Contractor Financials

Our 10 step guide to buying a home

By: Tony Harris|April 16, 2010No Comments

Buying a home can be a complicated and sometimes scary road but at ContractorFinancials we specialise in taking the hassle out of homeownership. This is our definitive guide to securing a contractor mortgage and making that step up the ladder.

1. Secure an agreement in principle

   Your adviser will arrange an agreement in principle from whichever mortgage lender you agree is most suitable for your needs and this will mean that you can start looking for properties. An agreement in principle can be a great bargaining tool when you are negotiating on a property as it shows that a lender has agreed that they will provide a mortgage to you of a certain value and should massively improve your bargaining power because you can show any would be seller or estate agent that you mean business.

2. Find your dream home

   When you start house hunting, it can be both an exciting and a daunting time with so many options available but knowing how much you can borrow (using your agreement in principle as a guide) will allow you to narrow your search and make the right decision for your future.Online property search tools can be useful for finding a property but don’t make the mistake of also thinking they can be used to source your mortgage. These sites are inevitably aimed at the employed or self employed whereas you fall between both categories and so need the help of a specialist. Don’t forget that as a ContractorFinancials client you pay no mortgage broker fees for our help.

3. Make your offer

   Once you find your dream home, you need to put in an offer. The key to negotiating is to know what you can afford to pay and how much you believe the house is worth.You can check what the house was previously bought for using websites that display the sold prices for houses by postcode or street name. This knowledge will give you the upper hand in any negotiation and will help to ensure you don’t pay over the odds for a house in your chosen area.Once you have made an offer you will then liaise with the estate agent who will act as a go-between for you and the seller. Stick to your guns and don’t be seduced into steadily increasing your offer so that it becomes unrealistic. Not only will you be likely to regret paying too much but it may also prove impossible to secure the mortgage you need if the lender judges that you are paying over the odds for a property. You will need to agree a final sales price for the property and once this has been set you can start the buying process.

4. Contact your adviser to start the mortgage application

   Once you have agreed a purchase price for the property, you should call ContractorFinancials on 0845 062 8888 or email your adviser and we can kick start the mortgage application proper. In order to process your application you will need identification to hand such as your passport, driving licence and utility bills which will help protect against identity fraud.At this point we will take all of the details needed to complete the application over the phone. It only takes a few minutes of your time and ensures that the lender has all the details needed to get the application underway for you. Your mortgage application assistant will guide you through the process.At this stage you will need to instruct a solicitor and your adviser will be able to make a recommendation of a firm from an improved list of nationwide solicitors that can similarly use technology to reduce delays and cut costs for you.Alternatively, if you would like to gauge legal costs etc before you start house hunting then we would be happy to help. Contact Claire on 0845 062 8888 or email Claire@ContractorFinancials.com

5. Searches and building surveys are carried out on the property

   Having already agreed to lend to you during the application for an agreement in principle, the mortgage lender must now ascertain whether they want to lend on the property that you have chosen. A number of checks are carried out in order to assess whether or not the property is worth what you have offered to pay for it.These checks include area searches, building surveys and land surveys and are designed to find out if your property is a secure long term investment. It will highlight whether your property is built in an unsafe area such as contaminated land or whether there are structural problems such as subsidence which may damage the property. Some of these checks are carried out by your solicitor and some by the lender itself and your mortgage application assistant will be on hand to help.In most cases these checks bring up minor points that you can often ignore but more serious issues will enable you to negotiate with the buyer to get them fixed before you move in as a condition of the sale or alternatively reduce the purchase price. Sometimes the lender may insist that these problems are dealt with before they will agree to lend against the property.

6. Mortgage offer will be produced

   Once all of the searches and surveys have been completed and any potential problems dealt with, your lender should issue a offer to your mortgage application assistant. When this happens, they will contact you to let you know that your application is going ahead and you can then contact your solicitor to inform them that they can press on with finalising the purchase.

7. Your Solicitor will contact you to ask you to sign the contracts

   Whilst the searches are being performed on the property and the mortgage lender is investigating any queries, the next step is for both parties to sign the contracts. Your mortgage application assistant can liaise with your solicitor if necessary to ensure this goes smoothly.

8. Your Solicitor will request your deposit money and exchange contracts

   Now comes the scary bit. Your Solicitor will contact you to request your deposit money which is normally around 10-20% of the purchase price. This is transferred to your solicitor so that they can hold it for you between exchange of contracts and completion.When you exchange contracts your deposit is handed to the buyers and this acts as a binding agreement between you and the seller. Your solicitor will handle this for you so you don’t actually need to meet with anyone. Once your deposit is paid the seller must go through with the sale otherwise they have to give back your deposit and if you pull out of the purchase then the sellers are able to keep your deposit as compensation.If you are selling a house at the same time then it is likely that all or part of the deposit on your new home will only be realisable from the sale proceeds of your current property and so your solicitor will probably offer a facility to cover the deposit moneys between exchange and completion.However, amongst the excitement of exchanging contracts, it is easy to forget that the property is now yours to protect and look after and is now probably your most valuable asset. For that reason, it is essential that you take out a comprehensive building and contents insurance to protect your home and belongings against loss or damage.To speak to us about your building and contents insurance needs and to arrange cover today, call Claire Monger on 0845 062 8888 or emailClaire@contractorfinancials.com

9. You agree a completion date. The mortgage advance is requested and deeds transferred

   The only thing that you will have to do at this stage is to agree a completion date with your solicitor, which they will then negotiate with the seller’s solicitor.Once you have agreed this completion date with the sellers, you need to contact your mortgage application assistant on 0845 062 8888 or via email to let them know. Your dedicated mortgage application assistant will then liaise with the mortgage lender to make sure that they are ready to release the funds before your completion date. This saves you the time and hassle of chasing your mortgage lender, leaving you free to concentrate on the packing.The final stage in the process of buying a home is conducted behind the scenes by your solicitor. The mortgage advance will be requested by your Solicitor so that the funds have cleared in time for completion. They will then send the transfer deeds to the sellers Solicitor and once these have been received the sale is complete.

10. The purchase is completed and the estate agent will hand you the keys to your new home!

    The only thing that you will have to do at this stage is to agree a completion date with your solicitor, which they will then negotiate with the seller’s solicitor.Now that the property is yours you can pop open the champagne for you and get the kettle on for the removal men. Congratulations, you are now the proud owners of a property!The process works slightly differently in Scotland so please contact us on 0845 062 8888 or email mortgages@contractorfinancials.com for your guide to buying in Scotland.

Our Contractor specialist mortgage advisers are on hand to help with your current or future requirements today. Call us on 0845 062 8888 or emailmortgages@contractorfinancials.com.