10 steps to buying a home
Our easy 10 step guide will take you through the home buying process, perfect for first time buyers or home movers looking for a refresh.
Choose a mortgage with us, and our experts will be with you every step of the way.
Your in-branch Mortgage Arranger will provide you with information about our products to help you make an informed choice. We do not provide mortgage advice, for that you may need your own mortgage advisor.
Before you begin house-hunting, you’ll find it invaluable to talk with a Mortgage Arranger at one of our branches.
Your Mortgage Arranger is experienced in the property-buying process and has good knowledge of the other financial services that you may need – insurance for example.
They will ensure your application progresses swiftly and your Mortgage Arranger is a good source of useful information. Additionally, you’ll be dealing with a legal professional – either a solicitor or advocate (except in Alderney where you deal with an estate agent).
How much can you borrow?
Your Mortgage Arranger will provide you with quotes to give you an idea of repayment levels, so you can budget accordingly.
A mortgage can be repaid over a period of up to 35 years depending on circumstances.
Having as big as a deposit you can comfortably afford means you borrow less and will pay less interest leading to lower monthly repayments. The more you can save for a deposit, the less you will have to pay back in the long run.
This is why it is a good thing to start saving early.
Three things affect the amount that we will lend you:
- The market value/purchase price of the property
- The loan to value of the property
- How much you can afford
When buying a property, your mortgage is not the only cost you will have to consider. There will also be valuation or survey fees, an arrangement fee (if applicable), legal expenses, stamp duty (document duty in Guernsey and Alderney, recordal fees in the Isle of Man), and insurance cover. If you are selling an existing property there may be estate agent fees too.
How much can you afford?
We will help you to work out all the various costs before arriving at a final figure.
Your Mortgage Arranger will be able to calculate the actual amount your mortgage will cost, and help you to plan your budget accordingly. Together you will ensure that you can comfortably meet your repayments.
As a general rule, your monthly mortgage (and other monthly financial commitments) should not be more than half your monthly income after tax.
The more you can save for a deposit, the less you will have to pay back in the long run. This is why it is a good thing to start saving early.
A repayment mortgage
This is the most popular type of mortgage. With this type you repay part of the capital each month along with interest on the outstanding balance. So your payments will gradually reduce the mortgage over an agreed number of years. It will be repaid in full by the end of the agreed term so long as you make each payment when it is due.
An interest only mortgage
When you have an interest only mortgage, your monthly payments only pay the interest charged on the amount you borrowed. This means the interest only balance (the capital) doesn't reduce and you'll need to have separate plans to pay this amount by the time your mortgage ends.
There are two types of Repayment and Interest Only mortgages:
1. Fixed Rate Mortgage
Unlike most mortgages, where the interest rate can change, increasing or decreasing your monthly repayment, a fixed rate mortgage stays at a constant rate for a given period, typically two, three or five years, no matter what happens to general interest rates. Therefore, with this type of mortgage, you will know how much your monthly payments will be.
This could be particularly suitable for a first time buyer, who would appreciate the ability to budget expenditure. You can choose (from the current range of options) how long you would like the mortgage rate to remain fixed for, with the confidence that whatever happens to interest rates in the meantime, the rate you pay stays the same.
A redemption/partial repayment charge will be made if, during the period of the fixed rate, you either redeem the mortgage in full or make a part repayment.
2. Tracker Mortgage
With our range of tracker mortgages, the rate you pay will be set at a fixed percentage above the Bank of England base rate depending on the amount borrowed.
Whenever the base rate changes, the interest rate you pay will follow within one month. The amount of your monthly payment is reviewed regularly.
Tracker Products - If your product tracks a rate, such as Bank of England base rate, and that rate falls below zero, we will not change your margin. However if the combination of the tracked rate and the margin means that your interest rate does fall below zero, your interest rate will ‘instead’ be zero, until the combined rate goes above 0% again.
How much will I be paying?
Unless you have a fixed rate mortgage, the amount you pay will depend on the interest rate charged. Your monthly payments may vary from time to time as mortgage interest rates go up or down.
