A mortgage is a loan secured against your property.

To make sure that you are in the best possible position to buy a home, you should get a so-called “offer in principle” on a mortgage from a lender before you start searching.

Generally, the higher the deposit you can offer, the more likely you are to get the best deal on your mortgage.

While assessing your mortgage application, your lender will look at your income, outgoings and credit ratings in forensic detail. If you are self-employed, you will probably be asked to supply two years’ worth of accounts, whilst if you are employed, you will need to supply proof that your employment will continue to the best of your knowledge.

The term of the mortgage is up to you. Most mortgages are payable over 25 years, but you can choose to shorten or extend that period. This
has implications regarding the amount you pay every month.

There is often an arrangement fee for setting up a mortgage. This can be added to your mortgage, but be aware that you’ll pay interest on it for the duration of the mortgage.
After you have received a binding mortgage offer, your lender must give you at least seven days to think about whether this is the right mortgage for you.
Remember that the mortgage will not be the only financial commitment you’ll face regarding your property. You will also need to pay for:

• Stamp duty
• Conveyancing fees
• Survey fees
• Mortgage arrangement fees
• Packing and removal fees
• The cost of any white goods you may need to buy, furnishings and redecoration

Please ask if you’d like us to introduce you to a mortgage advisor.

If you sell your home before you find another home, you may have to rent for a while. In this scenario you risk house prices rising while you are looking for your new home.

Conversely, there are positive factors when it comes to selling before you have a home to buy:

• You are less likely to be gazumped
• Most vendors prefer chain-free cash buyers or buyers with an approved mortgage. If there are multiple people putting offers on a property you want, not having a property to sell will put you in a better position
• You could negotiate a better price if the vendor wants to move quickly
• You know your budget
• If property prices fall, the money from your sale will go further in your purchase

Stamp Duty Land Tax is the tax you pay when you buy a property. This is payable by the buyer and applies to both freehold and leasehold properties over the value of £125,000.

• £125,000 – £250,000 you pay 2% of the cost of the property
• £250,000 and £925,000 you pay 5% of the cost of the property
• £925,000 and £1,500,000 you pay 10% of the cost of the property
• £1,500,000 upwards you pay 12% of the cost of the property

If you are buying a second home or buy-to-let, you will be charged additional stamp duty on any property costing more than £40,000.

Have a look at our Stamp Duty calculator

Here are a few key questions to ask when you are finding out about a property:

• How long has the property been on the market?
• Which fixtures or fittings will be included in the price of the sale?
• If it is a flat, is it leasehold or share of freehold?
• If it is leasehold – how much is the ground rent and service fund? Who manages the managing agent and is there a sinking fund?
• Ask for a copy of an Energy Performance Certificate (EPC )

Once you have found a property you would like to buy, the next step is to make your offer – the price you are willing to pay for the property. This is subject to contract, and subject to the results of your survey. Make sure to ask that the property is taken off the market as soon as your offer is accepted.

Sealed bit are very common in Scotland, and usually happen in the UK when there is a great deal of competition for a property. It’s up to the seller which bid they accept, if any, and the decision won’t always be based purely on price. Along with the amount you’re offering, you should use your offer letter to:

• Highlight anything that differentiates you from other buyers: are you chain-free or a cash buyer? This could help speed things up and lessen the chances of the transaction falling through.
• Show that you can afford to buy the property: enclose a copy of your mortgage offer in principle to prove that you’ll be able to borrow the necessary amount.
• Demonstrate that you’re ready to get things moving as soon as they accept your offer: include details of your conveyancing solicitor and, if you’re selling your own home, explain what stage you’re at with the sale.
• Explain what you love about the property: selling a home can be emotional, and some sellers will want to know that the new owners will enjoy living there as much as they have.

Ideally your solicitor will write you a letter to accompany your bid that will reiterate all the above.

We recommend that you appoint a conveyancing solicitor once your mortgage has been approved in principle.

Your solicitor handles the legal work around the property. He or she also submits searches to the local council to check whether there are any planning or local issues that might affect the property’s value. Your surveyor will survey the property to find issues that might need addressing. Your solicitor might ask for a deposit.
We are happy to recommend solicitors or surveyors if required.

To be sure that the property you intend to buy is worth the money you’re paying for it, your lender will conduct a basic valuation survey.

You don’t need to commission a survey of the property you are buying, but it is highly advisable. In some cases, surveys reveal such significant problems, buyers decide against going ahead with the purchase altogether. In less extreme circumstances, surveys will alert you to works which might need to be carried out.

