How it works

Everything you need to know before you pop that cork!

The purchase of your first home can be a daunting experience. But doing your homework will help you avoid the pitfalls that many first time buyers fall in to. Our step by step guide below will guide you through the process, with explanations of key terms provided in our glossary.

Step 1: Work out how much you can borrow

Use our online mortgage calculator to help you. Based on your salary and existing monthly commitments, we can give you an idea of how much we'd be able to lend you. Go straight to the mortgage calculator from most places on this site.

Step 2: Identify the right mortgage for you

It's vitally important that the mortgage you choose fits your individual circumstances. We've created a mortgage selector tool to help you work out which is the right mortgage for you.

Bristol & West Mortgages has a range of products to suit your needs. Once you've selected your favoured option, you'll need to request a Key Facts Illustration which details in full the mortgage options you've chosen. As part of Bristol & West Mortgages regulatory requirements you must have a Key Facts Illustration before applying for your mortgage.

You can request a Key Facts Illustration by contacting us.

It's also important to consider how you would manage your mortgage repayments should the unexpected happen. You can take out life insurance cover or Mortgage Payment Protection Insurance to ensure that your home is protected for you and your family.

Repayment options

You must understand and be comfortable with the way you choose to pay back your mortgage, either on a repayment or interest only basis. You can also combine these methods on a part repayment and part interest only basis.

Repayment mortgage

With a repayment mortgage, you pay off the amount of money you've borrowed plus the interest charged. You will gradually pay off the amount borrowed over an agreed term. Your monthly payment covers the interest we charge for the loan and also repays part of the money borrowed. In the early years of your mortgage term, the bulk of your monthly payment is interest. However, in time, as the mortgage balance reduces so does the proportion of interest. So as you approach the end of your mortgage term, most of your monthly payment is paying off the amount of money you've borrowed. Assuming that you maintain the payments, the mortgage will be repaid at the end of the mortgage term.

Interest only mortgage

There are a variety of interest only mortgages, but the monthly payment you make is only covering the interest charged for the mortgage.

If you choose an interest only mortgage it will be your responsibility to ensure that you have adequate means to repay the capital at the end of the mortgage term. This could be via such methods as an investment plan (e.g an ISA), existing shares, an inheritance, sale of the property, or the sale of a Buy to Let property. We recommend you consult an Independent Financial Adviser (IFA) to discuss the right repayment method for you.

What expenses are there when taking out a mortgage?

There will be other costs that you will have to bear in mind when you take out a mortgage including:

  • Deposit: In most cases there will be a minimum 10% deposit. So, if you were to buy a house for £200,000, you'll need to have at least £20,000 to put down as a deposit.
  • Conveyance fees: You'll need a solicitor and/or conveyancer to handle the legal elements of buying a house, such as checking the land registry details, conducting any necessary searches and changing of names on the title deeds.
  • Local Searches: Your conveyancer/solicitor will get local information about the property you want to buy and the surrounding area. This is obtained from the local authority to ensure that there are no potential problems that could devalue the property, such as new road plans or local boundary disputes.
  • Disbursements: Your solicitor or conveyancer will incur various fees as they request information from the land registry and from various other sources in the case of searches. These fees will be passed on to you.
  • Lenders' Valuation: We will conduct our own basic survey. This will allow us to assess the value of the property, ensuring that the value of the property will give sufficient security for the mortgage. You can also choose to have a Homebuyers Survey, a more detailed report that provides more information about the overall condition of the property.
  • Fund Transfers: The transfer of money electronically from one banking or finance institution to another can also incur charges. Make sure you confirm what these charges may be based on the amount you will be transferring.
  • Higher Lending Charge: For our first time buyer mortgages; first start and professional mortgage, HLC's are paid by Bristol & West Mortgages, so you will have no HLC's to pay.

    On some of our mortgages, where the loan required exceeds 85% LTV of the lower of the purchase price or valuation (and is not a product described as 'HLC paid by Bristol & West Mortgages'), you will pay the following additional security fee on the excess loan over 75% LTV:

    • over 85%-90% - 7.25%
    • over 90%-95% - 8.65%
  • Stamp Duty: You will have to pay the Government tax on purchase of most properties valued above £125,000.
  • Moving costs: You should remember to budget for the cost of packing, removal and potentially storage of your belongings before you move into your new home.

Step 3: Gain Approval in Principle

If you want to proceed, then the next step is to ask us for an Approval in Principle. This is when you find out if, in principle, we'll offer you a mortgage and confirm how much we'll lend you. You need to contact us to arrange this.

Step 4: Find the property that's right for you

Once you've got an Approval in Principle, you'll know the maximum price you can afford to pay, allowing you to look for your dream first home.

Choosing an area

Location, location, location! Price is often the deciding factor but the more flexible you are in the areas you consider, the better the choice you are likely to have. Consider whether the area is convenient for your commute to work? Do you need local transport links? What about schools, if you have a family to consider? Do you need a garden? Is the house big enough for today and whatever tomorrow may bring?

How to buy

The usual way to buy a home is via an estate agent. An agent usually charges the seller a fee, not the buyer. Auctions, private sales and the internet have become increasingly popular. The internet can be a very useful tool when buying a home, in terms of helping you research areas, looking at online estate agent listings and auction sites.