You could repay some of the capital borrowed earlier than originally planned – either by increasing your monthly repayments, perhaps when you receive a pay rise or promotion, or in one or more lump sums, perhaps after receiving an inheritance or following the maturity of an investment.
This will enable you to reduce your monthly interest payments. However, if you make an early repayment on some types of mortgage there will be an early repayment charge. Your Mortgage Arranger can provide more details.
Still not sure about the most suitable mortgage for you?
We are able to combine the various types of mortgage we offer. You can discuss the alternative options with your Mortgage Arranger (although we do not offer advice).
Decide what type of property you are looking for – a house or a flat, freehold, leasehold or share transfer.
Normally a house is sold freehold, which means that you own it entirely, for as long as you like.
Flats may be purchased in a number of ways, including Freehold, Flying Freehold, Leasehold and Share Transfer. Your legal advisor can explain the differences and how they impact ownership.
Once the lease has come to an end the property reverts back to the freeholder. Therefore it is important to have a lease of sufficient length if you wish to sell the flat later. This will also affect our lending decision.
During the period of the lease the freeholder will maintain the structure of the overall building, which includes the flat and the surrounding land. You will be charged a 'ground rent' or 'service charge' each year for your share of these costs.
When you are considering buying a home it is a good idea to visit the property at different times of the day to find out, for example, if the street is noisy at night or whether it is particularly busy at lunchtimes.
Don't visit only when the sun is shining. If you visit during a storm, you may be able to spot a leaky roof or poorly fitted windows.
Making notes on the particulars, if you are buying through an estate agent, can be very useful and help you to compare properties. It is also important to check for things like damp. Issues like this can cause delays or extra costs later in the process.
Where to look
Once you've decided which type of property you would like to buy, you can begin the search.
There are three main sources of information available for purchases of existing homes:
1. Estate agents
As a home buyer you do not have to pay estate agents' fees, but you should remember that agents act for the seller. Once you have explained to them what you are looking for, they will be able to provide you with details of any suitable properties and make appointments for you to see them. You will normally negotiate the price with the estate agent rather than the seller. It is a good idea to contact several estate agents and ask to be put on their mailing lists.
Occasionally, people wish to sell their homes themselves rather than employ an estate agent. You will normally find they advertise in their local newspapers and if you reply you will find yourself dealing directly with the seller. Most advertisements, however, tend to be placed by the owner's estate agents.
3. Social media
Social media such as Facebook and Twitter can be an effective tool for finding and viewing properties as they first come on the market.
If you are interested in buying a new home, you may be able to approach the builder directly so that you can benefit from any discounts or free fittings, for example kitchen appliances or carpets, that may be on offer. Builders normally advertise their properties through local newspapers and sometimes through local estate agents.
One advantage of buying a new home is that you avoid 'chain' problems, which often occur when the seller decides not to sell because his or her purchase has fallen through. Buying a new home also gives you a 'clean slate' to work with.
Once you've found your ideal home, you can make a formal offer. The amount you offer should be based on how much you can afford, how much the property means to you and how you would feel if someone 'outbid' you with a higher price as well as the market value of the property.
Before you decide what to offer, it is a good idea to check how the asking price compares with neighbouring properties, how long the property has been on the market and whether the seller has found somewhere else to buy.
Many sellers fix their asking price above what they would be willing to accept because they expect potential buyers to offer less than the 'advertised' price. Don't be afraid to negotiate. You can always increase your offer and carry out any price negotiations through the estate agent or builder, but if you are buying privately, you may agree the price directly with the seller or the seller's advocate/solicitor.
Once you have agreed a price, you should tell your advocate/ solicitor. Remember that making and accepting verbal offers may not be legally binding and therefore neither you nor the seller would be committed to the purchase at this stage.
Always take legal advice before signing any documents or paying any deposit.
Once your offer has been accepted, you will need to finalise the arrangements for the mortgage with your Mortgage Arranger. Mortgage application forms are available from all our branches, but we would advise you to complete it with the help of your Mortgage Arranger.
