Step 1 – Budget
Work out what you can afford
Before you go house hunting, you need to know how much you’ve got to spend and what it’s going to cost you each month.
- Work out how much of your income is already allocated and how much you have left for your new mortgage
- Our mortgage advisers will be able to help you with this and advise on how much you can borrow in total
- You can work out your monthly payments with our mortgage calculator
Don’t forget the deposit
You’ll usually need to put down at least 5% of the value of the house you’re buying as a deposit.
- The higher the deposit, the lower your LTV (Loan to Value, or the amount you can borrow compared to the total value of the house) will be. This should mean you will get a better mortgage rate
Step 2 – Add in other costs
As well as the mortgage and deposit, you’ll also need to factor in other costs when buying a house. These include:
- Solicitor’s fees These will generally include fees for land registry and other searches on top of their usual fees. Ask your solicitor to provide full details
- Mortgage arrangement fees These can include application fees, arrangement fees, booking fees, etc. Our mortgage advisers will give you full details of these costs
- Valuation and surveys Many of The Nottingham’s mortgages offer free valuations – again our mortgage advisers can give you more information on this.
- Stamp duty This is a government tax you have to pay if you buy a property for more than £125,000. The duty you have to pay depends on the purchase price of the property.
| Purchase price |
Stamp Duty rate |
| Up to £125,000 |
Zero |
| Over £125,000 to £250,000 |
1% |
| Over £250,000 to £500,000 |
3% |
| Over £500,000 to £1 million |
4% |
| Over £1 million |
5% |
- Insurance Remember to include the costs of buildings and contents insurance, mortgage payment insurance, life insurance, etc. The Nottingham specialist financial advisers will be able to help with this
- Moving in costs Removals firms, phone connection, broadband connection all cost, so remember to add these in too
Step 3 – Choose the right mortgage
There is a huge range of mortgages out there, all with different rates and repayment periods. Don’t worry – our expert advisers are on hand to help you find the right deal. All you have to decide is which type of mortgage you want – fixed or variable – and how are you going to pay it back – repayment or interest only.
- Repayment mortgage This means the payments you make each month reduce the balance of your outstanding debt over the term of the mortgage as well as paying off the interest
- Interest only Your payments only go towards paying off the interest on your mortgage and the outstanding amount remains the same. If you choose this option, you’ll need to think about how you’re going to pay off the balance at the end of your mortgage term
- Fixed rate The interest rate on your mortgage is fixed for a set period, so for that time you have the security of knowing exactly how much your monthly payments will be, even if the Bank of England changes base rate
- Variable rate The interest rate on your mortgage may go up or down each month as it is linked to the Bank of England interest rate or the lender’s own variable rate. This means that your monthly payments could change as well.
Our specialist mortgage advisers will look at our complete range of mortgages and pick out the one that best suits your needs. If we don’t have the perfect fit for you, we’ll search the whole of the financial market to find a mortgage that is. Just pop into one of our many local branches throughout Nottinghamshire, Lincolnshire, Derbyshire and South Yorkshire and have a chat with us about your best options.
Click here to find your nearest branch
Step 4 – The Agreement in Principle
Once you’ve had a chat with our mortgage specialists and you’ve worked out how much you can afford, they’ll be able to give you an ‘Agreement in Principle’ certificate (AIP). This confirms how much you can borrow and shows estate agents and the people whose house you are interested in that you are serious about buying. The AIP is free and doesn’t involve any credit checks.
Step 5 – Make an offer
As a first time buyer, you’re in a strong position when it comes to making an offer on a house. You don’t have a property to sell so you can move far more quickly than those who do, which makes you very attractive to sellers.
Once you’ve found your dream house, you should make the initial offer through the estate agent (if the property is on the market with us, you’ll find our estate agency team friendly and professional) who will put it to the vendor (the person selling the house) on your behalf.
Step 6 – Make a full mortgage application
Once your offer has been accepted, you need to tell us so we can complete your mortgage application. We’ll run credit checks on you (and your partner, if it’s a joint application). We’ll also need proof of:
- Your identity
- Your income
- Your current address
so make sure you have the right documentation in place.
We’ll also need to check that the house you want to buy is worth what you’ve offered for it and doesn’t have any major problems such as subsidence or dry rot. We’ll arrange a survey for you called a Mortgage Valuation report (MVR) to check this out and to give you peace of mind that you’re buying a good, sound property. This is the most basic check needed by every mortgage provider to check it is worth enough to lend the amount requested – it won’t necessarily highlight problems with the property.
You may also choose to organise an additional survey, there are two options you can go for:
- HomeBuyer’s Report This gives the same information as the MVR as well as reporting on the general state of the house and how it has been maintained. This costs more than the MVR but will show up potential issues with the property
- Detailed Building Survey This gives detailed information of the structure and condition of the property but no valuation figure, this is given in the MVR. This is especially useful if you are buying an old property as it will highlight any previous problems as well as those that might occur in the future
Step 7 – Find the right solicitor
When you’re buying something as expensive as a house, you need to be certain that all the legal paperwork is done properly, and for this you’ll need a solicitor or licensed conveyancer.
We have strong relationships with local solicitors who offer professional services for both buyers and sellers at excellent rates, so ask us for details and recommendations.
Step 8 – Exchange contracts
Once you have your mortgage offer in place and your solicitor has confirmed that all the checks have been made and he is happy with everything, then you can go ahead and ‘exchange’ contracts. This means you sign a contract legally committing you to buying the property, pay the deposit and agree a completion date. It’s worth noting that if you decide to pull out of the purchase at this point, you could lose your deposit. This is also the time to sort out your insurance and protection needs – our advisers will be happy to help you with this.
Step 9 – Complete
Your ‘completion day’ is the day when the money is transferred from your mortgage provider to the seller. Your solicitor will organise this for you – then all you have to do is collect your keys and start the next stage of your life.