Before viewing properties, you will ideally have applied to your mortgage lender or through a broker for a Decision in Principle. Also called an Agreement in Principle, this document confirms how much you can borrow to buy the property you love and then it is just a question of offering what you feel comfortable with.
Most mortgage lenders have online calculators to determine how much you can borrow. The amount they are willing to lend depends on your credit report, spending habits and income. A mortgage lender will also consider your ‘loan-to-value’ ratio — the percentage of the property’s price compared to the deposit you can afford. Alternatively, you can conduct this process with a mortgage broker who can scour the mortgage markets for a product which suits you best.
Several factors, such as valuations and mortgage approval, affect how long it takes to buy a house. However, in your local area, house sales typically take 3 months to complete. However, if a chain exists, the house sale could take considerably longer.
The amount of Stamp Duty Land Tax (SDLT) you must pay depends on the purchase price. Stamp duty rates range between 2 and 12% and are proportionate to the cost of your home. However, suppose you are a first-time buyer buying a property under £300,000 or buying a property under £125,000. In that case, you don’t pay any stamp duty.
Here is a table of how much stamp duty you can expect to pay on homes valued over £125,000:
It’s vital to remember that stamp duty is calculated on the part of the property price in each band. There are other exemptions that your estate agent can inform you about.
It is advisable to arrange for a qualified surveyor to conduct a survey. For example, a mortgage valuation only confirms the value of the property, however, it doesn’t include a detailed report on the actual condition of the house. On the other hand, a house survey checks for dampness, subsidence, roof condition and other possible defects.
You sign the purchase agreement towards the end of the sale process. First, the seller’s solicitor will draft the contract and then your solicitor will confirm all the details and perform searches. During the sale process, you will receive the mortgage offer.
You pay the deposit on exchange of contracts and it is typically 10% of the purchase price.
The exchange of contracts is the part of the buying and selling process where you and the seller sign the contracts. At this point, the sale is legally binding and you must pay the deposit. The completion date is when you get the keys and can move into your home.
After exchanging contracts, your solicitor will instruct your lender to release funds in readiness for completion. It usually takes at least five working days for the lender to release the loan money.
You can arrange to get the keys after the seller’s solicitor confirms receipt of funds. Your estate agent will verify where and when you collect the keys to your new home.
Book a valuation