First time buyer - timeline and advice
Having just bought our first house I can tell you it can be confusing if you don't know when certain things need to happen. How can you put an offer in if you don't have a mortgage? How do you know how much mortgage you need if you don't have an offer accepted? When do you pay and how does it all work? Here is how we did it and this worked really well.
Save
Get your deposit sorted. House prices change all the time but keep your eye on costs and build up your deposit. I had 10% saved up and used that alongside mortgage calculators (see links in below item) to work out what we could borrow and afford to pay each month. This works the other way too and they can help you work out how much you need for a deposit.
There are schemes which require only a 5% deposit (Help to Buy) but it is advisable to save up before approaching this scheme too. Remember, you will have to afford mortgage payments and payments to the provider too.
Also bear in mind additional costs such as solicitor fees. This will include any stamp duty you may need to pay on a property (currently on residential property of £125,000+ in England and nothing to pay in Scotland). This amount is calculated by your solicitor an added to their overall fees. For guidance, our solicitor fees came in at just under £3000. That included stamp duty and fees such as land registry searches and local council checks.
Make sure you have some money for kitting out your house with furniture and appliances too. Start buying small things that you can store until moving day and be prepared to make the bigger purchases nearer the time.
Be prepared
Before you get your mortgage build a file of useful things. Banks/building societies and solicitors need things like proof of ID and funds. Get a statement showing your deposit funds, make sure you know where your passport (or other ID) is and get at least your last three pay slips to prove regular income. This will save you searching when you need it and will ensure you are prepared with less to worry about.
The mortgage
The word 'mortgage' comes from the old French term 'dead pledge'. Charming. Now you know why that seems so daunting. You can find out how much you can borrow online. Most banks/building societies have calculators on their websites where you fill out information and it works it out for you. I have provided the links to some below but there are more so do your homework:
Some banks provide special rates for existing customers so it might pay to go with your current account/savings provider. However, this may not always be the case.
Once you have found a rate you like, and know how much you can borrow, you can contact the provider to agree the sum 'in principle'. this means you agree to the maximum loan available with the provider. Often this can be done online or over the phone but can be done in branch too.
This figure can be adjusted at any time so once you know how much your property costs you can speak to your mortgage advisor and adjust the figure accordingly. Obviously you can;t go above your maximum agreed amount but if it comes in under this then you can agree the final amount.
Be warned though, there is a time limit. Rates can fluctuate so you may only have around 90 days to find a property before you have to do this again. Depending on circumstances you may get an extension, but that will depend on discussion with your mortgage provider.
Search for a house
My favourite app and website became Rightmove as I found it so easy to use. Zoopla is also good and there are others. Also, you can go to your local estate agent directly.
Work out where you want to live, if the houses there are affordable and if it is worth it (e.g. no long or expensive commutes to work).
Then comes the fun bit. Book your property viewings and have a good nosey around other people's house. Good estate agents won't pressure you into making an offer so don't feel bad about saying no. It is only once you start looking around that you will know what you really want from a property. Open days are also great for viewing properties and are becoming more popular.
Depending on the type of property you will need to bear in mind leasehold and freehold. Usually a house is freehold which means you will own the land it sits on too. This is good because once you have bought it then all the land is yours and your responsibility and means you have to do the up keep but don't have to shell out to a land holder for works. Leasehold is usually on a flat as the building is communal and there may be communal space that needs to be contributed too. This is usually an annual charge so you need to keep this in mind when buying.
You put in an offer with the estate agent and they pass this on to the vendor. You don't have to pay full asking price if you don't think a property is worth it so you can look at properties just out of your price range as you may still have an offer accepted.
Be warned! If you do this then gazumping still exists as it is immoral but not illegal. this is where your offer is accepted but someone puts in a higher offer which is then accepted.
There is no legal obligation on the buyer or seller until you exchange so either can pull out at any time.
Solicitors
Some find this daunting. Ask for recommendations from friends and family or even the estate agent. Most estate agents have a working relationship with a specific firm or individual solicitor and this can help speed up communication.
Once you contact a solicitor they give you an estimated breakdown of costs (including stamp duty). Ours was really good and everything was done electronically. There were a few forms we had to print and post back once signed but some were documents we just uploaded or had to read. Each solicitor will have their own way of doing things though.
Some things to look out for are 'joint tenant' and 'tenants in common'. 'Joint tenant' means that the money is an equal share and 'tenants in common' is when you declare a split, like 60/40, and protects your share if you split up (basic description).
Exchange
Your solicitor will deal with the paper work and contact your mortgage provider for electronic transfer. All you do at exchange is pay the deposit. You may need to chase to get to exchange so ask your solicitor for regular updates.
Once you exchange you have an average of one to three weeks until you complete. At exchange, both parties have a legal obligation to buy and sell the property.
At this stage you also have to have home insurance in place. You can use a comparison site (as linked below) or go direct. Remember, some places aren't on comparison sites so an internet search may give you more options.
Completion
On the day you pay your final solicitor fees. Monies usually need to be received by 15.00 (3pm) to complete same day and transfers can take a couple of hours (this goes for exchange day too).
Once all payment is confirmed the estate agent will let you know when to pick up the main door keys (window and other keys are usually left somewhere secure in the property).
Then it is up to you when to move your stuff in (make sure you have enough money to cover van hire, etc.)
Other hints and tips
As soon as you move in, take meter readings. Also, if you have a camera/camera phone, take a photo as proof. As soon as you can phone the utility company with the reading to say you are taking over the account. Your solicitor should have found out who the existing provider is so it should be easy. Then, if you want a new provider, search online or use uSwitch for a new one for gas and electricity (hint: it can be cheaper to have the same provider for both and you sometimes get added extras like vouchers for doing this - we got a £50 Amazon voucher). Water has to be whoever serves your area (e.g. I live in Hampshire so it is Southern Water). Ofwat can help you if you are unsure who this is.
If you're a first time buyer then you might come from rented accommodation and have furniture/appliances to take with you. If you don't you can go to charity furniture stores. We got our sofa/chairs and dining room set from British Heart Foundation and it was inexpensive and they delivered. Shop around for things like washing machines. Places like AO can deliver next day and sometimes they will install for you too. You can get some online exclusive deals too so that helps.
Make sure you have a TV license before you move in. Even if you stream TV from the internet you have to have one. Go to this website to set up the payment scheme that works for you: tvlicensing.co.uk
Shop around for internet providers. Some offer vouchers and other incentives. Look for the fastest and cheapest internet online or via comparison sites. To get you started the ones are Sky, BT, Virgin and Plusnet. You can get bundle packages for phone and TV too and they'll give you a new number if you don't know it.
I mentioned home insurance earlier. This needs to be buildings and contents insurance to be fully covered and, as mentioned, you need to do your homework to get the best cover at the best price.
(Little tip for using comparison sites as I have mentioned throughout...the best deal may come from a company you have never heard of so look at online reviews to see if they can be trusted. Also, if you are unsure then go for a company you have heard of even if they don't offer the cheapest. Sometimes peace of mind can mean more.)
Boiler cover is often cheaper if you get it separate from home insurance. I am a member of the AA for my car breakdown and I got a member discount for boiler cover. Look for things like this to make it worthwhile. We went for boiler and central heating cover but there are loads of options so shop around. Ours also covers unlimited call outs and parts and labour and this could save a fortune.
Change of address is easy to forget. There are some things where it is a legal requirement though so make sure you do it. You will have some different things I am sure, but the main ones are:
Save
Get your deposit sorted. House prices change all the time but keep your eye on costs and build up your deposit. I had 10% saved up and used that alongside mortgage calculators (see links in below item) to work out what we could borrow and afford to pay each month. This works the other way too and they can help you work out how much you need for a deposit.
There are schemes which require only a 5% deposit (Help to Buy) but it is advisable to save up before approaching this scheme too. Remember, you will have to afford mortgage payments and payments to the provider too.
Also bear in mind additional costs such as solicitor fees. This will include any stamp duty you may need to pay on a property (currently on residential property of £125,000+ in England and nothing to pay in Scotland). This amount is calculated by your solicitor an added to their overall fees. For guidance, our solicitor fees came in at just under £3000. That included stamp duty and fees such as land registry searches and local council checks.
Make sure you have some money for kitting out your house with furniture and appliances too. Start buying small things that you can store until moving day and be prepared to make the bigger purchases nearer the time.
Be prepared
Before you get your mortgage build a file of useful things. Banks/building societies and solicitors need things like proof of ID and funds. Get a statement showing your deposit funds, make sure you know where your passport (or other ID) is and get at least your last three pay slips to prove regular income. This will save you searching when you need it and will ensure you are prepared with less to worry about.
The mortgage
The word 'mortgage' comes from the old French term 'dead pledge'. Charming. Now you know why that seems so daunting. You can find out how much you can borrow online. Most banks/building societies have calculators on their websites where you fill out information and it works it out for you. I have provided the links to some below but there are more so do your homework:
Also use the Money Advice Service for their calculator too.
Some banks provide special rates for existing customers so it might pay to go with your current account/savings provider. However, this may not always be the case.
Once you have found a rate you like, and know how much you can borrow, you can contact the provider to agree the sum 'in principle'. this means you agree to the maximum loan available with the provider. Often this can be done online or over the phone but can be done in branch too.
This figure can be adjusted at any time so once you know how much your property costs you can speak to your mortgage advisor and adjust the figure accordingly. Obviously you can;t go above your maximum agreed amount but if it comes in under this then you can agree the final amount.
Be warned though, there is a time limit. Rates can fluctuate so you may only have around 90 days to find a property before you have to do this again. Depending on circumstances you may get an extension, but that will depend on discussion with your mortgage provider.
Search for a house
My favourite app and website became Rightmove as I found it so easy to use. Zoopla is also good and there are others. Also, you can go to your local estate agent directly.
Work out where you want to live, if the houses there are affordable and if it is worth it (e.g. no long or expensive commutes to work).
Then comes the fun bit. Book your property viewings and have a good nosey around other people's house. Good estate agents won't pressure you into making an offer so don't feel bad about saying no. It is only once you start looking around that you will know what you really want from a property. Open days are also great for viewing properties and are becoming more popular.
