Buying a property can be a daunting experience, with so much to learn and many steps along the way - here is a handy step-by-step guide to help turn your dream home aspirations into a reality.
1. Get your finances in place
Whether you're thinking about buying through Shared Ownership, Help to Buy, or on the Open Market, before you begin house-hunting, it's important to evaluate your finances first to find out how much you can realistically afford to buy.
The best place to get help is an independent mortgage broker who can guide you through the complex mortgage process. We have a recommended panel of mortgage advisors, all have experience of affordable housing products such as Shared Ownership.
After successfully being assessed by a Mortgage Advisor, you will receive a 'mortgage in principle. This is essentially a letter from a mortgage lender setting out how much they would be willing to lend, based on an initial assessment of your circumstances and finances.
This is a helpful indication of the amount you can borrow and is not legally binding. This will help you get a better idea of what price bracket to look at when house-hunting.
2. Work out what you can afford and where
Once you've got an idea of how much you can borrow, you can start thinking about the area you would like to live in and the type of property you can afford.
When deciding where to live, think about your location, transport links, and how close you are to shops, restaurants, pubs, schools and other local amenities. Keeping your budget in mind, think about the type of home you want to buy - the number of bedrooms, parking availability, outdoor space, amount of storage, etc.
Take a look at homes available on our website and discover different ways to buy a home, in various areas in and around London. Peabody offers a variety of home buying options including Help to Buy and Shared Ownership to help you find your dream home.
3. Go house-hunting
Here's where the fun begins! At this stage in the buying process, you can now start viewing properties. While some buyers fall in love with the first place they see, most have to visit a lot more properties to find their dream home.
When you're house-hunting, register your interest in our eye-catching properties to make sure you're notified and kept up to date with launch dates, viewings available and events taking place in local areas of interest to you.
Once you've seen a selection of homes, you will get a better idea of what you will be able to afford. You can then work out whether you need to widen your search a little – or compromise on some of the things on your wish-list to find homes that fall within your budget.
4. Apply for a mortgage
When you're happy you've found the property you want to buy, you need to apply for a mortgage officially. A mortgage broker or lender will be able to advise and assist you.
At this stage, you will have a lot of paperwork to go through and your bank statements and financial accounts will be reviewed to check you can afford the loan you are trying to borrow.
You will need the following documents for the mortgage application process:
- Utility bills
- P60 form from your employer
- Your last three month's payslips
- Passport or driving license (to prove your identity)
- Bank statements of your current account for the last three to six months
- Statement of two to three years’ accounts from an accountant if self-employed
5. Appoint a Solicitor
Once you've had your offer accepted and confirmed your mortgage, it's time to think about who you are going to choose as your 'conveyancer' or solicitor to handle the legal side of things. They will review all the legal documents and start the necessary searches, such as local authority, environmental and water and property.
It's advisable to get at least three quotes and make sure you know exactly what is – and isn't – included in the quote, such as Land Registry fees, bank fees, postage and VAT.
It can be useful getting solicitor recommendations from family or friends and also through reviews and recommendations online - good conveyancing is critical to helping keep your house purchase on track. If buying through Shared Ownership, it is recommended to find a solicitor with Shared Ownership experience, all solicitor's on our panel have specific knowledge in this area.
6. Get a Survey done
When your mortgage is officially agreed upon, it is highly advisable to commission a survey; which will assess the condition of a property before you exchange contracts. As a buyer, it's well worth arranging your own survey so you will get a more detailed inspection of the property you're hoping to purchase.
There are three different types of surveys to choose from:
- The Home Condition Report - This is the cheapest and most basic survey and includes a snapshot’ of the condition of the building.
- The HomeBuyer Report - This more comprehensive than the Condition Report and includes a deeper inspection and surveyor’s valuation of the property. Also a summary of problems that may affect its value.
- The Building Survey - The most expensive and the most comprehensive, often taking several days to complete. It includes all the features of a HomeBuyer Report and includes advice and considerations for your solicitor.
Be sure to seek advice from your solicitor and make the right decision on the type of survey you choose. However, as our homes are predominantly new build, a home condition survey will likely be sufficient and means you can save some money by choosing the cheaper option.
7. Exchange contracts
Once the survey is complete, the legal work is finalised, and the mortgage is in place, it's time to exchange. Exchange is the point at which both buyer and seller are legally bound to go ahead with the transaction on the terms agreed.
It is also the point at which you pay the deposit to the solicitor (this is usually 10% of the purchase price or share price if buying through Shared Ownership). If you pull out of the deal after this, you will lose your deposit.
On completion day, your money is transferred to pay for your new home. You will also need to pay any outstanding fees, such as stamp duty (based on the price of your property), and the cost of legal work.
9. Move in
Once you've completed, you can collect the keys to your new home and move in!
Find your dream home with us.
Peabody is one of the largest housing associations in the UK with a selection of Shared Ownership and Private Sale homes available throughout London and the South East. Take a look at our property search to find the perfect home for you.