Understanding the conveyancing process – How can I buy a home using a mortgage?
Owning your own home is a dream of many people. With a huge choice of properties out there it should be quite easy to find the one for you. Some people are put off however by the mortgage and legal process. It can seem daunting and very complicated, but it doesn’t need to be! We are going to talk you through the main steps involved in buying your own home.
Find a solicitor
Once you have found your property, made an offer and had your offer accepted, you then need to instruct a conveyancing solicitor to carry out the legal work on your behalf. Most people like to go with a recommended solicitor, whether that be one your family or friends have always used, or one recommended by your estate agent or developer. Once decided, you need to give these details to your estate agent. They will then produce a Memorandum of Sale which is then given to both sets of solicitors, estate agents and the buyer and seller. It shows buyers / sellers details, your mortgage provider and both sets of solicitors. It will also list all of the other links in the chain. It is basically a snapshot of everyone involved in the buying and selling process.
Apply for your mortgage
If you offered on your home with an AIP (Agreement in Principle) or DIP (Decision in Principle) from your lender, now is the time to actually go back to the lender and apply for the mortgage. Now that you have decided on a property the lender will be able to assess if they are prepared to lend you the money to buy your home. Most people either use a broker to help them with this, or go directly to their own bank. Part of the mortgage application will require you to pay for a survey, this will help the lender assess if the purchase is a good one and if the property is worth the money the seller is asking.
PIF (Property Information form) & Fittings and Contents Form
Once all parties are notified of the transaction, the seller’s solicitor will send your solicitor the Contract Pack. These documents include the PIF which contains important information about the property such as boundaries, planning permission, guarantees and warranties and environmental matters etc. The Fittings and Contents Form contains a list of items that will be included in the sale of the property, such as curtains, blinds, carpets etc. If the property is leasehold a copy of the lease will be included in the contract pack. The pack will also contain the title deeds indicating the type of ownership of the property.
Searches & Survey
Your solicitor will ask for funds to carry out ‘searches’. These find out vital information on the property needed by the solicitor to ensure that your purchase is a good one. There are a few different searches that are carried out in the house buying process, however the main ones are: Local Authority Search, Environmental Search, Water & Drainage / Flood Risk Searches. Your solicitor will review all of the search and survey results on yours and your mortgage lenders behalf, to ensure that there are no hidden surprises when you move in. They will highlight any issues which should be of concern and advise on how they can be best remedied.
Once your lender is happy with the property that you are looking to buy, they will issue a mortgage offer. This is legal document that the lender issues to the mortgage broker or solicitor to say that they are happy to lend you the money to buy your home.
Exchange of Contract
The Exchange of Contracts is an official term to say that both parties have agreed to the transaction and agree to be bound by it. Once this is done, the sale and purchase are legally formalised and it is then very difficult to go back on. In order to exchange contracts your solicitor will require signed documents including The Transfer Deed and Mortgage Deed. It is at this point that you will send your purchase deposit to your solicitor. You are now legally required to buy the property. In most instances you will get the date you will be moving home at exchange of contracts.
The Completion on the purchase means that you now legally own the house. You will get a call from the estate agent to say that you can now go and collect the keys to your new home. You will start to pay your mortgage from this day even if you don’t move in straight away. Different lenders set up the direct debit payment date for different times. You may pay a payment within days or you may not need to make your first payment for a few weeks.
This whole conveyancing process can take up to 12 – 16 weeks to happen. Your agent, solicitor and mortgage broker will provide you with updates throughout the process and your agent is always on hand to answer any questions you may have.
Do you want to know more about how to buy your own home? Here at Loveitts we are always happy to help. Please feel free to call into one of our offices or give us a call during our opening hours.