer the funds to your seller.
It’s now time to begin the more pleasurable chore of furnishing and decorating your new home to your tastes, and perhaps even taking a break to unwind. You’ll be deserving of it.