To ensure your application progresses as smoothly as possible, it is important to bring all required paperwork to your appointment with your arranger.
When meeting your Mortgage Arranger to complete the application, or if you are handing in the completed application, please ensure the following original documents are also provided, if applicable:
- proof of identity and residence, such as the original or a certified copy of your full passport, or your full driving licence, or any other official document containing your photograph and signature
- three months’ bank statements for all accounts that you have
- your last three months’ payslips (if you are salaried) or last 12 payslips (if you receive weekly pay)
- your National Insurance card or number
- details of your existing mortgage if it is not with Lloyds Bank International, the amount borrowed and the date your mortgage started and the outstanding balance
- three months' credit and store card statements (if applicable)
- details of any other loans, your original loan agreement and the current balance of your loan(s)
- if you are self-employed – your last two years’ certified accounts and your personal income tax assessments for the last two years
- details of the property you want to buy such as particulars from the estate agent/builder, or the address, purchase price and estate agent’s details
- the name and address of your advocate/solicitor
- details of any existing life/endowment policies and investment products that you may have
- confirmation that you have the deposit that you intend to put down on the property
- confirmation of last three years of bonuses
- rental income confirmation
- residency Card (Jersey only)
- if you have received funds in the form of a gift, you will need a letter from the donor stating that the money is a gift and is not expected to be repaid
- confirmation of your repayment vehicle if you are choosing an interest only mortgage.
The original document can be given to your Mortgage Arranger who will be happy to photocopy and certify it for you.
When you apply for your mortgage it is important to check the value of the property that you intend to buy.
As a lender we also need to make sure that it is worth more than the amount you wish to borrow. Therefore, before we can complete your mortgage we will need to have a 'lender's valuation' carried out by a valuer acting for the bank, selected from an approved panel of valuers. You can find a more detailed explanation of this and other types of valuation below.
Please bear in mind that once the survey is commissioned you must pay for it whether or not you proceed with the purchase and whether or not the property is suitable as security.
This is the cheapest option and the minimum we require for a Lloyds Bank International mortgage.
This is simply a valuation that helps us to decide how much we can lend. It will not necessarily highlight any structural problems and you should not rely on the valuation to decide whether to buy the property or to determine how much you should pay for it. We strongly recommend that you have a more comprehensive survey done for your own peace of mind.
This is a 'mid-priced' option and is appropriate for most people because it provides enough information to highlight potential problems and could influence your decision to purchase the property or help you negotiate a lower price. It is less detailed than the full structural survey, but includes an inspection on the general state of repair and condition of the property and, provided it has been carried out by a Lloyds Bank International approved surveyor, will also be acceptable as a valuation for mortgage purposes.
Full structural survey
This is the most expensive of the three options but is well worth considering. If you are buying an old property or one that you think will need extensive repairs or alterations, this type of survey will bring to your attention any structural work that needs to be done and may prove invaluable in helping you to avoid costly mistakes or to negotiate a lower price if any problems are revealed. A full structural survey can also cover the requirements for a mortgage valuation providing you use a Lloyds Bank International approved surveyor and let us know about the survey in advance.
Your Mortgage Arranger should be able to give you an indication of the costs for each type of survey.
When purchasing a flat in a block building, the valuer may have issues accessing the whole property. This should be considered and checked when deciding on which type of valuation to get.
The mortgage offer
Once your application has been accepted, we will normally make a mortgage offer based on the purchase price. However, if the valuation is lower than the purchase price, we will only base our mortgage offer on the valuation figure.
You will receive your offer in the form of a letter from us which sets out the details of the mortgage such as the interest rate, payment method, mortgage term and repayment amounts.
A full structural survey is worth considering if you're buying an older property, or one that you intend to make repairs or alterations to.
Before the purchase of your new home goes ahead, a legal advisor will need to complete all the legal work for you – a process known as conveyancing.
A legal advisor may be an advocate/solicitor/conveyancer.
