Understanding the home-buying process, from the first step to the doorstep, can help you navigate the journey with confidence. Here’s our overview of how to buy a home in 10 simple steps, along with how long each step should take.
1. Save for your deposit
You’ll need to save at least 5-10% of the property value as a deposit. The average property price in the UK is £296,000 (£553,000 in London)* – and you’ll need to factor in the additional costs of buying a home as well. The Lifetime ISA (also known as a LISA) could be the best way to save for your deposit and has been labelled as a no-brainer for first time buyers. Thanks to its 25% government bonus, you can get up to £1,000 for free each tax year on top of your tax-free savings up to £4,000. Learn more about the Lifetime ISA in our blog post.
Once you’ve reached your goal, it’s time to start the home-buying process!
2. Calculate how much you can borrow
5 minutes
A Mortgage in Principle (MIP) is an official estimate, but not a guarantee, of how much you could borrow from a lender – a mortgage. While it’s not essential, a MIP shows sellers and estate agents that you’re a serious buyer and that, in principle, you can afford the property you want to buy. With Moneybox Mortgages, you can now complete a MIP within the Moneybox app.
3. Talk to the experts
Based on the details you provided for your MIP, a mortgage broker can help you find the right mortgage to suit your needs. You can either speak directly to a lender, or to a mortgage broker who covers the wider market. With Moneybox Mortgages, you can get free, impartial mortgage advice from our experience team of brokers, who compare thousands of mortgages from over 90 lenders!
4. Find your new home – and make an offer!
From 1-6+ months
Use sites such as Zoopla and Rightmove to research properties within your budget. Think about what’s important to you in a home, which might include transport links, parking space, or the distance to shops. Arrange viewings with estate agents and ask plenty of questions! Once you’ve found a home you want to buy, make an offer and wait for it to be accepted.
5. Secure a mortgage
From 3-6 weeks
You can either apply for a mortgage directly with a lender, or via your mortgage broker. Either way, you’ll need to have your paperwork ready to show that you’re able to afford the property. The lender will review your details and organise a property valuation. If no further details are required, you should receive a mortgage offer, which you can then choose to accept before proceeding. If your application is declined at this stage, it’s worth finding out why. Look at your credit report and check back in with your mortgage broker before applying again.
6. Give the go-ahead to your solicitor
From 4-12 weeks
Conveyancing solicitors manage the legal side of property transactions, including organising searches and drafting contracts. Asking for personal recommendations and reading online reviews can help you find a trusted solicitor, but make sure they’re on your lender’s approved panel before you start working with them.
7. Consider a survey
From 1-2 weeks
You don’t have to order a survey on your new home, but if you do want to, now is the time. Consider which of the three main types are right for your new home – the cost and level of detail varies, depending on the age and condition of the property. You can often renegotiate with the seller on price, based on the findings of the survey.
8. Agree on a completion date
Up to two weeks
Arrange a date that works for you, the seller and the estate agents to complete your home purchase and get the keys, otherwise known as your completion date. Once this date is confirmed, you can start packing and hire a removals company.
9. Exchange contracts
From 2-4 weeks
Swapping signed copies of the contract with the sellers via your solicitors is known as the exchange of contracts. At this point, the transaction becomes legally binding for both parties, so you can breathe a sigh of relief. As a buyer, you would lose your deposit if you pulled out of the sale now. Remember that you need to have buildings insurance in place from the day you exchange. If you’re buying a leasehold property, it might be included in your service charge – be sure to check.
10. Complete your home purchase – and move in!
7 to 28 days after exchange, but sometimes on the same day
On completion day, you’ll get the keys – congratulations! Your solicitor will transfer the fundsFunds, also called ‘tracker funds’, are financial instruments that have been set up to match or ‘track’ the price of a market index. Investing in a fund lets you get exposure to different financial assets like shares and bonds, without having to buy them directly. to the seller, and apply to the Land Registry to transfer the title deeds of the property into your name. If stamp duty applies, you have 14 days to pay it via your solicitor.
To learn more about Moneybox Mortgages, click here or head in-app to Accounts > Mortgages.
*Office for National Statistics (ONS), released 19 October 2022, ONS website, statistical bulletin, UK house price index: August 2022
Moneybox Mortgages is provided by Moneybox Mortgages Ltd.
Your home may be repossessed if you do not keep up repayments on your mortgage.
