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The Complete First-time Buyer Checklist

Buying your first property can be both a very exciting and daunting experience. With our checklist, we’re aiming to help first-time buyers get a better understanding of the steps involved in the process of making a property purchase. 

Planning and preparation for buying your first home

  • Scope out the rough figures to see if buying a property is realistic

Many first-time buyer checklists start with saving a deposit for your purchase, but if you don’t do some scoping out first, you won’t know how much you need to save or whether your borrowing power is enough to get a mortgage for the rest. It would be very disheartening to save hard for some time and then find out that you need a much larger deposit than you expected. 

There are many free online calculators that will help you find out how much you might be able to borrow from a lender for your mortgage, and your deposit will need to be a certain percentage of the property’s value. This is usually at least 10%, but there are some government-backed schemes that could have an impact on this. You can see these here.

Doing some online searches on property websites will help you to gauge current prices of homes in the areas in which you are looking, so you can see if your deposit, plus the rough amount you can borrow, will be enough to buy the kind of home that you want. 

It’s worth also noting that having a poor credit history could also have an impact on how much you can borrow, or the interest rates you are offered by lenders, so is this is something that affects you, it’s worth investigating this with a mortgage broker before you go any further in the process. 

Once you know how much you’ll need for a deposit, you can move on to the next stage of the process. 

  • Funding your deposit

Many people have to save hard for years in order to get enough money together for their first property deposit, some may have savings already, or have family willing to gift them money towards a deposit to buy their home. For some people, it may take a combination of all of these things in order for them to fund their deposit. 

It’s also important not to forget that there are other fees associated with purchasing property, such as conveyancing fees, survey costs, stamp duty (if applicable) and moving costs. 

  • Do an affordability budget

Before a lender will enable you to borrow a mortgage from them, they will need to be satisfied that you can afford the repayments, as well as your other financial commitments, so they will run affordability checks on you. The way that each lender does this is slightly different, but it’s a great idea to prepare for this by doing your own budget too. 

Note down your income each month and subtract from this all of your usual outgoings to see how much is left at the end of every month. While lenders all have different ways of doing their own affordability calculations, a general rule of thumb is that mortgage repayment costs shouldn’t exceed around 35% of the after-tax income of a household. Doing these figures at this stage can help you sense-check the price of properties that you should be looking at.

  • Get a mortgage agreement in principle

A mortgage adviser will be able to give you a more accurate idea of how much you can borrow and can help you compare mortgages from different providers to find the best deal. They’ll want to take a close look at your current credit commitments, your most recent p60 (or proof of annual income if self-employed), recent payslips and you’ll need to prove your ID and current address. 

Once you have a mortgage deal that you’re happy with, you can apply for a mortgage in principle from the lender. 

They’ll run a credit check on you to make sure that they’d be happy lending you the agreed sum. Having a mortgage agreed in principle will put you in a better position as a buyer than someone who has not already got this far into the process before making an offer on a property. 

  • Find a property you want to buy

It’s unlikely that you’ve not already been looking for suitable properties, but now is the point when you’re in a proceedable position so can make a firm offer on the home that you want to buy. 

Unless you already know the area very well, it’s advised to visit the location of the property at a few different times of day and evening, as well as looking at amenities and facilities in the local area, to make sure that it’s a good fit for your lifestyle. If you already have children or are planning to have any in the future, you may also want to consider nearby school catchment areas, as well as things such as transport links. 

  • Make an offer on the property

Once you have found a home you want to buy, you will need to make an offer to the estate agent who is looking after the sale of the property. They are legally obliged to pass every offer to the vendor. 

If your offer is accepted, you can move onto the next stage. 

If your offer is not accepted, you can consider making a higher offer if that fits within your affordability range. Alternatively, you can move on and look at other properties until you find another that you want to offer on. 

Once you have an offer accepted, the estate agent will send a contract which is not a legally binding agreement that you will buy the property, but just an agreement that you wish to proceed with the purchase at this point. 

  • Instruct a solicitor

As soon as you have an offer accepted on a property, you need to instruct a solicitor or conveyancing firm to start the legal process of buying the home. This involves various surveys and searches, and you’ll need to complete quite a lot of paperwork to ensure this process continues as it should. Your solicitor should keep you up to date with any actions you need to take.

  • Formally apply for your mortgage

Although you already have a mortgage in principle, you need to officially apply for the mortgage once your offer is accepted on the property you want to buy. Your lender will organise for a valuation survey to be done on the home to ensure that the value aligns with the amount that you wish to borrow from them. This kind of survey isn’t designed to discover any structural issues with the home, so if you wish to have this kind of report done, you will need to instruct and pay for this separately. 

  • Exchange contracts on the property

At this point, your mortgage should have been agreed with the lender, all of the legal paperwork, queries and searches should have been satisfied and you’re now ready to exchange contracts with the seller of the property. This is the point at which you are legally obligated to buy the home (as the seller is now legally obligated to sell it to you) and if you don’t go ahead with the purchase, you are likely to lose your deposit amount. 

At this point, you also need to agree a completion date with the seller, for when you can move into the property and all of the money will be moved etc. The completion date is usually a few weeks after exchange in order for all of the necessary arrangements to be made, such as hiring a moving company. If there is a chain (i.e. the people selling to you are also buying a new property, plus the people they are buying from etc) then this can sometimes take a while to find a date everyone in the chain can agree on. 

  • Completion day!

On completion day, you will receive the keys to your new home when all of the monies have been transferred as they should be. You might be moving in straight away on this day, or you could have some crossover from your current accommodation so might decide to move gradually, or even redecorate or carry out work on your new property before you actually move in. 

You’ll receive a final bill from your solicitor or conveyancing firm, which will include any outstanding fees for work they have done and any stamp duty due. 

The day that you get the keys to your home, whether moving in straight away or not, remember to take energy meter readings (with photographs if possible) so that you don’t get charged for any energy used before you legally owned the property. 

  • Enjoy your new home!