The Buying Process

The first thing to consider when planning to purchase a property is how much you can afford to borrow. If you are a first time buyer you will not have any equity in an existing property and will need to rely on the majority of the funds coming from a lender. The lender is the key to how much you can afford and lenders have differing criteria on the amount they will lend and they amount of deposit they will expect you to put up. Banks and building societies have traditionally been the first port of call for buyers and even if you have a history of bad or adverse credit, these high street lenders will usually have a mortgage product to suit you.

If you do have adverse credit, the mortgage you take out will not have the most competitive interest rate as you will be a higher risk as far as the lender is concerned. Once you have decided on the type of mortgage and the lender you will need to get a mortgage in principle. This will give the vendor (home owner) the confidence to choose you as a chain free buyer above some one else.

Having a mortgage in principle means that your sums are correct and you will be able to afford to buy. The current owners will feel they have the green light to remove the property from the market and the process can really begin. Once you have secured your mortgage and you are actively searching for a home through estate agents and internet property sites, you will need to find a solicitor. When you have decided on the property you wish to buy and made an offer, inform your solicitor who will then begin the searches.

Your mortgage lender will need to proceed by carrying out an independent valuation of the property they are about to lend the money for. You will then need to instruct a surveyor if necessary to conduct a survey – depending on your needs dictated by the age and condition of the property and budget. You will then reach the point where you are unable to pull out. Contracts will need to be signed and exchanged. This usually takes an average of up to 12 weeks after your offer is accepted. Up until then you can decide to pull the plug. You will loose any money you have paid to your solicitor and the surveyors and unless it is for a very good reason, (if the survey uncovers major structural problems for instance) make your vendor extremely upset as they will have also incurred costs.

Your vendor can also pull out if they are not happy or if they allow you to be ‘gazumped’ by accepting a higher offer for their property than the one you put forward. You will need to pay a deposit at this point – this can vary. You will need to agree to a moving in date and arrange for the removals. The last stage is the ‘completion’. The funds will have been transferred on the moving in day – usually by 12 noon although it can be later and if there are problems – not until the next working day. Dont worry an estimated 20% of UK applicants have been refused a standard mortgage from high street lenders. Fortunately, there are now numerous non status and poor credit providers of adverse mortgages in the UK who will be happy to offer you the right product for your current circumstances.

Although adverse and bad credit mortgages can be slightly more expensive than standard mortgage rates, careful management of your mortgage repayments will result in a more beneficial rate after a period of time, (generally two - three years). This will assist in rebuilding your credit history.