Before you make a decision, do ask for an estimate as to what the legal fees will be.
Your legal advisor should carry out a number of searches and enquiries on your behalf, such as:
- checking the title documents to make sure the property is owned by the seller and can legally be sold
- making sure there are no proposed developments that could affect the property, such as a road widening scheme (only in Jersey and IOM)
- ensuring that there are no breaches of building regulations or planning legislation (only in Jersey and IOM)
- checking for any restrictions on the way the property is used, such as rules covering TV aerials, satellite dishes or commercial vehicles (only in Jersey and IOM)
- ensuring finance and surveys are in place before advising you to place a deposit.
Once your offer has been accepted the following should happen:
1. Before you sign conditions of sale your advocate will:
- advise you on the draft contract, including any agreements for fixtures and fittings, such as carpets, light fittings and garden plants
- ensure all searches and enquiries have been completed
These steps can take anything from a few days to several weeks to complete depending on whether you are buying a new or existing property and how quickly the seller wants to move.
2. You sign the conditions of sale and your advocate will:
- prepare the conveyance prior to the sale being completed in court
- ask you to pay a deposit to the seller's advocate or estate agent, normally 10% of the purchase price. Check with your advocate because you may be able to negotiate a different deposit
3. You attend court to pass contracts
This normally takes place two to four weeks after the signing of conditions of sale.
At this stage your advocate will:
- transfer the balance of the funds necessary to purchase the property to the seller's advocate on your behalf
- ensure that any holding deposit paid to an estate agent has been passed on to the seller or returned to you
- attend court to register the property in your name
- pay any fees incurred
You should now be able to collect your keys and move in!
The legal process for your purchase is similar to Guernsey but is governed by the Alderney Land Registry.
The conditions of sale are very close in form to those used in Guernsey but there is no obligation for you to attend court as completion is by registration of a land transfer document which can be submitted by post. There is a requirement by the Alderney Land Registry for verification of your identity which must be satisfied before the registration can take place.
Once your offer has been accepted the following should happen:
1. Before you sign conditions of sale your estate agent will:
- advise you on the draft contract, including any agreements for fixtures and fittings, such as carpets, light fittings and garden plants. This can take anything from a few days to several weeks to complete depending on whether you are buying a new or existing property and how quickly the seller wants to move.
You will visit your Lloyds Bank International branch to agree the mortgage facility that you need. This agreement can be subject to certain conditions which must be investigated and agreed before you sign the conditions of sale (for example, a satisfactory valuation report is obtained), otherwise you could be at risk of losing your deposit.
2. When you sign conditions of sale:
- you'll visit the Land Registry to have your signature witnessed on the property transfer documentation. This will happen at any time between signing conditions of sale and the agreed completion date
- your advocate or estate agent will ask you to pay a deposit to them when you sign the conditions of sale, normally 10% of the purchase price. Check with your estate agent before the date of exchange because you may be able to negotiate a different deposit
- you will visit your Lloyds Bank International branch prior to the completion date to have your signature witnessed on the purchase bond
3. On the completion date, your advocate or estate agent will:
- go to the Land Registry with a Lloyds Bank International representative and arrange the property transfer
- once the property is registered in the new name, the bond is registered as the first transaction
- transfer the balance of the funds necessary to purchase the property on your behalf
- ensure that any holding deposit paid to an estate agent has been passed on to the seller or returned to you should the property transfer not complete for any reason
- register the property in your name
- pay any fees incurred on your behalf
You should now be able to collect your keys and move in!
