From saving for a deposit, to finding a home, making an offer and securing the deal, here’s a guide to help you through the process.
The first step to getting your dream home would be to get a rough estimate of how much you could borrow for a mortgage to give you an idea of the type of property and location you could afford. It may also help you work out how much you’ll need to save for a deposit.
If you’re a first-time buyer, some lenders may be able to lend you up to 95% of the purchase price or valuation (whichever is the lower).
There are also government housing schemes available to help make buying a property easier.
If you don’t have enough for a deposit, make a savings plan. You can also create a budget to see where you can cut back and save more.
It’s a good idea to save as much as you can when planning to buy a home because:
a larger deposit may help you find a lower interest rate and thereby reduce your monthly repayments
your savings can help cover the costs of buying a property such as Stamp Duty, conveyancer’s fees, survey costs and removals
your savings can help you furnish or complete work on your new home
Explore: How to save for a housing deposit
When you apply to borrow money, lenders will look at your credit score before deciding whether to accept your application. It can show them how reliable you are at borrowing and repaying money.
It’s recommended that you check your credit file to make sure there are no mistakes. You can also improve your credit score to increase your chances of getting a mortgage.
Explore: How to check your credit file
Take some time to think about what is important in a home versus what you’d like. This will help you narrow down your search when it comes to looking at properties. For example:
| What is important in a home | What you may like in a home |
|---|---|
| At least 2 bedrooms | Ideally 3 bedrooms |
| Must have space for parking | A garage or own driveway |
| Outdoor space for a dog | A private, low-maintenance garden |
| What is important in a home | At least 2 bedrooms | At least 2 bedrooms |
|---|---|---|
| What you may like in a home | Ideally 3 bedrooms | Ideally 3 bedrooms |
| What is important in a home | Must have space for parking | Must have space for parking |
| What you may like in a home | A garage or own driveway | A garage or own driveway |
| What is important in a home | Outdoor space for a dog | Outdoor space for a dog |
| What you may like in a home | A private, low-maintenance garden | A private, low-maintenance garden |
When making your list, think about your long-term needs. House prices can go down as well as up and it can cost money to move. For example, if you’re hoping to start a family, finding a place with room to expand may mean that you won’t have to sell to buy a bigger place.
Location is also important. Research and visit different areas to get an idea of:
what it would be like to live there
what areas you can afford to buy in
what the schools are like
how long it would take to commute to work
A Decision in Principle – also known as an Agreement in Principle – gives you a clear idea of how much you could borrow based on your circumstances. It usually involves a soft credit check to look at your credit history, but will have no impact on your credit file.
A Decision in Principle is not a guarantee that your mortgage application will be accepted, but it can help you understand your options and what you may be able to afford. It also shows estate agents that you’re serious about buying a property.
Explore: Applying for a Decision in Principle
With your list of requirements in hand it’s time to contact estate agents, search for properties and arrange viewings. This is also a good time to start looking for a solicitor or licensed conveyancer.
It may take some time, but when you find a property you want, deciding on the right price to offer can be exciting and scary. From asking the right questions to negotiating tactics, get tips on how to make an offer on a property.
If your final offer is accepted – congratulations. If not, keep looking – your new home, at a price you’re happy with, could be just around the corner.
Once your offer has been accepted on the property, you can apply for a mortgage.
There are different types of mortgages to choose from. The one for you will depend on your financial situation, future plans and the type of property you’re buying. If you prefer, you can speak to a mortgage broker to help you find and apply for a mortgage. A mortgage broker is an advisor who will be able to look at a variety of mortgage options for you. Some brokers may charge a fee.
The mortgage application process can take a few weeks. It involves detailed checks of your finances and your lender may want to conduct its own valuation on the property you want to buy. If your mortgage application is approved, your lender will send you an offer.
Explore: Different types of mortgages
There will be legal work involved with buying a property which is carried out by a solicitor or licensed conveyancer. This can take between 6 to 12 weeks, on average, to complete and there will be costs involved.
Among other tasks, a solicitor or licensed conveyancer will typically:
check the legal title to the property
manage the chain for exchange of contracts and completion
collect and transfer money including Stamp Duty (if payable)
carry out property searches to check for any environmental or planning issues that might affect the property’s value
As well as the valuation that your lender may have arranged for their benefit, you should also arrange an independent survey of your own to flag any potential problems. The survey itself will take a few hours and will be completed by a surveyor who will then send you a report.
You can choose the type of survey you’d like, depending on how much detail you need:
RICS Condition Report – the most basic type of survey
RICS HomeBuyer Report – a more detailed survey of the inside and outside of the property
Building or full structural survey – the most comprehensive type of survey
Buyers in Scotland can also request a free Home Report from the seller – this contains an energy performance certificate, a property survey, and questionnaire.
If the survey identifies any significant work you’ll need to carry out, you may be able to revisit your offer with the seller. For example, if a house has some damp you may be able to factor the cost of the work into the purchase price.
The exchange of contracts is when solicitors or licensed conveyancers swap signed contracts on behalf of you and the seller. It’s also when they’ll ask you to transfer your deposit over to them.
When you exchange contracts – you’re legally bound to buy the property. In Scotland, this is known as ‘conclusion of missives’. You will need buildings insurance in place at this point.
Buildings insurance protects you against the cost of repairing or rebuilding your home from scratch, should it get damaged from an insured risk, so it’s important to consider getting the cover you need.
Exchanging contracts is a big milestone, when you can do a celebratory dance.
The completion date is usually 2 weeks after exchange, but it can be as little as 1 day after or even take place on the same day. This is when you can pick up the keys to your new home and give yourself a pat on the back.
Explore: Your moving day checklist
Your home may be repossessed if you do not keep up repayments on your mortgage.
