Introduction to 'Buying a home'
Thinking about buying a home? It’s an exciting time but can be scary too. It can involve a number of people and stages. From estate agents and lenders to solicitors and surveyors.
In this lesson, we’ll take you step by step through the whole process. From finding a place you like, to getting ready to move in.
Watch this video to see the steps we'll cover in this lesson.
Please be aware this video has been produced using AI video tools.
What you'll learn
- The steps to buying a home.
- How to apply for a mortgage.
- What to do before the move.
How long it takes
18 minutes
Find the right home
Chapter 1
How long it takes
2 minutes
Where to start
This is the fun part – finding the right home for you.
Look online
Many people start this by looking online.
You might use:
Estate agents
Most estate agents have their own websites where you can view properties that are for sale. There are also online-only estate agents. These have no local branch and everything is done via the website.
Property search sites
There’s also sites like Zoopla and Rightmove, where you can see homes sold by many different estate agents. You can search by area and filter based on what you need. For example, number of bedrooms, type of property or a price range.
Visit your estate agents
You may want to get local insights and information about the area you’re interested in. Local estate agents can help here.
This has a few benefits:
They may have details of properties that aren't yet on their website.
They're also in a good position to give you and idea of prices and demand.
They might even help your search by looking out for possible places if they know what you're after.
Check out new builds
Thinking of buying a new build home? The developers who build these may use estate agents but often sell these homes directly. To find out more about the developer, search for them online. Look for owner reviews of other homes they’ve built, too.
Before you search
It's a good idea to know what you can afford before you start looking. This gives you a realistic budget for your home.
You can apply to your lender to get an 'Agreement in Principle'. This helps you to know how much they'll lend to you. It's free to do and doesn't impact your credit score.
Want to apply for an AIP?
Here at Lloyds we have a dedicated mortgages page that can help you with tools and links to help you apply.
Idea
Want to find out more about working out how much to budget for? Why not explore our lesson 'Preparing to buy a home'.
Make an offer
Chapter 2
How long it takes
2 minutes
What's an offer?
When you’ve found a place you like, you’ll want to make an offer. This is when you let the seller know, through the estate agent, what you’re prepared to pay. You can speak to the agent, or send them an email. It’s a good idea to do both, and some agents will ask you to email to confirm a verbal offer.
How much should you offer?
This can depend on:
Your budget and how much you've saved.
How popular the place is.
How keen the seller is for a quick sale.
What similar properties in the area have sold for recently.
Start with the asking price
The asking price is what you’ve seen on the website or in the estate agent’s details.
Treat this as a guide. Think about the value of other properties in the area – are they asking a fair price? It’s a good idea to find out whether anyone else has put in an offer.
If you’re a cash or first-time buyer, make this clear. It may give you an advantage over other buyers putting in a similar offer.
Be prepared to negotiate
Know your upper limit. Your starting offer may be a bit below that, to give you room to negotiate upwards. If the seller rejects your first offer, think about how much higher you could go. Remember when you were working out what you could afford? Keep this in mind.
Take your time to weigh it all up. Bear in mind that your mortgage lender will value the property. If they think it’s worth less than your offer, you may need to fund the gap or withdraw your offer.
Sometimes, the best option is to walk away and focus on other properties that you know will be within your budget.
Lloyds have a guide to help when you’re making an offer on a home.
Hire a conveyancer
Chapter 3
How long it takes
1 minute
Why do you need one?
The legal process can take time, depending on how complex the purchase is. If you’re relying on the sale of your own home in order to buy your new place, you’re likely to be part of a 'chain'.
If you’re just buying, you’re at one end of the chain. Just selling? You’re at the other end of it. The more people in it that are both buying and selling, the longer the chain. Be patient and keep in touch with your conveyancer. Ask them about anything you don’t understand or where you need more information.
Idea
Want to explore more? Search up to 200 conveyancers with our Conveyancing Service.
Apply for a mortgage
Chapter 4
How long it takes
9 minutes
Before you start
It can really help if you prepare before you apply.
