Original Post in Facebook Group.
I am definitely no authority on buying houses but I thought to pen down my experience, especially for first-time buyers. As IMGs, the way of buying houses here is new and sometimes, we simply don't know what to do when we decide to buy. This is for such people.
1. Trigger- Buying a house is often triggered by a few things, top amongst them is “peer pressure”- everyone around me is buying so I have to. It could also be triggered by having saved up some substantial money or simply because you think it’s the better choice economically as against renting. However you arrived here, you finally decided “I want to own my own home”
2. Location- you need to have a specific city/town in mind. Note that this may not be where you live presently if you are sure you will move soon. Buying a house when you are sure you will move soon but not sure where is controversial and I will leave that for each person to decide; but generally speaking, you should be ready to live in the house for a few years after buying it.
3. Survey/Search- you will need to search for the average cost of the house you desire. This may be determined by what you have saved up already or what you simply love to have (you then save towards it). Either way, you will need to have a range in mind and if possible a specific house. This is the point you also decide if you want a new or old house as newer houses are significantly more expensive (the premium you pay on the “newness”). This is also where you decide if you want to buy a house alone or with a partner/spouse or even with a friend as pooling funds could significantly influence what you go for (you can go for more when you combine income)
Generally speaking, you have to pay a deposit (at least 5% of the total cost of the house). Then, get the rest from a borrower (mortgage) which you then pay over time. You can pay everything at once o . . . e.g. if you play for Man City in the premier league. The amount you are looking to have in cash( of course in the bank) is the deposit- which is at least 5% of the total cost of the house you want to buy depending on the terms of your prospective borrower. Also factor in other fees like solicitor’s fee, stamp duty, cost of moving ± finance advisers fee as they all add up to what you need to have saved up
4. Finance adviser- this is a key step I recommend. It’s best to approach a financial adviser with a specific house or figure in mind. Their services are often free until you buy. They will talk you through eligibility for a mortgage, options of borrowers available to you depending on your specific circumstances( e.g. your visa status), look through your incomings and outgoings hence determine affordability and even look at your deposit vis-à-vis the source ( this is important for legal reasons)
At this point, you get a verdict of “yes you can go for this house as you can afford it and you have viable borrowers” or “No, you cannot go for this house”. A “no” may mean tweaking something like saving up some more, lowering your expectation or even leaving the idea of buying a house for now till your circumstance change significantly.
5. Seller - if you got a yes from above then you approach the seller and start the buying process proper which often will vary significantly depending on if it’s a new or old house and the terms of your buying like how much deposit you have or if you are using facilities like “Help to Buy”. There is room to bargain at this point as market forces come into play. No harm in asking for some discount in any form.
6. Mortgage - Once your seller is happy and a price is agreed then it’s time to get the mortgage agreement in place properly. From my personal experience, the terms of the mortgage were worked out between myself, my financial adviser and the borrower (mortgage provider).
7. Solicitor - Around this point, the solicitor takes over as they often look at/draw up the sales contract, initiate/do searches, confirm you are not overpaying, verify the source of your income and often make the payment on your behalf (combination of your deposit and money from the borrower) on the sales day proper.
8. D-Day - On the agreed date, payment is made, the contract is exchanged and voilà you are a homeowner. This is my recollection of the events of buying my home, but I hope provides an overview of how to approach buying your first house. Please like or comment and share any new updates, corrections and additions to the topic.
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