Buying a first home Part 2: Mortgages, solicitors, contracts & keys

First time buyer

Once you have had your offer accepted, the next thing to do is appoint a solicitor. It is worth shopping around because prices can vary but be sure to base your decision on reputation rather than simply price. The solicitor's fees usually include all of the charges such as Land Registry searches as well as the Stamp Duty tax. Once you have decided on a solicitor, let your estate agent know the details.

Mortgage application

It is then time to proceed with your mortgage application. The mortgage provider will ask for specific details regarding your financial circumstances. They will run a credit check so it might be a good idea to attain a copy of your credit report from either Experian or Equifax to ensure that all of the details held are accurate.

The mortgage company will also want evidence, such as ID, proof of address, payslips and deposit.

Valuations and surveys

Assuming everything goes to plan, your mortgage will be then approve the mortgage, subject to valuation. It is at this stage that the mortgage provider will send someone to the property to value the house. There is usually a fee associated with this so be prepared.

On occasion, the mortgage provider may value the house at less than you have agreed to buy it for. The mortgage lender will explain the reasons for this. This can be a difficult situation; as the lender will only be willing to cover 90 per of the 'value' of the house, rather than what you are paying for it. This would mean that you would have to supply a larger deposit or renegotiate the price with the seller. Worst case scenario, it could mean pulling out of the sale altogether.

It is also at this stage that you will want to have a survey conducted on the house. A survey gives you peace of mind that there is nothing wrong with the property. If there is, it gives you time to pull out from the sale or renegotiate the terms of the sale with the vendor.

Mortgage providers will frequently offer to conduct the survey as well as the valuation for an additional charge. Whether you want to do this or go with a third party surveyor is up to you. As they say; two opinions are generally better than one.

Property insurance

All mortgage lenders insist on building insurance before they release funds. This is a good time to start shopping around for property insurance. This needs to be in place from the day of completion, so it's good to be prepared.

What does the solicitor do?

During this time, the solicitors should be busily working away at drawing up the paperwork and conducting searches. Your solicitor will contact the seller's solicitor and request a draft contract. It is a good idea to take a look through the draft contract yourself so ask the solicitor to send a copy through to you. The key thing at this stage is to remember not to panic. Keep in close contact with your solicitor, the mortgage company and the estate agent but remember to be patient; searches can take some time to come back and communications between the solicitors can also be time consuming.

Once the contract has been negotiated, a completion date will be agreed. This is the day when the deal will be finalised and the transaction will be complete. This date must be agreed before the contracts are exchanged.

Two weeks is an average amount of time from the exchanging of contracts to the completion date although it can be more or less. If there is a chain involved (the seller is buying another property), the completion date may need to be agreed with more than the two parties.

It is at this stage that your mortgage offer will be finalised. The lender will then send you a mortgage deed to sign.

Exchanging contracts

Before exchanging contracts make sure that you are happy with every aspect of the sale. Ensure that you are satisfied with the survey, the mortgage terms, the completion date and the details of contract. Also make sure that you have building insurance ready to go. Finally, ensure that you have all of the funds for the deposit and Stamp Duty in place.

Contracts will then be exchanged - which is usually done between the solicitors - and the deposit will be handed over. This is the point of no return; if you pull out of the sale at this stage you are likely to lose the deposit and could even be sued for breach of contract.

It also locks the seller into the sale, which means you don't have to worry about gazumping; a term used when a seller accepts an oral offer but then takes another higher offer at the last minute.

The solicitor will draw up a transfer document and carry out any final outstanding searches.

Completion day

At this stage, you will have overcome one of the most trying experiences in life. You will have visited countless houses, negotiated with estate agents, split hairs with solicitors, and regaled every aspect of your financial life to mortgage lenders; you will have heard a thousand no's for every yes. You will think that this day would never come, but it does.

On completion day your mortgage lender will transfer the funds to the seller. Once the full payment has been transferred, you will receive the keys and your solicitor will receive the transfer deeds. The solicitor will complete a tax return, which you will need to sign for the Stamp Duty.

Congratulations - you have just purchased a house. Enjoy your new home, you deserve it.