Make sure you take time to:
Work out how much you can borrow
If you haven’t already, check out our lesson 'Preparing to buy a home', which can help to work this out.
Get an Agreement in Principle
You can book an appointment or do this online. It helps you to know how much they’ll lend to you. It’s free to do and doesn’t impact your credit score.
Gather your documents
When you apply, you’ll give information about yourself, your finances and your employment. Your lender will ask for proof of these, so make sure you have these documents ready.
Documents to get ready
- Proof of ID - like your passport or driving licence.
- Bank statements for the past three to six months.
- Payslips from your employer.
- DWP letters to confirm any benefits you receive.
Be aware
Are you self-employed? Most lenders need to see at least two years of accounts for your business. That includes your tax returns, plus bank statements that show these.
If your income varies from year to year, you may need to show evidence of future income – like new clients or contracts.
Choosing a mortgage
In the next section, we’ll look at how to compare mortgage types so you can choose the one that’s right for you. We’ll cover some of the aspects of a mortgage you’ll need to decide on so you know what to look for. First up, what you want to repay.
Repayment types
When you take a mortgage you have to pay interest on it, because it’s a loan. When choosing a mortgage product, you can choose to repay just the interest each month or also repay part of the loan you have taken.
Let’s look at both of these now.
Repayment mortgages
These are more common. Each month, you’ll pay off a bit of the loan plus some interest, too. If you make all your payments, you’ll repay the whole loan by the end of the mortgage term.
Interest-only mortgage
You’ll just pay the interest each month. You don’t pay off any of the loan itself during this time. This means you’ll need to pay off the whole loan at the end of the mortgage term.
Want to know more? This guide explains how the two types work, plus the pros and cons of each.
Interest rate options
Another aspect you can consider is the interest rate on the mortgage. Again, there are two main options, tracker or fixed rate.
Fixed rate
With a fixed rate mortgage, you pay the same rate of interest for a set number of years. Many people take these out for two or five years, though longer deals are possible. In general, the longer the term, the higher the rate of interest.
Fixed rate deals can help with budgeting. Your mortgage payments aren’t linked to changes to the Bank of England base rate. At the end of the term, you’ll need to find a new deal. If you don’t, your lender will move your mortgage to a Standard Variable Rate mortgage.
Tracker
Tracker mortgages are a type of variable rate deal. They work out the Bank of England base rate of interest and add a set percentage. For example, if the base rate is 4% and your tracker is ‘base plus 1%’ you’ll pay 5%.
The base rate itself may go up or down. It’s reviewed eight times a year, so it could change each time. These deals ‘track’ the base rate during the term. So if the base rate goes up, your mortgage payments will, too. If the base rate goes down, you may end up paying less each month. These deals usually last for two years.
Be aware
There is also a Standard Variable Rate (SVR). Variable rates mean that the interest can go up or down during the term of the mortgage. Each lender sets its own SVR. This standard rate is usually higher than other types of mortgages.
If your fixed rate or tracker comes to an end, your lender will transfer you to their SVR. Or, you can find a cheaper deal.
Test your knowledge
Try again - that's not quite right!
Hint: The rate of interest for these deals doesn’t change.
That's right!
Fixed rate deals can help you budget as you’ll know how much you’ll pay every month.
Other things to consider
Repayments and interest aren’t the only things to consider when picking a product that’s right for you.
Think about whether you want or need to:
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When you buy a home with someone else, you’ll take out a joint mortgage. You might be buying with a friend, partner or family member. This could help raise the amount of money you can borrow.
Let’s take an example where you and your partner earn £30,000 each:
- Your lender lets you borrow four times your annual income.
- On your own, you can borrow up to £120,000.
- Buying together, you can borrow £240,000.
Be aware
Both your names will be on the mortgage. So, the lender will check the credit histories for both of you. If you miss a payment, this will show up on both credit reports, no matter whose fault it was. Plus, if the relationship ends, you’ll both need to keep paying the mortgage or agree to sell the home.
