Finalising, Funding and Fees: A Financial Timeline for UK Homebuyers
Buying a home can be a stressful time for anyone, but it’s especially draining if it’s your first home. Aside from being a huge financial commitment, it can also be confusing to know where to begin.
To make the process easier, here is a handy financial timeline to help you know what to expect:
Step 1: Check Your Affordability
Before you head out to look at properties, take the time to work out how much you can afford to spend. There are plenty of good mortgage calculators online to help you work out approximately how much you can borrow and what your monthly repayments will be.
Step 2: Check Your Costs
Aside from covering your deposit, your savings will also need to cover any other expenses associated with buying your home. Some expenses may include mortgage fees, and if you’re buying a house more than £125,000 you may also need to pay stamp duty.
Add up the estimated costs associated with the purchase and determine whether you have sufficient savings to cover everything.
Step 3: Pre-arrange Your Mortgage
Arranging a mortgage after you’ve found the house you want can be time consuming. Discuss your options with an Independent Financial Adviser, a mortgage broker, or your bank and learn whether your lender will offer you the amount of money you want and what interest rate you’ll pay.
Step 4: Find the Right Property
Once you know how much you can spend on your home, it’s time to go hunting for the right house. Take your time visiting several properties in your price range and compare the options available. Speak with professional estate agents who have a long history of selling homes in your local area. You can learn about Entwistle Green online.
Step 5: Submit Your Offer
When you’ve found the ideal property, it’s time to put in your offer with the estate agent. Sometimes your offer may be accepted right away. Other times it may be rejects, while some sellers may haggle with you until you both agree on a price.
Step 6: Arrange a property survey
If your offer is accepted, it’s time to hire a surveyor. Your surveyor will help you identify any hidden problems with the home that may require repairs. Many homebuyers are tempted to skip this step, believing their lender will conduct a valuation survey that should cover all they need. However, it’s in your best interests to know whether the home you’re buying is in good condition before you sign legally binding documentation.
Step 7: Hire a solicitor
You will need a solicitor or conveyancer to complete your home purchase transaction. Your solicitor will transfer ownership of the property from the seller over to you in the Land Registry, along with handling all the contracts, carry out local council searches, and complete the financial transaction between you, your lender, and the seller’s conveyancer.
Step 8: Finalise your offer
When your survey is complete, it’s time to finalise your offer. If you find problems with the property in the survey, you may want to renegotiate the price you’re willing to offer to cover the cost of any repairs. Your lender’s valuation survey may also value the house at a lower price than you originally offered, which may also require renegotiating your original offer.
The seller has the option of rejecting your renegotiation or accepting a higher offer from another buyer at this stage, which can be stressful. A low valuation may also cause your mortgage application to be rejected if you can’t afford to cover the shortfall from your savings.
Step 9: Exchange contracts
When all negotiations are finalised, your estate agent should give you a contract to sign in order to complete the sale. Always take the time to double-check the contract with your solicitor to be sure all the details are correct. You may be required to pay a holding deposit at this stage to show your intent.
Step 10: Finalise the purchase
In most home buying transactions there is usually a four week deadline between exchanging contracts and completing the sale. However, the settlement date can be changed to a later date by you or by the seller, if required.
During the deadline period, your solicitor should walk you through the fees and charges you’re expected to pay, including the remaining money needed to complete the purchase form your savings and any mortgage fees or solicitor’s fees that are due.
When all of the steps have been completed, all that’s left to do is move in. Your estate agent will hand you the keys to your new home and it’s all yours to enjoy.
Louise Fletcher has been in the real estate industry all her working life. With a wealth of knowledge under her belt she enjoys writing about, and answering property questions.