There are several different types of survey available. These include:

• Survey level one: RICS Home Condition Report This is the least expensive option. Using simple traffic light rating symbols, it highlights risks in a simple-to-decipher way, alongside potential legal problems and anything significantly wrong with the property. It’s typically used for conventional and new-build homes.
• Survey level two: RICS HomeBuyer Report This provides greater detail and is generally used on homes that are in reasonable condition. You can choose between a survey, or a survey and valuation. If you choose the former, you can expect it to include everything that the RICS Home Condition Report features, as well as advice on ongoing maintenance and repairs. If you choose the latter option, you also receive a report containing all the features of the RICS report, but with the addition of a market valuation, insurance and rebuild costs, as well as advice on issues that may affect the value of the property.
• Survey level three: RICS Building Survey This is essential for older properties, or for buildings on which you are planning major building work. Expect a detailed analysis of the property’s condition, alongside advice on defects, repairs and maintenance.

If you are carrying out your own survey in addition to your mortgage valuation, it is worthwhile asking your own surveyor if he or she is on the panel of the surveyor for mortgage company. This could save you time and money as only one visit should be required.

If you have any questions about surveys, please let us know so we can help you.

Once all the relevant searches have been carried out and you have the information you need from the seller’s solicitor, you will be invited into your solicitor’s office to sign your contract. You will also need to provide a deposit; usually 10% of the purchase price to be given to your solicitor in cleared funds. This enables you to “exchange contracts”.  Once this has happened, both parties are legally committed to the sale.

Be aware – as soon as you’ve exchanged contracts, you’ll need buildings insurance in place to cover the structure of the property.  Should any damage occur after the exchange of contracts, as the legal owner of the property, it will fall on you to repair it.

At this stage, you should also consider insurance for your belongings to cover against damage that might occur in transit, or after you’ve moved in. If you have insurance at your current address, you’ll need to contact your provider to transfer the policy to your new address. Do this in good time so that cover can be put in place from the day you exchange. If your purchase falls through you can always cancel your cover.

To arrange insurance, you’ll need your new postcode, the value of the property and the value of the contents you wish to insure. You can choose a policy that covers the building and the contents combined, or opt for two separate policies. A combined policy is sometimes cheaper; even if you already have contents insurance from your previous address.

Do ensure that you secure sufficient contents insurance to cover the entirety of your furnishings, technology and belongings.

Important note: Please be aware that while most policies will cover your goods “in transit” from one home to the next, they will only do so if you have used a professional removal firm.

When your purchase completes, your solicitor will transfer the remaining money owed from their account to the seller’s solicitor’s account. Cleared funds must be in place in your solicitor’s account in time for completion. Since some of the money may come from the mortgage provider, you will need to pay a telegraphic transfer fee (usually around £25-£50).

Conveyancing disbursements are the extra costs your solicitor will pass onto you at the end of the buying process. These costs are fairly standard between solicitors in the same location.

• Bankruptcy search: Your mortgage provider will require a bankruptcy search to confirm that neither you nor anyone else named on the mortgage has ever been declared bankrupt. Your solicitor will run a check on all named parties. This will cost between £2 and £4.
• Local authority searches: The local authority will check the property against its records for local issues such as planning applications, restrictions on development, road schemes or enforcement actions. The cost of these searches varies according to the borough you live in, and some conveyancers use Personal Search Companies to perform these searches. Whichever route you choose, the cost is likely to fall between £100 and £200.
• Land registry office copies: This is a search arranged by your solicitor to confirm that your vendor owns the property they are selling. Expect to pay £4 to £8 for this.
• Environmental search: This comes as an addition to the local authority search, and addresses any concerns over the property, such as flooding or subsidence. £30 – £35 plus VAT.
• Drainage search: Performed by your water company, this is to ensure that the property is connected to fresh and foul water sewers. Costs vary according to providers, but should be between £30 and £40.
• Location searches: These will be suggested by your solicitor if the property you intend to buy is in an area with a history of mining. The cost is variable, from £40 to £250.
• Telegraphic transfer fee: This cost covers the fee for sending funds from your lending bank to the seller’s conveyancing provider. Usually £25 to £45.
• Land registration fee: This is a fixed cost that depends on the purchase price of the property. It varies from £20 for properties under £80,000, to £910 for those at a purchase price of over £1,000,000.