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Buyer's Guide
As an estate agents in Birmingham for over twenty years, we have helped many people to find their ideal property, ranging from first time buyers to seasoned investors. That experience has allowed us to create a step-by-step guide to buying a property, as well as a checklist that can be downloaded below that will hopefully make the buying process much more straight-forward.
Step 1
Check Your Credit Score
Unless you’re a cash buyer, checking your credit score is an essential first step before even considering buying a property. Mortgage lenders need to be confident that the money they are loaning to you is going to be paid back to them and assessing your credit score is one method of determining that confidence. A credit score that isn’t sufficient in their eyes could result in your mortgage application being rejected and in turn that could reduce your credit score further.
But it’s not all doom and gloom. You can check your credit score yourself for free using a number of services and best of all your credit score won’t be harmed for doing so.
Step 2
Choose A Solicitor
Once you're satisfied with your credit score, decide which solicitor you wish to hire. They will be responsible for completing any legal paperwork involved and exchanging contracts with the seller of the property you wish to buy in order to finalise the move.
Having a solicitor in place from the beginning is crucial to ensure that once you have an offer accepted for a property and your mortgage application is successful, that you’re able to take possession of your new property as soon as possible.
Step 3
Compare Mortgage Lenders
Your bank doesn’t always provide the best mortgage rates and they certainly aren’t more likely to consider that your an existing customer when it comes to approving of your mortgage application. Additionally, the COVID-19 pandemic has highlighted how important it is to have a mortgage lender that can provide some flexibility with repayments. For example, acknowledging that if people receiving furlough payments are only being paid 80% of their wages, it is going to be more difficult for them to pay their mortgage.
Interest rates are also worth comparing and you should pay particular attention to whether those rates are going to remain fixed or if they’re going to increase later on. It may be tempting to choose a lender that offers cheaper rates initially, but if those rates are going to increase it can be harder to budget for the extra costs you’re going to incur.
Step 4
Decision In Principle (DIP)
Before you begin searching for your property, it’s crucial that you have a realistic idea of how much money a mortgage lender is willing to loan to you. This will make clear what properties you are going to be able to afford and which asking prices are going to be beyond your reach.
If you choose to skip this step, there’s a chance that you could have your offer for a property accepted but your chosen mortgage lender could reject your mortgage application. This would be devastating news and what’s more, the rejected mortgage application could reduce your credit score, meaning you could be less likely to have a mortgage application approved in the future.
Step 5
Research The Area
Now that you have your decision in principle, it’s time to start looking at properties. But before you book any viewings, we recommend that you carry out some research on the area. For example, if you have children you might be interested in finding out the standard of the schools close by. Additionally, if you have to commute to work, transport links might be essential.
With an eye on the future, we also recommend researching the historic value of properties in the area. This is because if property values in the area have experienced a consistent decline, you could end up selling your property for less than what you originally bought it for.
Step 6
Calculate Other Expenses
As well as researching the area, we also suggest calculating your other expenses before even viewing a particular property. On top of the mortgage repayments, you might be required to pay stamp duty after purchasing the property, as well as monthly costs incurred by council tax, gas, electric and water bills, buildings and contents insurance.
It might seem frustrating but conducting the research and calculations before viewing the property you’re interested in could save you a lot of time as well as prevent any disappointment.
Step 7
View The Property
Once the research and calculations are complete, it’s time to view those properties. This is usually a very exciting moment especially if you’re a first time buyer taking your first steps onto the property ladder. But while you’re day dreaming about a cosy night in on the sofa or imagining how you’re going to transform the garden, make sure to carry out your own inspection of the property.
Be mindful of any damp on the walls, rot in the woodwork or whether any furniture has been strategically placed to obscure any faults. We would also recommend checking the electricity in each room by flipping the light switches and flushing all the toilets in case there are any issues with the plumbing.
Step 8
Make An Offer & Apply For A Mortgage
When you’ve had an offer accepted for a property, apply for a mortgage with your chosen lender. During the application process, your mortgage lender in most cases will instruct their own surveyor to inspect whether the property is worth the offer you have made and whether there are any defects to the property that would prevent the mortgage lender from loaning you the money to buy the property.
If your mortgage application is successful, your solicitor will begin the necessary legal paperwork and searches which may take up to three weeks to complete. Searches are used to check if the property you want to buy is at risk and include but are not limited to, a drainage and water search, a flood risk search, coal mining searches and more recently a HS2 search.
Step 9
Exchange Contracts
Once the legal paperwork has been completed and as long as the searches conducted by your solicitor didn’t highlight any issues with the property, yourself and the seller should be in a position to exchange contracts and finalise the sale.
The next step is to arrange a completion date with the seller as well as transfer your deposit to your solicitor. As soon as the deposit has been received, you will then be required to sign a contract that makes the sale legally binding. At this point, you could lose your deposit if you decide to withdraw.
Step 10
Completion
On completion day, your solicitor will transfer funds from your mortgage lender to the seller’s solicitor. Once the seller’s solicitor has confirmed that they have received those funds, completion has legally taken place and you will be able to collect the keys to your new property from the seller’s estate agent. The day you’ve been waiting for has finally arrived!
The final step for your solicitor is to register your details with the Land Registry who will then provide your solicitor with new title deeds to your property. If you have a mortgage the deeds will be made available to your lender.