Once your offer has been accepted the following should happen:
1. Your legal advisor will:
- check your Residency Card is in date and has the correct status shown on it
- advise whether an initial agreement to bind the vendor to sell to you on the completion date is required. Most transactions do not need a preliminary agreement to lock the parties to buy and sell on the agreed date. It may be appropriate, if for example, there is a long interval between the agreement to buy and finally passing contract of purchase
- review the draft contract of sale from the vendor's lawyer and will check, amongst other things, the description of boundaries; covenants which affect the land; and the record of previous owners of the property
- write to the utility companies, parish and island authorities to check things such as the connection of the drains to the property
- visit the property to check the accuracy of the contract of sale and other things such as whether the property enjoys the necessary rights of way and checks the boundaries of the property
- advise you on the results of the review of the contract; the results of the site visit; and the responses from the authorities
- advise you on the mortgage financing of the transaction and the risks to be insured
- remind you to transfer your portion of the purchase price to the firm's client account
These steps usually take 2–6 weeks to complete, depending on how quickly both parties wish to proceed, and on whether any problems arise.
2. The Royal Court records the transfer
- Each Friday afternoon the Royal Court sits to hear and record the transfers of title relating to freehold, leasehold and flying freehold properties. The vendor and purchaser (or their attorneys) must be present to acknowledge the contract.
- At the same time, the bank's lawyers will ensure that the mortgage is registered by the court.
- You would now normally receive the keys to the property.
- Your legal advisor will advise you to ensure that buildings insurance, for which you are now responsible, is on cover from the day the contract is passed before Royal Court.
3. The vendor/seller is paid
Settlement is made via your legal advisor to the vendor on the Tuesday following the Royal Court registration.
Properties specific to Jersey
The principle of freehold is that the land on which the property sits is owned by you, and by extension everything below and above that plot of land also.
Until 1991, only houses could be owned in this way, and flats had to be purchased differently. Confirmation of ownership is a contract of purchase, passed before the Royal Court. There is no registered land in Jersey although there is register of contracts passed before the Royal Court.
Share transfer property
Before 1991 ownership of a flat was problematic. A limited company was formed to own the land and everything built upon it to get around this. The articles of that company link the exclusive occupation of each flat to a block of shares. Ownership of each block of shares then gives the owner the exclusive rights of occupation, use and enjoyment of a specific flat in the block.
The company's memorandum and articles of association states the duties and obligations of both the company and the shareholders, and a copy of them must be obtained by the purchaser before entering into a share vending agreement to buy a block of shares.
The Population Office rarely has control over share purchases, so anyone can buy on a share transfer basis, whether they have Jersey housing qualifications or not. Occupation of the flat is controlled and only usually those who hold the correct status may live in it.
Flying freehold property
The 1991 'flying freehold' law introduced the possibility of buying a flat in a way similar to a normal freehold purchase. The owner of a flying freehold property will automatically become a member of an association of co-owners. The association's rules will state the rights and obligations of each member, including responsibilities in regard to common areas such as stairways and gardens.
Once your offer has been accepted the following should happen:
1. Your advocate:
- requests from the seller's advocate an 'Agreement for Sale' (the contract that you enter into to buy the property), the 'Abstract of Title' (copies of previous conveyances and other documents relating to the title, or 'Office Copy of Filed Plan' where the title to the property is registered at the Land Registry) and replies to enquiries about the property such as information in respect of boundary disputes or details of any planning approval granted. A draft 'deed of conveyance' (the document which the seller signs to transfer title to you or, 'Transfer' where the title to the property is registered at the Land Registry) is also requested
- prepares written search enquiries for local authorities, planning office and utility companies
- undertakes searches at the Deeds Registry or Land registry (as appropriate) where all original conveyances and other title documents are retained. Copies are produced as required and your advocate will confirm that all previous owners had a good title and there are no outstanding mortgages or other issues on the property (except, perhaps, for the seller's mortgage, the details of which will be provided by his advocate)
- confirms with your lender that a mortgage facility has been agreed, receives a note of any conditions, which may have to be observed before the advance is made, and obtains details of what the lender requires from the advocate.
2. When satisfactory replies have been received your advocate will:
- ask you for a deposit (usually 10% of the purchase price) and request that you sign the agreement for sale, having carefully explained the contents of this document and what it means to you. He will also go through the implications of the mortgage in favour of your lender. The deposit is paid to the seller's advocate and at the same time the contracts are exchanged (the seller also having signed a copy) by the advocates. The purchaser and vendor are now fully committed
- ensure that on the date of exchange buildings insurance, for which you are now responsible, is on cover and any life insurance required is on risk
- approve wording of conveyance or transfer and raise any 'requisitions on title', i.e. queries regarding defects which may need correction.
