First Time Buyer Guide
An in depth step-by-step guide.
When buying your first home, there are many factors to consider. Use our step-by-step guide to help you prepare and understand what to expect.
1 Speak with an adviser
If you’re thinking about buying your first home, it’s a good idea to chat with an expert adviser at Lifetime Planning. We’ll break down the mortgage process for you and give you a rough idea of what your monthly payments might be.
We’ll look at your savings, your income, and any monthly expenses you have like car payments or student loans to see how much you can afford. After doing a credit check, we can give you an “Agreement in Principle” for your mortgage, which shows estate agents that you’re ready to go.
2 Solicitor
You will need to instruct a solicitor to make an offer on a property for you. It is advisable to have this arranged before searching for a property so you can act quickly. This way, when you find a place you like you won’t be held up.
As soon as you spot a property you want, contact your solicitor right away.
3 Your deposit
The size of your deposit affects how much of a mortgage loan you’ll need. For most first time buyer mortgages, you need a deposit of at least 5% of the price of the property you want to buy.
The bigger the deposit, the better access you’ll have to lower rates, and lower monthly payments.
Been gifted some money for your deposit?
A gifted deposit is money that a relative gives you to help pay for some or all of your mortgage deposit.
Just remember, a gifted deposit has to be a true gift—you shouldn’t have to pay it back. You’ll need to put in writing that you won’t owe this money in the future and that the person giving you the gift won’t have any claim to the house.
4 Decision in Principle
You’ve figured out how much you can borrow and have your deposit ready. Now it’s time to get a Decision in Principle and start looking for properties.
A Decision in Principle tells you how much you can borrow and lasts for 30 to 90 days, depending on the lender. It also shows estate agents that you’re serious about buying.
To get a Decision in Principle, the lender will run a soft credit check. Don’t worry, soft checks don’t impact your credit score. They won’t show up on your credit report and will not affect your ability to apply for borrowing in the future.
5 Initial Application
Once you have had an offer accepted on a property, it is then time to submit your formal application to the lender of choice. Before you can apply, you will need to provide your adviser with the necessary documentation. The documents can vary given your circumstances and the lender but it will be things like bank statements, ID, proof of income and proof of deposit.
Your adviser will then check the documents and ensure all is in hand before the application is then formally submitted.
Legal/Conveyancer Fees
If you’re looking to make an offer on a property in England, Wales, or Northern Ireland, you’ll need to share your conveyancer’s details. A conveyancer is responsible for handling all the legal work necessary to complete the purchase of your home. Don’t forget to get a quote for conveyancing before appointing anyone.
6 Assessment
After we submit your mortgage application, the lender will review it through an underwriting process. At this time they are looking to ensure they are happy to lend to you and also to lend against your chosen property.
They will let us know which documents they need, and we will supply them accordingly. Additionally, they may ask for further documents beyond what you have already submitted, which we will then gather from you.
As well as this, the lender will contact the acting estate agent to arrange a valuation, ensuring they are satisfied with the property’s purchase price. In Scotland, this step is typically not necessary, as the lender will obtain a copy of the Home Report instead.
We will handle all communication with the lender and keep you updated regularly on the status of your application.
7 Mortgage Offer
Once you pass the affordability checks and the lender values the property, they’ll send you a mortgage offer. If you haven’t paid any product/arrangement fees upfront, you’ll need to cover them now—some lenders might deduct these fees from the mortgage amount sent to your solicitor. Your adviser will go through all of this with you well in advance.
Generally, you should get at least 7 days to think about the offer, but many lenders assume that if you go ahead with the mortgage, you’re accepting it. You can cancel your application anytime before you exchange contracts, but after that, you’re committed. Just remember, cancelling might mean losing some money if you’re far along in the process, like having already paid for a valuation or legal fees.
8 Completion
Once you’ve accepted your mortgage offer, there are really just two steps left. You’ll need to sign some contracts and get your deposit money moved over. Your solicitor will reach out to set up a time for you to sign everything and confirm your deposit transfer.
We will also put you in touch with one of our expert insurance advisers. They’ll help you find the right insurance options to support your family with mortgage payments if something happens to you, whether that’s passing away or facing certain critical illnesses.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE
This firm charges a fee of up to £795 for mortgage advice. The amount of fee will depend on your circumstances and will be discussed and agreed with you at the earliest opportunity.
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