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The house buying process

From saving up for a deposit, to picking up the keys after completion, you’ll find all the stages of buying a home in this straightforward house-buying guide.

1. Decide if buying a home is right for you

There are a number of things to consider before embarking on the search for a new home – not least whether you can actually afford it. Although many people aspire to owning their home, it’s important to understand the positives and potential difficulties first.

Pros

Security
Owning your own home can give you a greater sense of security compared with renting. It’s good to know that you have a long-term place to live, and as long as you keep up with mortgage repayments, you won’t be evicted at short notice.

Finance
When interest rates are low, home ownership can be significantly cheaper than renting. According to a 2018 report by Santander, the average monthly rent in the UK is currently £912 per household, compared to monthly mortgage payments of £723. A property is also seen by many as a long-term investment, and in a rising market you could get a large return if you decide to sell down the line.

Freedom
With your own home, you can invest in the furniture you want and decorate it to your personal taste, without having to ask permission from a landlord first.

Setbacks

Responsibility
Buying a home is a big financial commitment and monthly repayments can prove difficult if your circumstances change, which is why prior financial planning is very important.

Costs
There are lots of additional costs attached to owning a home, including things like insurance and maintenance. If the boiler breaks, you’ll have to cover it.

Commitment
Some people aren’t ready to commit to owning a home. If you don’t think you’re ready or if your job situation isn’t stable current, buying a property might not be the right decision at this time.

2. Find a home you can afford

Figure out how much can afford to spend on a property before you start your search for a home and a mortgage. You can use Trussle’s mortgage calculator to find out what you could afford now based on your income (or combined income if you’re buying with someone else) and the amount you’re able to put towards a deposit.

Weigh up what’s most important you and ask yourself:

  • Is my heart set on a particular location, or am I willing to consider more affordable properties in other areas?
  • How important is it for me to live near family and friends?
  • What about the home’s proximity to transport links - what will my commute be like?
  • Do I need to consider things like the school catchment area?

Keep in mind that mortgage lenders will ask to see proof of your income and expenditure, and whether you have any debts. They’ll also want assurance that you’ll be able to keep up with your mortgage payments if interest rates rise, and may refuse you a mortgage if they don’t think you can cover the costs.

After you’ve decided how much you can afford, search the property market and shortlist a few options within your budget to get an idea of the type of home you can buy.

3. Get your finances in place

Buying a home is a lot more straightforward if you organise your finances first.

Calculate how much you’ll need to save for a deposit and plan how you’re going to do it. It’s a good idea to put money aside each month into a savings account.

In the current market, you’ll need to put down a deposit of at least 5% of the property’s value. However, the bigger the deposit the better. A larger deposit means your mortgage repayments can be smaller (depending on the length of the repayment term you choose) and you’ll have access to more competitive deals.

Next, you’ll need to start thinking about the kind of mortgage you need. We’ve written some guides to help you find out more about the different types on offer:

Remember, together with the deposit and mortgage payments, you need to factor in stamp duty, insurance, solicitor fees, and other costs associated with buying a home.

For detailed information and guidance on how to save for a house, view our Saving for a house checklist.

4. Find a mortgage

Familiarity can make it tempting to approach your bank or existing mortgage lender for a new deal. However, your choice will be limited as they won’t be able to provide you with a whole market comparison.

In order to find and compare the most suitable mortgage deals for your circumstances, you should use a comparison website or mortgage broker. Mortgage brokers have access to many deals and types of mortgage, and will provide impartial advice.

Online mortgage broker

Using a free online mortgage broker like Trussle will allow you to manage the process entirely online at a time that suits you, although you’ll also have the option of speaking with a mortgage expert by phone. Once you’ve completed an online profile we’ll compare over 11,000 deals from more than 90 lenders to find the right one for your needs and circumstances.

“A very simple hassle free process.”
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The first part of the mortgage application is securing the Decision in Principle, which is a document the lender provides confirming the amount you can borrow 'in principle', subject to standard underwriting and valuation of the property.

Loan To Value (LTV)

When you search for a mortgage, you’re more than likely to come across the term LTV (loan-to-value). This is the amount you’re borrowing compared to the overall cost of the property. For instance, if you have a £40,000 deposit for a £200,000 home, your loan (£160,000) to value (£200,000) is 80%. It’s probable that the lower the LTV, the lower the level of interest you’ll be offered.

5. Make an offer

As soon as you’ve explored the marketplace, viewed a handful of properties, and found the home of your dreams, you’ll need to make an offer before it gets snapped up.This will usually be done through the estate agent.

You can make an offer without an agreement in principle, but having one supports your offer and reaffirms you as a serious buyer with the potential to borrow the amount needed to complete the purchase. If the seller agrees to the offer then the buying process can begin.

6. Arrange a solicitor and conveyancer

As soon as you’ve made an offer on a home, you’ll need to arrange for a solicitor or conveyancer to handle the the legal process to transfer ownership of the property to you. The solicitor will need to be on the recommended mortgage lender's panel so it's important that you confirm this before handing over any money.

The solicitor or conveyancer will carry out searches with the local authority to make sure there are no fundamental problems with the property.

At this point of the journey, it’s a good idea to get a full survey completed. Although your lender is likely to have done a basic one at the beginning, this will tell you everything you need to know about the property and highlight any potential problems.

7. Finalise the offer and exchange contracts

After the survey has been completed and you’re happy, it’s time to negotiate any final details that are yet to be agreed; from the completion date to items such as white goods that the seller has said they’ll leave behind.

Your legal representative (solicitor or conveyancer) will put the terms of the transfer in writing and will notify the land registry that they’re transferring the property’s ownership to you. They’ll also liaise with the mortgage lender to ensure the mortgage is ready for completion.

Before exchanging contracts, you must pay the deposit on your new home. The move in date and the period of time between exchanging the contracts and completion can be anywhere from a day to a couple of months, depending on what stage the people buying your property and moving out of your new property are at. This is commonly referred to as the ‘chain’.

Now it’s time to start planning the practicalities of your move.

8. Completion and final steps

Completion is when the property officially becomes yours. The mortgage and deeds are transferred and you’ll pick up the keys to your new home.

But the journey isn’t over just yet. You still need to pay your solicitor/conveyancer fees and stamp duty - the payment of which will be arranged by your solicitor or conveyancer. There’s the removal costs too, of course.

Once these are out of the way, you can properly celebrate moving into your new home!