Buyer's Guide
As an estate agents in Birmingham for over twenty years, we have helped many people to find their ideal property, ranging from first time buyers to seasoned investors. That experience has allowed us to create a step-by-step guide to buying a property, as well as a checklist that can be downloaded below that will hopefully make the buying process much more straight-forward.
Step 1 - Check Your Credit Score
Unless you’re a cash buyer, checking your credit score is an essential first step before even considering buying a property. Mortgage lenders need to be confident that the money they are loaning to you is going to be paid back to them and assessing your credit score is one method of determining that confidence. A credit score that isn’t sufficient in their eyes could result in your mortgage application being rejected and in turn that could reduce your credit score further.
But it’s not all doom and gloom. You can check your credit score yourself for free using a number of services and best of all your credit score won’t be harmed for doing so.
Step 2 - Choose A Solicitor
Once your satisfied with your credit score, decide which solicitor you wish to hire. They will be responsible for completing any legal paperwork involved and exchanging contracts with the seller of the property you wish to buy in order to finalise the move.
Having a solicitor in place from the beginning is crucial to ensure that once you have an offer accepted for a property and your mortgage application is successful, that you’re able to take possession of your new property as soon as possible.
Step 3 - Compare Mortgage Lenders
Your bank doesn’t always provide the best mortgage rates and they certainly aren’t more likely to consider that your an existing customer when it comes to approving of your mortgage application. Additionally, the COVID-19 pandemic has highlighted how important it is to have a mortgage lender that can provide some flexibility with repayments. For example, acknowledging that if people receiving furlough payments are only being paid 80% of their wages, it is going to be more difficult for them to pay their mortgage.
Interest rates are also worth comparing and you should pay particular attention to whether those rates are going to remain fixed or if they’re going to increase later on. It may be tempting to choose a lender that offers cheaper rates initially, but if those rates are going to increase it can be harder to budget for the extra costs you’re going to incur.
Step 4 - Decision In Principle
Unless you’re a cash buyer, checking your credit score is an essential first step before even considering buying a property. Mortgage lenders need to be confident that the money they are loaning to you is going to be paid back to them and assessing your credit score is one method of determining that confidence. A credit score that isn’t sufficient in their eyes could result in your mortgage application being rejected and in turn that could reduce your credit score further.
But it’s not all doom and gloom. You can check your credit score yourself for free using a number of services and best of all your credit score won’t be harmed for doing so.
Step 5 - Research The Area
Now that you have your decision in principle, it’s time to start looking at properties. But before you book any viewings, we recommend that you carry out some research on the area. For example, if you have children you might be interested in finding out the standard of the schools close by. Additionally, if you have to commute to work, transport links might be essential.
With an eye on the future, we also recommend researching the historic value of properties in the area. This is because if property values in the area have experienced a consistent decline, you could end up selling your property for less than what you originally bought it for.
Step 6 - Calculate Other Expenses
As well as researching the area, we also suggest calculating your other expenses before even viewing a particular property. On top of the mortgage repayments, you might be required to pay stamp duty after purchasing the property, as well as monthly costs incurred by council tax, gas, electric and water bills, buildings and contents insurance.
It might seem frustrating but conducting the research and calculations before viewing the property you’re interested in could save you a lot of time as well as prevent any disappointment.
Step 7 - View The Property
Once the research and calculations are complete, it’s time to view those properties. This is usually a very exciting moment especially if you’re a first time buyer taking your first steps onto the property ladder. But while you’re day dreaming about a cosy night in on the sofa or imagining how you’re going to transform the garden, make sure to carry out your own inspection of the property.
Be mindful of any damp on the walls, rot in the woodwork or whether any furniture has been strategically placed to obscure any faults. We would also recommend checking the electricity in each room by flipping the light switches and flushing all the toilets in case there are any issues with the plumbing.
Step 8 - Make An Offer & Apply For A Mortgage
When you’ve had an offer accepted for a property, apply for a mortgage with your chosen lender. During the application process, your mortgage lender in most cases will instruct their own surveyor to inspect whether the property is worth the offer you have made and whether there are any defects to the property that would prevent the mortgage lender from loaning you the money to buy the property.
If your mortgage application is successful, your solicitor will begin the necessary legal paperwork and searches which may take up to three weeks to complete. Searches are used to check if the property you want to buy is at risk and include but are not limited to, a drainage and water search, a flood risk search, coal mining searches and more recently a HS2 search.
Step 9 - Exchange Contracts
Once the legal paperwork has been completed and as long as the searches conducted by your solicitor didn’t highlight any issues with the property, yourself and the seller should be in a position to exchange contracts and finalise the sale.
The next step is to arrange a completion date with the seller as well as transfer your deposit to your solicitor. As soon as the deposit has been received, you will then be required to sign a contract that makes the sale legally binding. At this point, you could lose your deposit if you decide to withdraw.
Step 10 - Completion
On completion day, your solicitor will transfer funds from your mortgage lender to the seller’s solicitor. Once the seller’s solicitor has confirmed that they have received those funds, completion has legally taken place and you will be able to collect the keys to your new property from the seller’s estate agent. The day you’ve been waiting for has finally arrived!
The final step for your solicitor is to register your details with the Land Registry who will then provide your solicitor with new title deeds to your property. If you have a mortgage the deeds will be made available to your lender.