Home Mover Guide

A Guide to Moving Home and taking a new mortgage

You’re ready to move home either because you need extra rooms, a bigger garden or moving to a home closer to the school catchment area. Do you know how much you can afford? Have you had a valuation on your current property? There are plenty of factors that go into this process – it’s not just about how much you earn and how much the house costs. So, let’s walk through the steps you should take before making an offer on your new home. As long as you follow these tips, your dream house move will become closer to reality. 

Valuation of your current property

When looking to sell one home and buy another, an important part of the initial journey is to understand the value of your current home. This will help you calculate the amount of equity you have after fees have been deducted, to establish the deposit you’ll need to put down on the new property. As a general rule, speak to three estate agents to understand their fees, how they manage viewings and their reputation of selling homes in your local area.

Get an idea of how much you can afford

Initially you will need to check how much you can afford from a bank or building society and you can do this by using our mortgage calculator. Check out our Mortgage Calculator to see how much you can afford. Most calculators you find are generic calculators applying the logic of income, outgoings and then providing an income multiplier between x4-5 of your joint or single income. Please contact a Home Group Advisor here for a personalised agreement in principle and the amount you’ll be able to borrow from a lender once a full affordability assessment has been carried out.

Calculate moving fees and available deposit from existing property

Once you have had your home valued and you have instructed your estate agent, you’ll be able to calculate how much equity you have for your deposit. You’ll need the following information:

• Expected house sale value
• Estate Agent fees
• Outstanding mortgage balance
• Stamp duty on a new home
• Solicitor costs for selling current property and buying new property

Max Home Price Calculation:

House Sale Price 

Subtract

– Estate Agent fees

– Outstanding mortgage balance

– Solicitor costs 

– Stamp Duty

= Available Equity towards new home 

+ Savings (if you’d like to add) 

= Total Deposit on New Home 

+ Maximum Mortgage Borrowing 

= Maximum New Home Price

NB: Some other costs i.e.solicitor searches, mortgage advice fees and survey costs are paid upfront outside of equity

Deposit, Fees and Insurances

To purchase your dream home you will require a deposit; this varies across mortgage lenders but in most circumstances you need a minimum of 5-10% deposit. E.g. If you want to purchase a home for £200,000, you will need a 10% deposit (£20,000) and therefore require a £180,000 mortgage. 

As part of buying a property there are other things to consider, such as solicitor costs, mortgage advice fees, stamp duty and survey or valuation costs. You can check out our stamp duty calculator here.  

A Home Group Advisor will talk you through the costs you need to allocate outside of your deposit. 

You also need to ensure you are budgeting in your monthly expenses for insurances. Taking out a mortgage is a big step and if you are unable to keep up your repayments your home may be repossessed; you’ll need to consider things such as life cover, income protection or critical illness as well as insuring the contents of your home. While these are optional, buildings insurance is compulsory.

Securing a Mortgage In Principle

If you’re wondering how to secure a mortgage in principle, it’s not as complicated as it may sound.

A mortgage in principle is when you apply for a mortgage, via a mortgage lender (a Home Group Advisor will arrange this for you) supplying your personal, income and credit information.

A background credit check is then carried out by the lender. Don’t worry, this won’t affect your credit rating because it only leaves a ‘soft footprint’ and, once clear, it essentially provides you with the confidence to make an offer on the property of your dreams as you know the necessary funds will be made available by the lender as and when they are required. 

As this is not a full mortgage offer, a full application – approved by an underwriter and a mortgage valuation – will be required. But a mortgage agreement in principle can be shown as proof to an estate agent that you are a viable buyer and can obtain the mortgage you need.

Finding your new home

Once you have your agreed budget (mortgage plus deposit), your maximum purchase value will be known and you’ll be able to search for properties within that price range. Normally you can find properties via popular property sites such as Rightmove or Zoopla, or you can get in touch with a local estate agent to guide you in the right direction.

What to look out for when viewing a property

When purchasing a property there are lots of things to look out for and consider, from the condition of the property and the availability of local amenities to whether the footprint is large enough for your needs.

In the majority of instances you should take out a homebuyer or full structural survey to determine whether the property has any defects or areas requiring immediate attention. 

Naturally it is difficult to find a property that ticks every single box so you may need to make the odd compromise you before finding the right home for you within your budget.

Making an Offer on your Home

Once you have found your new home and you have your deposit, funds for all the associated costs and home mover mortgage in principle agreed, you are able to make an offer on the property. 

The formal offer on a property will normally be done via your estate agent. This is a non-legal binding offer that the vendor (or seller) will either agree or decline and it may take some time with the estate agent to agree an offer between all parties. 

Once the offer is agreed, the accepted offer will be the price that is used for your mortgage application and the deposit amount will be based on this. However, as part of the mortgage application a surveyor will complete a valuation or survey on the property to determine whether the property is worth the price being purchased at (your agreed offer). 

In some instances the valuation and accepted offer may vary, in which case you’ll need a deposit based on the ‘value’ not the agreed price, as this is the most important figure.

Instructing a Conveyancer or Property Solicitor

As part of the homebuying journey you’ll need a Conveyancer or Solicitor to manage the legal process of purchasing the property. This involves liaising with the vendor’s (seller’s) solicitors, who carry out searches on the property in question in a bid to uncover any information that needs to be taken into consideration before the purchase is completed. 

The solicitor also manages the drawing of funds from the mortgage lender and transferring of funds to the vendor’s solicitor at completion. The conveyancer or solicitor acts for you as a legal representative during the purchase process and also has obligations that must be met for the mortgage lender as part of drawing of funds.

Road to securing the keys to your Home

You are now on the journey to securing the keys to your home, but you are not quite there yet. The offer is agreed on the home, the solicitor or conveyancer you are using is instructed and you’ve submitted the mortgage application. 

Before you are handed the keys to your new home though, the mortgage valuation needs to be completed and the underwriter needs to approve the mortgage and issue the formal mortgage offer. 

You will also have some solicitor information to complete i.e. signing contracts and reviewing local searches that the solicitor conducts, to find out about any legal obligations of the property or any planning in the local area etc. 

Once the mortgage offer is issued and the solicitor has completed their legal work, they will start to liaise with the vendor’s solicitor to agree an “exchange” and “completion date”. “Exchange” is the legal agreement to purchase the property pending completion. 

Your solicitor will manage the process of drawing funds from the mortgage lender and managing the third party solicitor.

Completion Day

Once a completion date has been agreed, you are almost there. On the day of completion, as soon as all the funds from the mortgage lender and deposit have been transferred to the seller, both solicitors will confirm completion and confirm you as the homeowner. Normally at this point you will head down to the estate agent and collect your keys.