You may want to discuss joint ownership arrangements with your conveyancer.
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Struggling to save for a deposit? Gifted deposits are when someone gives you some or all the money for your deposit.
This can:
- Help you reach your deposit goal.
- Add to your deposit so you can get a smaller mortgage.
- Be a tax-free gift (but do check).
- Be better than a family loan as there’s nothing to pay back.
Bear in mind:
- Lenders have rules on who can gift the money – usually close relatives.
- Not all lenders accept gifted deposits.
- The person gifting the money needs to sign a letter to confirm this is a gift, not a loan.
- There may be tax implications for the person who’s gifting you the money.
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If you have a family member who’s able to help, you might consider a family deposit mortgage. These are a bit like guarantor mortgages. Some banks offer them. They may have different names, like ‘Lend a hand’ or ‘Family Boost’.
This is how they work:
Step 1
A family member puts 10% into a linked savings account for a fixed amount of time (usually 3 years).
Step 2
During this time, the savings earn interest and your mortgage rate is fixed.
Step 3
After 3 years, the family member gets their money back, plus the interest earned.
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Not sure that you can commit to a full mortgage? If you can’t afford the deposit and mortgage payments for the home you need, shared ownership may be an option. You may know it as ‘part-buy, part-rent’. It’s when you buy a share of the home and pay rent for the rest of it.
Housing associations and local councils offer this option. There are some private schemes, too. Each one has its own rule for who can apply. The main aim is to help first-time buyers.
More on this topic
The rules on shared ownership differ depending on where you live. To find out more, visit the government pages for England, Northern Ireland, Scotland and Wales.
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There may be other ways to get help from the government when you’re looking to buy a home. The GOV.UK site has details of all the current schemes.
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If you have a savings account with your mortgage lender, you can look to offset your mortgage. The amount you have in your savings is ‘offset’. This means the lender takes it off the amount of the mortgage that you pay interest on.
For example, you may have £20,000 in a savings account. If your mortgage is £200,000, you would only pay interest on £180,000. So, it can be a way to save money in the long term, though the actual rate of interest may be higher than repayment mortgages.
Be aware
With this option, you're not paying interest on the whole amount you’re borrowing – just what’s left after you’ve taken off your savings offset. So, you could make lower monthly repayments or pay off the loan more quickly.
Your savings account won’t earn any interest during this time, though. So do take this into account.
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It can be hard to get a mortgage when you’re on a low income, don’t have much saved for a deposit, or if you have little or no credit history. You may have your heart set on a property but the lender isn’t sure you can afford it on your own.
Guarantor mortgages are a way that close friends or family members can help. They do this by using their money or property as security against your mortgage repayments. So if you can’t make your repayments, the lender will ask the guarantor to pay.
These do come with risks, though. There’s a risk that your friend or family member will lose their home or savings. Their credit score may fall. If they’re using their savings, they won’t be able to access these for some time.
The lenders can see these as higher-risk, too. So, the monthly repayments may be higher than other deals. Plus, not all lenders offer this type of mortgage.
Applying
When you’re looking at the different types of mortgages, you’re likely to be checking out different lenders, too. It’s important for find one you trust. Then it’s down to how you apply.
You may decide to:
Apply online
Most lenders have this option. You’ll find it on their website.
Phone or video call
This gives you the chance to ask your lender any questions, without needing to visit them.
Meet in person
You and your lender work through the application form together.
Use a mortgage broker
A broker can help you find a mortgage and connect you with a lender.
If the lender accepts your application, it can take a few weeks to get the offer from them. The best way to help speed things along is to make sure they have all the documents they need.
To help them decide how much they’ll lend you, they’ll arrange a valuation on the property. We’ll cover this in the next chapter.
Once a lender’s happy with the application, they’ll approve it and make you a formal offer. This is usually valid for between three and six months.
Want to apply?
Lloyds have a mortgages page that gives you access to the steps, tools and links you need.
