Buying a property
The basics - a step by step guide

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, although some lenders have recently announced income multiples of up to 6 times annual income. If you are buying with a partner, the figure will be typically 2.75 to 3 times your joint earnings.

Higher multiples may also be available if you are a professional and some lenders nowadays base their calculations on how much they believe you can afford.

House hunting
Find out what is available in your desired area. 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, make an offer.

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. 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.

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 liaising with the seller’s solicitor.

If you're buying or selling a home from 1 June 2007, you will need to know about Home Information Packs (HIP). Sellers must receive a HIP before they put their property onto the market. The HIP for buyers will offer essential information about the property they wish to purchase, for free.

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 could lose your deposit.

Completion normally takes place around four weeks later and on this day the mortgage monies are passed on to the seller.

This article is for your general information and use only and is not intended to address your particular requirements. Although endeavours have been made to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No individual or company should act upon such information without appropriate professional advice after a thorough examination of their particular situation. Your home may be repossessed if you do not keep up repayments on your mortgage.

Article date: 03.07