Mortgage journey – Scotland

Speak to a Mortgage Adviser 

Before you start looking for a property, it’s important to know how much you can afford to borrow. This involves assessing your finances, including your income, expenses, and credit score.

Get a Decision in Principle (DIP)

A Decision in Principle (also known as a mortgage in principle and an agreement in principle) is an estimate of how much you could potentially borrow. It is advised to get this before you start house hunting, as it shows sellers and state agents that you’re a serious buyer.

Instruct a conveyancer

Instructing a conveyancer to handle the legal aspects of your property purchase is crucial. In Scotland, a solicitor is responsible for putting in the offer and negotiating. We have a list of trusted partners we can recommend ensuring your transaction goes smoothly and efficiently. 

Find Your Dream Home 

Start searching for properties within your budget. Take your time to find the right home for you. Rightmove, Zoopla and local estate agents can help you with this. 

Home report

Before listing a property for sale, sellers are required to prepare a Home Report for potential buyers. This report comprises an Energy Performance Certificate (EPC) and improvement recommendations. Additionally, a Survey is conducted by a qualified surveyor from the Royal Institution of Chartered Surveyors (RICS), assessing the property’s condition, necessary repairs, and valuation. It will also include a mortgage valuation. The report also contains a property questionnaire, providing details on council tax band, local authority notices, alterations, parking, flooding history, and repair responsibilities. When you receive the Home Report for a property you’re interested in purchasing, make sure to read it thoroughly to understand the running costs and to inquire about utility bills. 

Make an Offer

Once you’ve found a property you like, your instructed solicitor will make an offer in a formal letter for you. In Scotland, the value of a house based on the home report is typically used by lenders for mortgage applications. For example, if you’re planning to buy a house with a 5% deposit and the home report lists the property’s value at £80,000, but you’ve offered £85,000, you’ll need to cover the difference. This means you’ll have to pay a 5% deposit on £80,000, which is £4,000, plus the £5,000 difference between the home report value and your offer. In total, your deposit would be £9,000.  With all of this in mind, if your offer is accepted, you’ll move on to the next step. 

Secure a Mortgage Offer

Your mortgage advisor will formally apply for a mortgage with your chosen lender. This involves providing further financial information and undergoing a credit check. This usually takes between 2 to 4 weeks on average to assess, and if successful, the bank will issue your mortgage offer – which means they are happy to lend you the money. 

Speak to a Protection Adviser

It is time to talk about protection! It is important to find the best options for home insurance, life insurance, and mortgage protection. Get expert advice tailored to your needs to ensure you and your family are financially protected.

Kick-Start the Legal Process

The seller’s solicitor will send a qualified acceptance, meaning the property will be yours once the contract details are final. The solicitor will also provide key documents about the property. It’s important to review all these documents with your solicitor, as they might have additional questions for the seller. At this stage, neither party is legally committed to the sale.

Exchange Contracts

When both parties agree on the contract details, the solicitors will exchange letters, known as the ‘conclusion of missives.’ This exchange legally commits both parties to the sale. From this point both parties are committed to the sale, and penalty fees in the contract discourage either party from backing out. Your home insurance should be arranged from this date, make sure you speak to your protection adviser, so they can make the necessary arrangements.

Complete the Purchase

On the completion date, the funds are transferred, and you officially become the owner of the property. You can then pick up the keys and move in! 

Final Steps

After completion, there are a few important final steps to take care of. These include setting up utilities like electricity, gas, water, and internet. Also, inform relevant parties of your change of address, such as banks, NHS, car insurance providers and subscription services. Taking these steps will help you settle smoothly into your new home.