10 step first time buyer guide
Always speak to an adviser first : The adviser will talk you through the whole process, firstly taking into account your circumstances including income/outgoings/credit history and deposit available. The adviser will then check affordability and search the mortgage market to establish what payments you would be comfortable with so you have a much better idea of your budget and properties you should be looking for.
Agreement in principle : The adviser will also get you an agreement in principle, this is sometimes called a mortgage in principle or decision in principle. This is a basic credit search with the bank to produce a certificate, which is normally valid for at least 30 days. This certificate is what the estate agent will need as proof you can get a mortgage once you find the property you want to buy.
Applying for your mortgage : Once you have found a property and have had an offer accepted you will come back to your mortgage adviser. They will search a comprehensive range of products from across the market again to check the most suitable deals available for you. Lenders do change their products regularly so the lender you have an agreement in principle with may not be the most suitable deal by the time you have found a property. Once the most suitable deal has been established, the adviser will go through the product in detail with you to make sure you understand and are happy with it. This is the point where you will need to supply documents such as proof of income, bank statements and ID. Once received, the adviser will submit the application to the chosen lender.
Arranging a survey : The adviser will also discuss survey options at this point. A lot of the lenders will include a free basic survey or valuation with the deal. This will establish whether the property is worth the price you are paying for it and may also flag up any potential issues with the property. Some banks allow you to upgrade the survey to a homebuyers or a full structural survey at an extra cost. This will produce a much more detailed report, flagging up any issues with the property before you buy it. Your adviser will explain all of the options in detail with you.
Appointing a conveyancer/solicitor : You will need to appoint a solicitor to do the legal work involved in the purchase. It is important that you pick a solicitor who is efficient and on the panel for the lender you have chosen. Your adviser will be able to recommend you a solicitor or you can pick your own, but do check with your adviser that you are able to use them before you agree to go ahead. The solicitor will send you a client pack to fill out your details and will usually need a partial payment upfront to start the work.
Mortgage Underwriting : This is where an underwriter will check the application and documents your adviser has sent, they may ask for more documents and/or clarification to check they are happy to lend to you. They will also conduct their valuation or survey. Once they are happy with the documents and the property and everything is confirmed to be within their criteria they will approve the loan.
Mortgage Offer : This is the official approval of the loan, the offer document will be sent to you, your adviser and your solicitor. It confirms the bank is happy to lend to you on your chosen property.
Organising the right protection : The adviser will then arrange an appointment with you to discuss what you will need in place to protect you, your home and your family if the worst should happen. They will discuss buildings and contents insurance which protects your home and belongings from events such as a fire or a flood. And life and illness protection to protect you, your family, your income and your home should you die, become ill or your income stop during the mortgage term. This should be set to start when your mortgage starts.
The legal bit : At this point the solicitor/conveyancer will be conducting further checks such as searches on the property, these can take a few weeks to come back and include things such as environmental searches and local authority searches, all these checks are in place to ensure there is nothing now or in the future that will have a negative impact on the property. The solicitor will also be liasing with the owners solicitor conducting enquiries and drawing up contracts. Once they are satisfied with everything they will discuss a completion date with you.
Completion : Just before completion the solicitor will request the mortgage funds from the lender and you will send them your deposit. Once this is all received it will be sent over to the owners solicitor, once they receive it then you get the keys and the property is yours. Your adviser will have started all relevant insurances and the bank will write to you to confirm when and how much your first mortgage payment will be.