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TIPS ON HOW TO BUY A HOUSE

How to buy a house- a step-by-step guide

Helen Pridham

Find out how much you can afford

Once you decide you want to buy a property start saving as hard as you can. Although 100 per cent mortgages are available, you will get a much better deal if you have a deposit.
Traditionally the amount you can borrow is based upon your earnings. If you are buying alone you will typically be able to borrow up to between 3.5 and 4 times your annual income. If you are buying with a partner, the maximum will be 2.75 to 3 times your joint earnings.
Higher multiples may be available if you are a professional and some lenders nowadays base their calculations on how much they believe you can afford.
Background
-How to buy a house
-A basic guide to mortgages
-Ten things to know about remortgaging
-How to sell your home without an estate agent
-Ten things to know about equity release

House hunting

Contact local estate agents in your desired area to find out what is available and ask to be put on their mailing list. Encourage them to ring you when suitable properties become available. The internet is also a useful tool, but estate agents don't always keep their websites completely up to date.
Look at as many properties as you can manage before making any firm decisions, preferably in the daylight. When you find the one you really like, ask if you can go back for a second look at a different time of the day. Take a friend or relative for an independent opinion. Inspect the immediate area more thoroughly this time.

Making an offer

Once you are convinced you have found the property you want, ring the estate agent and make an offer. If the property has been on the market for some time, or if there is work that needs to be done, you could try offering below the asking price.
If the offer is accepted, ask for the property to be taken off the market. This will minimise the danger of being gazumped, which is when someone comes along and makes a higher offer which the estate agent is legally obliged to pass on to the seller. (If you live in England, Wales or Northern Ireland, you are not legally bound to proceed with the purchase at this point. In Scotland, if your offer is accepted, it is legally binding so you need to have the property valued before you make your offer.)

What happens next

Now you will need to arrange your mortgage and appoint a solicitor or a conveyancer to carry out the necessary legal work. Shop around for the best mortgage deal by going to an independent mortgage broker. Once your mortgage application is submitted, the lender will carry out credit checks and you will normally be told within 24 hours whether or not your application has been accepted.
If you do not have a solicitor ask your estate agent and mortgage broker for recommendations, or contact the Law Society. Then phone several for an estimate of costs before making a final decision.

The professionals get to work

Before your lender finally agrees to a mortgage, a valuation will be needed to establish that the property is worth the asking price. You will have to pay a fee for this survey. If it is satisfactory, your lender will send you a formal mortgage offer a process which typically takes about two weeks.
But the basic valuation will not tell you of any potential problems with the property. If you want a more in-depth report, you will need a homebuyer's report which will provide more detail, or a full structural survey.
While all this is going on your solicitor will be checking the title deeds to the property, carrying out searches to make sure there are no planning applications which may affect your property and liasing with the seller's solicitor.

The final stage

If everything has proceeded smoothly, your solicitor will now arrange for you to sign the contract. The seller will also sign a contract and these contracts will be exchanged. At this point you will have to pay the deposit to your solicitor. This is when the deal becomes legally binding and if you pull out you would lose your deposit.