3. You set a completion date
- Your advocate will pay the amount required by the seller's advocate and receive the conveyance and keys. You will sign the conveyance or transfer which is then registered at the Deeds Registry or Land registry.
- Your advocate will pay the amount required by the seller's advocate and receive the conveyance and keys. You will sign the conveyance which is then registered at the Deeds Registry.
- If the title to the property is not already registered at the Land Registry, your advocate will then apply for the first registration of the title to the property at the Land Registry, and an Office Copy and Filed Plan of the registered title to the property and any other relevant documentation will be sent to you by your advocate.
- The bank will receive its security documents.
There is no stamp duty in the Isle of Man but recordal fees are payable to the Manx Government.
Advocates are permitted to act for both lender and borrower in respect of mortgage transactions provided there is no conflict of interest and both parties have given informed written consent.
Home insurance is compulsory when taking a mortgage and must be in place when you legally transfer. This can be several days or weeks before you actually move in.
Ensuring your property has adequate insurance cover is not the only thing that you should consider. You should also ensure that you have sufficient cover in the event of your death, illness or disability. We do not offer home or life insurance, for further information please speak to an independent advisor.
If you have a family or plan to start one, you need to ensure that, should you die, they will not be left with the mortgage debt. Insurance is available to cover almost any eventuality, and making certain that you are well covered is nearly as important as making sure you have the right mortgage.
This will cover the bricks and mortar of the property and it is vital that you have your policy ready to take effect as soon as you become legally responsible for the property.
It is particularly important that you consider this when taking out a mortgage. You can arrange life insurance that will pay off your outstanding mortgage in the event of your death so that your family will not be left with this financial burden. Some policies also offer the option of serious illness and disability cover, which will pay off your mortgage if you are diagnosed as having an illness or disability covered by the policy.
This will cover the contents of your home against a wide range of threats including fire, flood, malicious damage and theft.
You will normally want to have cover from the time when you move your belongings into the property. Contents insurance is something we strongly recommend you get, although it is not a legal requirement.
Bear in mind that if you're buying a flat, it is likely that the landlord/co-owners' association or share transfer company will be responsible for insuring the building rather than you personally. Your legal advisor can advise you accordingly.
Set a date
First you need to decide on the date that you can move into your new home and agree with all parties. This is particularly important if you have a place to sell and need to co-ordinate a date with the people moving into your existing home. Matching your dates will prevent you from having to pay for two properties. Should you be currently renting, you will need to give your landlord a leaving date.
Book the removers
If you are hiring a removal firm to move your belongings, obtain quotations from a number of firms and make a provisional booking. Some removers will also pack for you, which may be advisable. See the section on packing below. If you are looking to hire a van and carry out the move yourself, you should also book it early. Make sure your belongings are insured during transit.
Before you move you will need to contact all services – electricity, gas, telephone and water – to arrange final bills and reconnection at your new home.
Send out change of address notifications
Start letting everyone know that you are moving.
Order carpets and furniture
You may wish to measure up for new carpets and curtains; however, it is wise not to commit yourself to ordering until after the completion date (or after conditions of sale have been signed in Guernsey and Alderney) in case the purchase falls through.
Approximately two weeks before you move, start packing everything except necessities and last-minute items. Some removers will provide you with boxes for this, but if your removal firm will not take financial responsibility for breakages unless it has packed everything itself, leave the packing to the removers. Remember to have all the essentials to hand for moving day itself.
Moving can be hard work, particularly if you decide to do all the moving yourself. Planning ahead will help everything to go smoothly.
Lending is at the Bank’s discretion and you must be 18 or over and resident in Jersey, Guernsey, Alderney or the Isle of Man to apply. Security will be required.