First-Time Buyer Guide
First Time Buyer Guide
Navigating the financial aspects of a home purchase is often the most critical phase after an offer has been accepted. While initial steps like property viewings and making an offer are exciting, the financial requirements afterwards can be complex. This guide outlines the
essential financial steps to ensure a smooth transition from an accepted offer to a successful closing.
Financial Preparation: The first step is financial preparation. Check your credit score for a better chance of getting a mortgage and working out your budget. Make sure you have at least 5% of the price of the property saved as this will be used as a deposit. Calculate how much mortgage you will have to pay every month and decide if this is financially sensible for you.
Mortgage type: Then decide which type of mortgage suits you best, such as repayment and interest-only mortgages, Fixed-rate and variable-rate mortgages and offset and guarantor mortgages. You can then decide if you would like to apply for a mortgage independently or through a bank or mortgage adviser. We always recommend that
you seek help from a third party as applying for a mortgage yourself for the first time can be challenging.
Legal Process: The next step is the legal process, where a solicitor will confirm and transfer the property in your name. Then you will be asked to submit your full mortgage application. Your solicitor will then carry out ‘searches’ with the local authority and
other bodies to uncover any issues with the property. This includes checking for things such as planned developments in the area, flood risk and contaminated land.
Exchange of Contracts: Once all searches and legal enquiries are satisfactory, you and the seller can now agree on a completion date. Your solicitor will then exchange contracts with the seller’s solicitor. At this point, you will pay a deposit (usually 10% of the purchase price), once this is done you are now both legally committed to the transaction. This means if you pull out, you will lose your deposit.
Completion: On the agreed completion date, your mortgage will be transferred to your solicitor. Your solicitor will then transfer the total purchase funds (mortgage + your deposit) to the seller’s solicitor. Once the funds have been cleared, the estate agent will be authorised to release the keys to you. You will then be the owner of the property.
