How to start the home buying process as a first-time buyer

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How to start the home buying process as a first-time buyer

How to start the home buying process as a first-time buyer
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    The process of buying a house or flat can take many weeks or months, with several steps, including:

    1. Understand your budget
    2. Tidy up your credit history
    3. Finding a mortgage broker
    4. Getting a mortgage in principle
    5. Finding the right property
    6. Getting your offer accepted
    7. Making the mortgage application
    8. Mortgage loan processing
    9. Finding a property solicitor
    10. Property survey
    11. Underwriting
    12. Mortgage agreed
    13. Exchange contracts and complete your purchase

    Here’s a step-by-step guide so it’s clear exactly what’s required to get on the property ladder.

    Buying your first home can be an exciting but stressful process. Our mortgage brokers are here to help guide you. Get in touch with us today.

    Are you ready to buy a house?

    If you found the perfect house tomorrow, would you be able to make an offer? If the answer is no, read on to find out what other steps you may need to take.

    How long does it take to complete a house purchase for a first-time buyer?

    On average, it takes 4-6 months from the time you find a property to get a completion date for first-time buyers.

    What are the stages of the mortgage process?

    If you’ve never bought a property before, it can be a daunting process. That’s why it’s a good idea to find a local mortgage adviser, estate agent and conveyancing solicitor who can help you through everything that needs to happen to get you the keys to your new home.

    Understand your budget

    Before you do anything else, you must understand your monthly finances and work out how much you can afford to spend on your dream home. Look at the last six months’ incoming and outgoings to see how much money is available for your monthly payments on a mortgage.

    Set up a savings account so you can save for a deposit and the other costs associated with buying a house such as stamp duty, legal and removal costs.

    Tidy up your credit report

    When you apply for a mortgage, the mortgage lender will look at your credit file to establish how good you are at managing your money and therefore how much of a risk you will be as a borrower.

    If you have any missed or late payments when you pay rent, loans or credit cards, these can count against you. Spend time improving your credit rating before you approach mortgage providers so you get access to the best mortgage deals and lowest interest rates.

    Engaging with a mortgage broker

    Using mortgage brokers is a good way for buyers to access a wider range of mortgage lenders and products. First-time buyers in particular are less likely to have multiple relationships with different banks and building societies like existing homeowners to give them a choice over where to get mortgage funds.

    A broker will often be able to help in more unusual circumstances such as self-employed mortgagesjoint borrower sole proprietor mortgages or bad credit mortgages. Mortgage rates can vary a lot from lender to lender so get your broker working hard on your behalf to find the best mortgage provider for your first house.

    Mortgage in principle

    A mortgage in principle, also known as an agreement in principle is a formal document from a mortgage lender that gives the buyer a rough idea how much they would be able to borrow based on their current financial circumstances. This can show a seller that you are a serious buyer when it comes to viewing and making offers on properties.

    House hunting

    House hunting is the fun part, unless it’s challenging to find the right place at a price you can afford. Most buyers have to compromise somewhere when buying a house. You might need to look in a less expensive area or adjust your list of ‘wants’.

    Property websites are a good option but the best way to find the right place is to speak to many estate agents, explain your maximum purchase price and any non-negotiables such as number of bedrooms. Keep in regular contact with agents so you are top of mind when the right property comes on the market.

    Getting your offer accepted

    House prices are now many more times the average salary, so when you make an offer, don’t feel you have to offer the asking price – there’s almost always room for negotiation. If your seller isn’t moving on the price, you may be able to negotiate over fixtures and fittings to make the deal work for you.

    Mortgage application

    At this point, you’ll need to make your formal application. Your broker can support this process, ensuring that you submit all the necessary paperwork including bank statements, proof of employment and your deposit money.

    Mortgage loan processing

    Processing your application can take a couple of weeks or sometimes longer but your broker can keep you updated on progress.

    Finding a property solicitor

    Once your offer has been accepted, you’ll need to engage a solicitor to manage the conveyancing process for you. This includes dealing with the seller’s solicitor, Land Registry and managing the property search.

    This legal work can often slow down the process by a few weeks and you may need to chase up your solicitor to get progress updates. Don’t forget to include legal fees in your moving budget.

    House surveys

    Your lender will survey the property’s condition to ensure it is worth what you have offered. If they have concerns over the property, they may withdraw your mortgage offer.

    In addition, some buyers will instruct a surveyor to do a full structural survey before going ahead with the purchase. As the buyer, you must pay for the lender’s survey and any other house survey you undertake.

    Finalise mortgage agreement

    Your mortgage is agreed when your lender is satisfied that the property is in good condition and they have checked all your paperwork.

    Arrange house insurance

    Before you exchange contracts, you’ll need home insurance for your new property. You’ll need buildings insurance from the date of exchange but you could also choose to get contents insurance from the date you move in.

    Exchange and complete your purchase

    Once you have exchanged contracts you can expect it to take another week or two before you have signed contracts and completed the purchase. On completion day, your solicitor will manage the transfer of funds from the lender to the vendor’s solicitor and you’ll be able to pick up the keys to your dream home.

    Looking to start your home-buying journey? Get in touch

    Simmonds Mortgage Services can support you in finding the best mortgage product to suit your situation. We have over 20 years of experience helping first-time buyers achieve their goal of home ownership. Call 01184 693037 or book a meeting with our advisors today.

    Picture of Andrew Simmonds

    Andrew Simmonds

    Andrew Simmonds is the managing director at Simmonds Mortgage Services. He's been providing mortgage advice to home owners for many years.

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