Depending on the type of property you will need to bear in mind leasehold and freehold. Usually a house is freehold which means you will own the land it sits on too. This is good because once you have bought it then all the land is yours and your responsibility and means you have to do the up keep but don't have to shell out to a land holder for works. Leasehold is usually on a flat as the building is communal and there may be communal space that needs to be contributed too. This is usually an annual charge so you need to keep this in mind when buying.
You put in an offer with the estate agent and they pass this on to the vendor. You don't have to pay full asking price if you don't think a property is worth it so you can look at properties just out of your price range as you may still have an offer accepted.
Be warned! If you do this then gazumping still exists as it is immoral but not illegal. this is where your offer is accepted but someone puts in a higher offer which is then accepted.
There is no legal obligation on the buyer or seller until you exchange so either can pull out at any time.
Solicitors
Some find this daunting. Ask for recommendations from friends and family or even the estate agent. Most estate agents have a working relationship with a specific firm or individual solicitor and this can help speed up communication.
Once you contact a solicitor they give you an estimated breakdown of costs (including stamp duty). Ours was really good and everything was done electronically. There were a few forms we had to print and post back once signed but some were documents we just uploaded or had to read. Each solicitor will have their own way of doing things though.
Some things to look out for are 'joint tenant' and 'tenants in common'. 'Joint tenant' means that the money is an equal share and 'tenants in common' is when you declare a split, like 60/40, and protects your share if you split up (basic description).
Exchange
Your solicitor will deal with the paper work and contact your mortgage provider for electronic transfer. All you do at exchange is pay the deposit. You may need to chase to get to exchange so ask your solicitor for regular updates.
Once you exchange you have an average of one to three weeks until you complete. At exchange, both parties have a legal obligation to buy and sell the property.
At this stage you also have to have home insurance in place. You can use a comparison site (as linked below) or go direct. Remember, some places aren't on comparison sites so an internet search may give you more options.
Completion
On the day you pay your final solicitor fees. Monies usually need to be received by 15.00 (3pm) to complete same day and transfers can take a couple of hours (this goes for exchange day too).
Once all payment is confirmed the estate agent will let you know when to pick up the main door keys (window and other keys are usually left somewhere secure in the property).
Then it is up to you when to move your stuff in (make sure you have enough money to cover van hire, etc.)
Other hints and tips
As soon as you move in, take meter readings. Also, if you have a camera/camera phone, take a photo as proof. As soon as you can phone the utility company with the reading to say you are taking over the account. Your solicitor should have found out who the existing provider is so it should be easy. Then, if you want a new provider, search online or use uSwitch for a new one for gas and electricity (hint: it can be cheaper to have the same provider for both and you sometimes get added extras like vouchers for doing this - we got a £50 Amazon voucher). Water has to be whoever serves your area (e.g. I live in Hampshire so it is Southern Water). Ofwat can help you if you are unsure who this is.
If you're a first time buyer then you might come from rented accommodation and have furniture/appliances to take with you. If you don't you can go to charity furniture stores. We got our sofa/chairs and dining room set from British Heart Foundation and it was inexpensive and they delivered. Shop around for things like washing machines. Places like AO can deliver next day and sometimes they will install for you too. You can get some online exclusive deals too so that helps.
Make sure you have a TV license before you move in. Even if you stream TV from the internet you have to have one. Go to this website to set up the payment scheme that works for you: tvlicensing.co.uk
Shop around for internet providers. Some offer vouchers and other incentives. Look for the fastest and cheapest internet online or via comparison sites. To get you started the ones are Sky, BT, Virgin and Plusnet. You can get bundle packages for phone and TV too and they'll give you a new number if you don't know it.
I mentioned home insurance earlier. This needs to be buildings and contents insurance to be fully covered and, as mentioned, you need to do your homework to get the best cover at the best price.
(Little tip for using comparison sites as I have mentioned throughout...the best deal may come from a company you have never heard of so look at online reviews to see if they can be trusted. Also, if you are unsure then go for a company you have heard of even if they don't offer the cheapest. Sometimes peace of mind can mean more.)
Boiler cover is often cheaper if you get it separate from home insurance. I am a member of the AA for my car breakdown and I got a member discount for boiler cover. Look for things like this to make it worthwhile. We went for boiler and central heating cover but there are loads of options so shop around. Ours also covers unlimited call outs and parts and labour and this could save a fortune.
Change of address is easy to forget. There are some things where it is a legal requirement though so make sure you do it. You will have some different things I am sure, but the main ones are:
- Car insurance
- Driving licence
- Register at the local doctor's surgery
- Either get a new local dentist or change your address with your current one
- Notify your work's HR and payroll departments
- Your bank
- Store cards (e.g. Nectar, Tesco Clubcard)
- Online shopping accounts
- Subscriptions
- Mobile provider
- Inland Revenue
- Register to vote in your council area
- Notify the local council that you are moving and to set up your council tax payments.
Everyone's experience and needs are different, but hopefully this will have given other first time buyers some insight.
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