Take your time

Research is the key to finding a home that is right for you. Make sure that you visit a property several times and at different times of the day, and different days of the week. Check out the neighbourhood, and if you're buying on your own take someone whose opinion you value for that important second opinion.

Step 5: It's time to make an offer

Decide how much you would like to offer for the property and contact the sellers' agent. If the seller accepts your offer, it will be 'subject to contract'. This means that both you and the seller have agreed in principle to proceed with the deal, but neither of you are legally bound.

Once the seller has accepted your offer, and you have received a Key Facts Illustration for your chosen mortgage deal, you can apply for your mortgage.

Step 6: Engage a solicitor and apply for your mortgage

Now is the time to choose a solicitor. If you don't already have one, you may wish to consider LMS who can arrange this for you. Make sure you get a full breakdown of all their costs before you engage them.

The next step is for us to arrange a valuation report, which you will have to pay for. This report ensures the property is worth the amount you want to borrow. This is a basic valuation and may not highlight potential problems that might arise with the property. You should consider carrying out a more detailed survey.

The three main types of survey.

Mortgage valuation report

This is carried out either by one of our valuers, or by an independent panel valuer. You'll receive a copy of this report, but its main purpose is for us to value the property as security for your loan. The report is based on a limited inspection of the property. It won't necessarily highlight any longer-term issues with the property. We strongly recommend that you independently obtain a more detailed report on its condition and value, based on a fuller inspection.

Homebuyers' survey and valuation

This is a more detailed report (often called a Property Purchase Survey and Valuation). Approved by the Royal Institution of Chartered Surveyors (RICS), it will give you information on the property's state of repair. It gives information on the significant aspects of the property's condition and the surveyor's/valuer's opinion as to its market value. Although it's a more detailed survey, it doesn't inspect parts of the property which are covered, unexposed or inaccessible. Fees for this survey are more than for a mortgage valuation report. However, if you go through Bristol & West Mortgages, we can usually arrange for the same surveyor/valuer to do both.

Building survey (formerly known as a Structural Survey)

This survey is an investigation and assessment of the construction and condition of a building. It does not normally include valuation advice. The extent and cost of the survey will depend on the agreement between you and the surveyor.

Whatever survey you ask for, we advise you to speak to the surveyor first and find out what they involve, both in terms of cost and checks carried out. Please note that the building survey does not include a valuation, so we will still require a mortgage valuation report.

Once the survey is concluded, you've completed the application form and we've made all the relevant checks, which will include confirming that you can afford to repay your mortgage loan, we will send out your Offer of Loan to you.

What if the survey highlights issues?

The amount you offer for the property is not finalised until you exchange contracts. If, for example, the survey finds that extensive work is required, then you can try to negotiate the price down to compensate you for the future expense.

Your solicitor/conveyancer will check the legal documents relating to the ownership and use of the property. They will also carry out local authority and other searches to check if there are any matters which may affect the value of the property.

Step 7: Exchange and completion

Once your solicitor has completed all the checks, both parties are ready to exchange contracts. This means signing identical copies of the contract for sale which the solicitors exchange. This is when you pay your deposit through your solicitor. At this point, both parties are legally bound to proceed with the transaction. If you pull out after exchanging contracts, the seller is entitled to keep your deposit.

However, before you can complete (in other words actually take ownership of the property) you'll need to sign the mortgage deed and the document that transfers the property over to you. Make sure that any buildings and contents insurance are in place for the exchange date.

Step 8: Moving day

Prior to moving, inform the utility companies of your move. You'll need to redirect mail and inform others (your bank, employer, mobile company etc) of your new address. Don't forget to let all your friends and family know your good news!

How long should the process take?

This is impossible to say as it mainly depends on how many people are in your chain. Most people who are selling a property are also buying another. So if there is a 'break in the chain' somewhere up or down the line, this affects everyone! You can't move in because your seller can't move out.

Once you've completed - Congratulations! You're the proud owner of your first new home. You can collect the keys and move in to your new home and open that bottle of champagne!

Always remember however, that your home may be repossessed if you do not keep up repayments on your mortgage. You may wish to consider Mortgage Payment Protection or life assurance which can cover the cost of repayments should the unexpected happen.

Buying in Scotland?

Buying property is different in Scotland. Here's how it works:

  1. Appoint a solicitor before you start looking as the process can move quickly. Once you've identified a property, instruct your solicitor to 'note interest' - this is informing the seller's solicitor that you're interested in buying it.
  2. You'll be advised of the asking price and invited to make a secret bid in writing above this amount - a verbal offer isn't enough. This is called the 'offers over' system. The highest bidder is legally obliged to buy the property.
  3. You must apply for a mortgage before making a bid so that you know exactly how much you can afford. You should also have a survey carried out before you make the bid, as the result of the survey may affect the amount you offer.
  4. A closing date for bids will be announced once the selling agent has been notified of all interested parties. Your solicitor will submit your offer and a proposed 'date of entry' (the date by which the money will be transferred and the keys received).
  5. If your bid is successful, you 'conclude the missives'. This is when both parties' solicitors exchange letters agreeing the date of entry and so on. Once the seller's solicitor sends you a letter of acceptance, you should insure the property.
  6. You then sign the title deed and receive the 'disposition document' and keys, once your funds have been transferred to the seller's solicitor.