How long does it take to buy a house?

Is it worth saving for longer? 

A factor that would obviously slowdown your timeframe a lot, is if you decide to save more for a deposit. You may have been advised to do so by a mortgage advisor, or perhaps you’ve realised that you need 2 bedrooms rather than one? Whatever the reason, putting your buying journey on pause to build up your deposit can be frustrating. But it can be worth doing. The larger your deposit, the smaller your monthly repayments and the less your mortgage interest rate will be. Why? We are in economically turbulent times, particularly following the pandemic, the war in Ukraine and the mini-budget in 2022. An unstable housing market and economy mean you might need a bigger deposit for two main reasons:

• To prove you have financial stability: a lender can use a chunkier mortgage as evidence that you’re financially fit enough to buy a property. 

• A larger deposit also means less risk for the mortgage company. This is because mortgages are a “secured loan”. All this means is that if you can’t make your repayments on the mortgage, you’re obliged to hand over your property to the lender. SO, when house prices are dropping a little (as they are now), lenders want to avoid repossessing your home, only to find the value of the house is less than you owed them. This is called negative equity. which sounds scary but isn’t very common. So, the loan company wants you to have a larger stake in the property to avoid them repossessing a house that’s worth less than the loan you’re repaying.

It’s always great to have a big deposit - the bigger the better! But now is a particularly good time for buyers with bigger down payments. With this in mind, it could be worth considering whether you want to move now, or in a few months or years when your savings have increased. Though this is a delay, it will save you money in the long run, as your mortgage payments reduce as the deposit goes up. However, don’t forget that 2023 is a particularly tough time to try to save, because of inflation and the cost-of-living crisis. If you’re a first-time-buyer in rented accommodation, rent in 2023 is also very high, so waiting to pull the trigger on a house in the hope of saving could end up costing you in the long run. 

Getting your Mortgage in Principle.

So you’ve decided to go ahead with buying? Great. Once you’ve worked out how much deposit to put down, the next step is for a lender (usually a bank) or better still a mortgage broker to calculate how much money they’re willing to loan you towards the house. The lender will consider several factors in order to give you a mortgage in principle. This can usually be done very quickly. A mortgage in principle is a lender saying: “in theory, we’re prepared to lend you £X towards buying a property.” If you’re a first-time-buyer, your lender will calculate how much they’re willing to loan by considering several factors including deposit size, income and outgoings. If you already own a house then your mortgage advisor can talk to you about your options, which will include bringing your current mortgage with you (porting it) or repaying your current mortgage and getting a new one. Getting a mortgage in principle is normally a very straightforward process, although applications can be rejected. But as long as you have a reliable income and a deposit, you can often be approved for a mortgage in principle within just a few minutes. 

Wondering where you start with getting a mortgage in principle? The mortgage services at Strike handle all of your mortgage needs for you, and it’s all in one handy hub so you’re totally in control of your purchase at every step. We can arrange your mortgage in principle and everything that follows, so just reach out when you’re ready to make the jump. 

Offers and negotiations.

It’s a pretty big thrill when you find a house that ticks your boxes - especially when it’s your first time buying. Sure, the next few steps can be a bit boring or painful, but you’re buying a house! Let the excitement carry you through. Once you’ve found your place, you will want to make an offer on the property. This can be done through your estate agent or directly to the seller's estate agent. At this point you’ll provide details of your offer: the amount you want to pay, plus any conditions, contingencies and the timeframe for completing the purchase. What are conditions and contingencies? These are requirements that must be met (by bother buyer and seller) in order for the contract to become legally binding. Some common contingencies include:

• Home inspection contingency: the buyer (you) declare that you want a period of time to ensure the property is professionally inspected. These checks are for things like damp, structural defects, a leaky roof etc.

• Sale of a prior home contingency: this means the buyer needs the cash from selling their current home in order to buy the property. This contingency protects the buyer, incase they’re unable to sell their existing place and therefore need to pull out of the sale. 

Both the buyer and seller must agree to the terms of each contingency and sign the contract before it becomes binding.

Acceptance or rejection.

The seller can accept, reject or make a counteroffer (this just means they’re saying “um not quite, what about XYZ?”) on your initial offer. If they accept, then you have a legally binding agreement to purchase the property at the agreed-upon price.

Buying a house is a bit of a roller coaster. There can be some twists and turns, and (unlike a rollercoaster…you’d hope) things can go wrong and delay your ideal timeline. You’re dealing with a lot of money (and a lot of emotions!) so you’ll want to make sure you’re doing it with an agent and solicitors you can trust, in order to ensure the buying process is as efficient as possible.