Buying Your First House: A Step by Step Guide

Buying your first house can be both exciting and terrifying! On one hand, you are about to have your very own space for the first time, but on the other, there’s a lot of hoops to jump through!

It can become confusing and stressful if you don’t know what to do, which is why we’ve put together this simple guide to help you out.

Saving for a deposit

A typical deposit can range from anywhere between 5% and 35%, although the average is around 10%. Obviously, depending on what kind of price range you are aiming for will influence how much of a deposit you need.

As soon as you decide you want to buy a house at some point in the future, you should start your savings plan.

Think about your current earnings and look for ways you can add more to your savings pot each month. Cancel non-essential Direct Debits, cut down on frivolous spending and give yourself a budget to stick to.

If you can bring in some extra cash – with a second job or freelance work – even better!

Find out how much you can borrow

There are a lot of online calculators that can give you an idea of how much you can borrow, but don’t rely on these too heavily. They are only rough estimates to give you a headstart.

The better option would be to arrange a meeting with a mortgage advisor, who will have a much clearer idea of the figure you will be looking at. But remember, these are just estimates – nothing in concrete until you get your Mortgage in Principle (see step 4).

Once you know how much you can borrow, and how much of a deposit you’ll have, then you can start searching!

Research where you want to go

You might decide to stay close to home and so already know the area very well. Or you may have your eye on another city, country or even another country!

The key thing here is to research, research, research! For the purposes of this guide, we’ll look at moving in England only, as other countries will have their own processes for buying a home.

There’s lots of factors you consider before deciding on a place to live, and it will depend on your individual circumstances.

If you don’t drive and rely on public transport, then being close to transport links will be a top priority to you. If you have children, you’ll want to know which schools are local to you and which catchment areas apply.

You should also keep in mind what kind of life you want to have; if you want to enjoy the nightlife and convenience of a city, then you want to be close to the action. If you prefer peace and quiet, and don’t mind having to travel to the shops, then a rural location might be a better choice.

Get a Mortgage in Principle

This is the next step up from finding how much you can borrow. This is when you get your mortgage approved and go through all the credit checks, paperwork, etc…

You’ll have to provide documents of earnings, savings, outgoings and incomings, etc… so that they have a clear picture of your finances.

You’ll also have to have a credit check done, and decide what kind of mortgage you want.

Once that is all sorted, you know for sure how much you can borrow and can start getting serious about house hunting!

Start arranging viewings

Now comes the fun part! Start looking for your dream home!

Get online and search, drop into your local  estate agents, and begin narrowing down your options. You’ll have some preferences on what house you want; number of bedrooms, off-road parking, fitted kitchen, etc…so that will help you when searching.

As soon as you have found a property you like the look of, get in touch with the agent and arrange a viewing. This is a great way to strike any unsuitable properties off your list – sometimes you visit a property once and know straight away it’s not for you. Other times, there will be something about the property itself – it’s not suitable for a mortgage, for example, that takes it off your radar.

You may need to visit a property a few more times before deciding it’s the one for you. You can read more about what to look for in our guide to choosing your next home.

Make your offer

Your estate agent can help you here and offer advice about the best price to go with, but you can also do some of your own research.

Online property websites such as Zoopla will give you an idea of what prices other houses in the area have sold for. You can even match like-for-like almost, so if you are looking at a 3-bed semi-detached on a particular road, you can look and see what the neighbours houses sold for.

You also need to take into account any additional work that needs doing. If the windows or boiler need replacing, factor that into your offer.

It’s best to aim lower with the idea of haggling a little, but don’t offer something ridiculous – that just wastes everyone’s time. You also need to prepare for the seller to reject your offer, or someone else comes in and gazumps you. It happens unfortunately, but you just have to accept it and move on.

Get help with the legal work

Once your offer has been accepted, the paperwork will begin!

The legal term for transferring a property from one person to another is called ‘conveyancing’, so you’re likely to hear it a lot.

The paperwork will mostly include;

  • Sorting insurance
  • Getting surveys completed
  • Sorting Stamp Duty
  • Dealing with the Land Registry
  • Transferring the money

It feels like a lot, but if you keep clear records and use a Financial Advisor, it will go smoothly.

Complete!

Once all the paperwork is done and dusted, you will finally complete! This is where you will officially exchange contracts, get the keys and the new house will be yours!

You can finally move in!