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This is a selection of an article was written by our very own mortgage broker Carrie Benn, she is available on 0870 330 4454 or c.benn@themortgagetimes.com if you would like direct contact with her. This is an ideal article to go hand in hand with the home buyers show.

The House Buying Process

What is a Mortgage?
A mortgage is a loan you take out to buy property. Most banks and building societies offer mortgages, as well as specialist mortgage lending companies.

How much you can borrow?
Depending on your income and circumstances, you can borrow anything up to 100 per cent (sometimes more) of the value of the property - but if you are a first time buyer you will usually only be offered up to 90 or 95 per cent. If buying you need to find a deposit to cover the difference between the purchase price and your mortgage.

Mortgages are ‘secured’ loans
When a lender gives you a mortgage, the property itself acts as 'security' for the loan. This means that if you do not repay the loan, your lender can repossess and sell the property to get their money back. So before applying for a mortgage you need to be sure that you can afford the payments.

Arranging Your Mortgage
It is always useful to meet with a mortgage specialist to discuss the amount you may be able to borrow, if you do not know already. This can give you an idea of: the type of property you can afford; an area you could research to purchase in; the overall costs involved in the house buying process (see Costs P.5)

Choosing Your Property & Putting In An Offer
If you have already selected the property you wish to purchase, you will need to contact the estate agent acting for the seller and put in an offer to purchase the property.

Appointing a Solicitor
When an offer on a property has been accepted, the seller's estate agent will need your solicitor's details. Your solicitor handles all legal aspects of purchasing a property, this is known as conveyancing. You have to pay all solicitors costs & they play one of the most important roles in the speed at which your mortgage is processed. They carry out checks such as a Local Authority Search, Land Registry Search, Bankruptcy Search, etc; also, any Stamp Duty payable by you will be paid to them and forwarded accordingly. The costs for using a solicitor can vary broadly but an estimate of their fees could be between £700-£2000. Mortgage Mind’s in-house solicitors work alongside our mortgage consultants, ensuring complete control over the case progression and the speedy processing of your case (See Solicitors P. 8).

Finalising Mortgage Arrangements
Once your offer on the purchase has been accepted you need to finalise your mortgage arrangements. Your mortgage broker will need to see evidence of your earnings (recent pay slips, P60 and bank statements or accountant’s records if self-employed). A valuation of the property will be required to ensure it is structurally sound (see Valuations P.9). Most lenders will also require valuation of the property to determine whether the property is suitable as their security – this is another in-house service offered by Mortgage Minds.

Exchanging contracts
Once your solicitor has carried out all necessary searches and the contract terms have been agreed, the contracts can be exchanged. Once each party has signed the contracts and they have been exchanged, they are binding. The contracts will include a completion date, which is the date that the property becomes yours. At exchange of contracts, any deposit required has to be paid. At exchange of contracts, you need to arrange buildings insurance so that the property is insured from that day. Usually, if you have one, your present insurer will cover this new property free of increased premium until the completion date.

Completion
This is the day when your solicitor will have completed the purchase on your behalf and the property is vacant for possession. The Transfer Deed, the document confirming you as the owner, will then be sent to the relevant registry for an update to the title showing you as the new freeholder.

Moving In
The property is now yours and you can move in. You may need to arrange for a firm of professional movers to help you. Once you are in your new home you have a legal responsibility to advise the local authority (rates), the statutory utility suppliers, the Inland Revenue and you will need to tell others as necessary (telephone, other suppliers, any outstanding creditors, relatives, friends etc).

For the full document written by Carrie Benn please here


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Here are links to the other exclusive articles written by our very own expert brokers: