“So, John, tell me how I should go about buying my first home?”
Now strangely enough in the 27 years I have been a mortgage broker, this is a question that I have never been asked.
It also somewhat surprises me with the apparent and understandable lack of knowledge of the process, that clients and prospective clients don’t ask this question!
So, over the next 3 weeks I will set out a step by step blueprint of the process.
SPEAK TO YOUR WHOLE OF MARKET MORTGAGE BROKER! I am not just saying this because it is what I do, I am saying this because until you have an accurate idea of just how much you can afford and how much a lender is likely to lend to you, finding a property is a somewhat futile exercise! A good broker will ask for what seems like a large amount of information from you and will include your FREE multi agency credit file* which is one of the most important documents in the initial stages. He will then discuss with you what your current employment situation is and what sort of deposit you have available. He will then calculate the likely maximum mortgage that you will be able to obtain. BE AWARE – a good broker will NOT arrange a Decision in Principle for you at this stage! You have not found a house…how do you know how much you need to borrow? You are now set to move to stage 2. *a monthly fee of £14.99 applies after the free 30-day trial. Free reports are also available from Equifax, Experian and Transunion.
FIND A HOUSE…the fun bit of the process! Take your time over deciding on your purchase. It is rarely a race. Visit the area at different times of the day to see what sort of area it is. If you are happy with the area next find your house that sits inside your budget. The Estate Agent may want a Decision in Principle or may want you to see their inhouse broker. Until you have had an offer accepted there is absolutely NO requirement that you should agree to either. A reference to the Estate Agents Code of Conduct will usually remind an over exuberant Estate Agent of what they can and cannot do! So hopefully you will soon find your ideal property which brings us to…
MAKING AN OFFER TO BUY. A lot has been said about the correct way to make an offer, my personal belief is, make an offer that you are actually embarrassed about making! You can always negotiate the price upwards…it is VERY difficult to negotiate a price down! OK, so it may take a while to achieve an agreed price. But you will usually come through the process with a good deal!
THE OFFER IS ACCEPTED. Now the work starts! First thing to do is to tell the Estate Agent to contact your Whole of Market broker to validate your finances. The next task is pick up the phone and tell your Whole of Market broker that you have had an offer accepted. They will then make a mutually convenient appointment to source and agree the best, most suited mortgage deal for you. A good broker will have access to all of the High Street deals and the better brokers will have many exclusive or semi exclusive deals available as well.
Your home may be repossessed if you do not keep up repayments on your mortgage.