Buying your first home is exciting, but it's also likely to be one of the biggest financial decisions you'll make. The good news is that the mortgage process doesn't have to be difficult. Here are the key steps to buying your first home.
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Understanding your mortgage options
Once you've decided that the time's right for you to get on the property ladder, you can find and compare HSBC mortgages online and use our mortgage calculator to get a rough idea of what you could borrow.
Here's a quick summary of some of the mortgage types and repayment options you'll come across.
- Fixed rate mortgages fix your mortgage repayments until an agreed date, no matter what happens to interest rates
- Tracker rate mortgages are a type of variable rate mortgage. They follow the Bank of England base rate during a specified period, so your repayments can vary - go up or down
- Capital repayment means that each month you'll pay off some of what you've borrowed and some of the interest on the loan. If you keep your repayments up to date, at the end of the mortgage term you'll have paid off your mortgage
- Interest-only repayment means that, you’re only paying the interest on what you’ve borrowed. You’ll be responsible for repaying the original amount you borrowed at the end of the mortgage term.
Getting a Decision in Principle
A Decision in Principle gives you a clear idea of how much you might be able to borrow from us. It's the first key step in the mortgage process.
You can apply for a Decision in Principle, over the phone, in branch or online. It should only take 15 minutes. It’s useful to have because it shows estate agents that you’re serious about house hunting and gives them an indication of the size of mortgage you may be able to get.
We base the Decision in Principle on what you tell us, our security checks and a soft credit check, which won't affect your credit file. It doesn't commit you (or us) to anything.
Finding a property
Before you start house hunting, think carefully about location and put together a wish list to take to property viewings.
When you've found your perfect home, make an offer to the estate agent. It's worth putting this in writing.
If you have your Decision in Principle, estate agents and sellers may look on you more favourably. You're more likely to be able to move quickly, which can help if you're about to become part of a property chain of buyers and sellers.
Applying for a mortgage
You can apply for your mortgage, over the phone, in branch or online.
We'll ask you to provide some supporting documents so we can evaluate your application. Have all of these ready to help the process go as smoothly as possible.
You'll set up personal security details as part of the process. With these, you'll be able to access, update and continue your application online at any time.
Applying in a branch or over the phone
- Arrange an appointment with one of our mortgage advisers. They'll advise you on your mortgage and take you through your application
- Before your mortgage appointment, provide us with your supporting documents. This will be explained to you when you make your appointment.
- If you know what mortgage you want to apply for, you can apply online but you won't receive any advice
- Use our Mortgage Document Uploader service to provide your supporting documents. We'll email you the link for this after you've completed your mortgage application.
Finding legal representation
You'll need to appoint a solicitor or licensed conveyancer to represent you. This is your responsibility so try asking family and friends for recommendations or research local firms.
Once you've chosen your solicitor or licensed conveyancer we'll check to see if they meet our criteria. If they do, then your chosen firm can act for you and HSBC.
Valuing your property
We'll carry out a Standard Valuation of your property to confirm its value. This is for our benefit as a mortgage lender. We don't charge a fee for our Standard Valuation on our residential mortgages.
For peace of mind, you may want to arrange a more detailed survey at your own expense.
- A Homebuyer Report covers any urgent defects and problems
- A Building Survey gives a fuller picture of the property’s construction, condition and maintenance needs.
Reviewing your mortgage offer
If we've approved your application, we'll send you your mortgage offer, usually by email. Review it carefully and let us know if there's anything you don't understand or that doesn't look right. Otherwise you don't need to contact us.
Carrying out the legal work
Your solicitor or licensed conveyancer will deal with all the legal aspects of your mortgage. This involves carrying out legal checks called enquiries (with the seller's legal representative) and searches (with the local authority and other bodies).
They'll get the seller to fill in a questionnaire about the property and ask you for your deposit.
Tell your solicitor or licensed conveyancer if you've opened a Help to Buy: ISA. They'll be responsible for claiming your 25% government bonus. You should also let your ISA provider know that you are closing the account.
Exchanging and completing
Once your solicitor or licensed conveyancer has completed all the legal work, you can agree a completion date and exchange contracts with your seller. Your deal is now legally binding and although you might not have the keys you now own your first home.
If you had a Help to Buy: ISA, the government will pay the bonus to your solicitor or conveyancer. They'll add it to your funds at completion. You can't use the bonus for your deposit or for any of the fees associated with buying your home.
On the completion date, we'll release the funds for your mortgage. Don’t forget it will be your responsibility to arrange buildings and contents insurance. You can now move into your new home.
How to apply
Applying for a mortgage involves two stages, firstly getting a Decision in Principle; secondly making a mortgage application.
Already started an application?
If you started a mortgage application over the phone or online, you can log on to complete it or track its progress.
Think carefully before securing other debts against your home.
Your home may be repossessed if you do not keep up repayments on your mortgage.
† Lines open Monday – Saturday 08:00 – 20:00, Sunday 09:00 – 18:00. Calls may be monitored and recorded. Opening hours within the mortgage departments may vary.