Valuations and surveys
Chapter 5
How long it takes
2 minutes
What is a valuation?
Once you’re ready to buy, the lender will want to value the property. This helps them work out how much they can lend you. You’ll need to pay for this valuation.
The valuation isn’t the same as a survey.
What is a survey?
A survey is something extra that you can get, though it can be with the same person who does the valuation. It’s a can be a good idea to get one, as they cover more detail and help to spot any issues.
It’s an expert inspection of the property you’re buying. A surveyor will visit the place to inspect it. Then, they’ll write a report that lists any problems they’ve found.
If the survey finds a problem, think about what this may cost. You may want to negotiate a lower offer with the seller, so you can afford the work to fix the problem. Depending on what they find, you may even decide that the place isn’t right for you.
The three types of survey
Condition Report
This is the cheapest option. It uses traffic light ratings to show the condition of the property and any major issues. It doesn’t go into detail, though.
This may be for you if you’re buying a new build or a modern place that’s in good condition
Homebuyers Report
The next level up. This one gives a bit more detail and includes advice on repairs and maintenance that may be needed. You can ask for this with or without a valuation.
The valuation can help you work out how much you need to insure the building for.
Full structural survey
You might pick this option if the home you’re buying is big, old or you think there’s a lot of work to do to it. The surveyor carries out extensive checks that may include looking in loft spaces and under floorboards. It's a good idea to check what they will and won't cover.
Their report gives a very detailed analysis of the state of the building, plus advice on repairs and maintenance including an idea of how long repairs would take.
Exchange contracts and completion
Chapter 6
How long it takes
2 minutes
After the survey and valuations
Once all the searches and other checks are complete, and any issues have been dealt with, you’ll be moving towards the exchange of contracts. This is when the solicitors on both sides swap copies of the contract.
Before this happens, you'll need to:
Buy buildings insurance for your new home.
Send your deposit to your solicitor.
Sign the contract.
Once you’ve exchanged contracts, you can’t easily back out of the sale without losing your deposit. On the plus side, you’ll know that it’s just as hard for the sellers to back out. To do so is a breach of the contract. Whoever does this would have to cover the other side’s costs – maybe those of the chain, too.
Be aware
The process we describe here applies to homes in England, Wales and Northern Ireland. In Scotland, it’s slightly different. If you’re buying a home in Scotland, this site explains the process.
After the exchange of contracts
You’ll get a completion statement from your solicitor. You can think of this as the bill you need to pay. It lists everything from the price of the property, the deposit and mortgage amounts through to conveyancing and other legal fees plus Stamp Duty.
Check this statement carefully to make sure it’s what you were expecting. If anything’s not quite right, now’s the time to raise it with your solicitor.
Be aware
You may also need to sign a transfer deed. This legally transfers ownership of the property from the seller to you.
Check with your conveyancer. They register the deed with the Land Registry (England and Wales), the Land Register (Scotland) or Land and Property Services (Northern Ireland).
What to expect next
A few final checks later, and it’s time for your lender to send the mortgage money over to your solicitor. It then moves across to the seller’s solicitor to complete your purchase.
Now you can celebrate – you’ve bought your new home and the keys are now yours!
After you buy
A home is a precious thing and it’s a good idea to protect it. We’ve got another whole lesson to help you think about those important first steps after you buy.
Our Moving into your new home lesson will show you how to:
- Prepare for your move.
- Insure your new home.
- Stay on top of your mortgage payments.
- Save for home improvements.
- Adjust your budget to reflect your new outgoings.
Want to learn more?
There are more lessons to help when you're buying a home.
Lloyds Bank Academy is committed to providing information in a way that is accessible and useful for our users. This information, however, is not in any way intended to amount to authority or advice on which reliance should be placed. You should seek professional advice as appropriate and required. Any sites, products or services named in this module are just examples of what's available. Lloyds Bank does not endorse the services they provide. The information in this module was last updated on 4th September 2025.