Buying a New Home: Timeline

Thursday, April 19th, 2018 Mortgage


Buying a new home can seem daunting, and even more-so if its your first time. Its mostly a waiting game, and I often refer to it as a game of snakes and  ladders.

There are several milestones that need to be achieved before you can officially move into your new home. The average length from start to finish is roughly 6 – 8  weeks, however this is subject to a number of conditions. Conveyancing in particular could highlight potential issues that will need to be addressed prior to a sale.

 

Save

Up to this point, you need to save as much as you can towards a deposit. You should also take into account if you’re expecting any money to be gifted to you. Opening a ‘Help to Buy’ ISA is a great way to get a free bonus 25% bonus on top of your savings. You have access to better rate mortgages with a higher deposit. 5% is the absolute minimum amount you can use to put towards a deposit.

Find a property

There are several online marketplaces that you can use to browse potential new homes. Rightmove, OnTheMarket, and Zoopla to name a few. You can setup alerts to notify you when a new property is added that meets your criteria, i.e. number of bedrooms, min / max prices. Don’t forget to research the area too. What are the crime rate statistics? Where are the nearest schools? Internet speeds?

Arrange a viewing

Once you have found a property you like, you need to call or visit the letting agent to arrange a viewing. If you have a preferred day / time to view the property then let them know. They may have additional properties that you match your requirements and may have missed.

Agree on a price

If your confident you know what property you want to purchase, you can start thinking of what to offer. The price listed by the estate agent is what the seller would ideally like to be offered, however sellers often expect to receive lower offers. If you have spotted any noticeable wear and tear in the house, this could be grounds to offer a lower amount. In addition, if the house has been on the market for while, the seller may be more willing to accept a lower amount. How much less to offer is often grounds for debate. Estate agents have to pass any offer made to the seller, no-matter how farfetched it may be. You will need to have an accepted mortgage in principle before an offer is accepted. You can use a mortgage broker or even do it yourself online.

Find a solicitor

Solicitors make sure the legality of the sale is sound and get everything pieced together for you to make the sale possible. More complicated sales, can cost more. Expect to pay between £1,000 – £1,500 for their services. They will want to see your proof of deposit and mortgage offer once you have it.

Get a mortgage

You now need to find the most affordable mortgage to suit your needs. Be sure to weigh the monthly mortgage amount against the repayment period as paying back the mortgage quicker will save you money due to less interest. You will need to setup building insurance as you will be liable for any damage as soon as you exchange contracts. You can also setup life insurance at this point, which covers you and your family in the event of death or critical illness.

Agree a move-in date

You and the seller need to agree on a potential move-in date. This should be agreed through both solicitors.

Exchange contracts

These are identical contracts that both you and the seller sign. They can often be read out to you over the phone by your solicitor

Move In

Congratulations, you made it! Time to decorate and furnish.

 

Tips

Be sure to regularly chase the status of your new home purchase with your solicitor. Your estate agent can also help by liaising with the seller directly.

Setup alerts from websites such as Rightmove to inform you when a new property is added that matches your criteria.

Check the interest rate of your Help to Buy ISA, just because your partner opened an account with the same branch doesn’t mean its still a good deal. With the accounts holding a fair sum of money, you can earn extra by saving your money in an account with good interest rate.

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