Learn how to buy your first home and get your first mortgage. Explore our guides and use our calculators to find out how much you can borrow and how much deposit you need. Calculate if Help to Buy and first time buyer government schemes can help you get on the property ladder.
Buying a home takes more than just raising a deposit and stamp duty. Here's a complete list of all the costs of buying a house and moving into it.
The base rate is the Bank of England's official borrowing rate. It is currently 0.1%. The BoE base rate strongly influences UK interest rate, which can increase (or decrease) mortgage rates and your monthly repayments.
Find out how to improve your credit score. Knowing how to increase your credit score will help you qualify for the best mortgages, loans, and credit cards.
When you move home, a mortgage conveyancer will make sure the property isn't at risk of flooding, or that a high-rise block of flats is planned for next door. But there are fees involved, and the conveyancy process can take a long time.
The LTV of your mortgage will affect what interest rate your mortgage lender offers you. A lower LTV can save you thousands of pounds over a couple of years of mortgage repayments.
APRC, or annual percentage rate of charge, can help you compare mortgages after the introductory interest rate runs out - but in reality, if you remortgage regularly, APRC might not be that helpful.
A leasehold property is one you can buy and own for a fixed amount of time. When the lease ends, the property goes back into the hands of the freeholder or landlord.
Finding the right place to live is mostly down to what you can afford, and compromises you're willing to make. Here's how to search for homes and property that are right for you.
Another expense but one that is absolutely mandatory when purchasing a property is a home survey. There are a number of different types that we discuss here in detail.
It has never been more sensible to use a whole-of-market mortgage broker to make sure you're getting the best mortgage for your financial situation.
The ultimate house viewing checklist and most important questions to ask when viewing a house, so that you that you know what to look out for when buying a home.
Mortgage life insurance will cover the total repayment cost of your home if you die or suffer from a critical illness. If you have a joint mortgage or you have dependants living in your home, then mortgage life insurance will mean that they don't have to worry about mortgage repayments.
The key to buying your first home is plenty of research and preparation.
The individual steps to buying your first home are quite easy if you know about them before you start. It is the hidden steps or unexpected surprises that can turn homebuying into a stressful mess that drags on for months or years.
These are the 7 most important steps when buying your first home:
Work out what you can really afford
Research where you really want to live
Get your finances in order
Gather all the documents you need
Start the process of getting a mortgage
How long it takes to buy a house
Get the best price on your new home
To learn more, explore our complete guide on how to buy a house.
The first step in buying your first home is to be brutally realistic about what you can afford.
The maximum mortgage you can get is typically around 4.5 times your income, or up to 4 times your joint income if you're buying a house with someone else. But lenders now also scrutinise your income and outgoings to see how much you can really afford each month.
Use a mortgage calculator to get an estimate of what you may be able to borrow.
Except in rare circumstances, you will need to save up a deposit of at least 5% of the house price. So, on a property costing £250,000 you will need at £12,500. Indeed, that is the bare minimum required, as the average deposit for first-time buyers in the UK is typically around 15% of the house price.
The typical time for a first-time buyer to save up a deposit is between 8 and 10 years, depending on how expensive house prices are in your area.
Do the maths. Be honest about how much you can save every month, and whether your salary will change over the next few years.
Unless you have family that can support you financially or you've received a large inheritance, buying a house will likely take years, not months.
That said, it is possible to reduce this time frame – it all depends how determined you are to save.
Mortgage repayments are usually cheaper than rent payments for a similar property. This is one of the main reasons for buying a house instead of renting.
But there are lots of extra fees and taxes incurred when buying and owning a house. Stamp duty, mortgage fees and survey fees are all unavoidable costs that will also need to come out of your savings, reducing the size of your deposit.
Think about what you'll need to buy at IKEA after you move in too!
The Help to Buy schemes, also known as Equity Loan, Shared Ownership and Lifetime ISA, are government schemes to help first time home buyers get onto the property ladder.
Equity Loan helps you buy a new-build property with a smaller deposit.
Shared Ownership lets you buy a percentage share of a property, rather than the whole thing. This can help you get on the property ladder with a smaller deposit and a lower income.
If you fancy boosting your monthly savings to buy your first home, the government could be your unexpected ally.
If you’re aged between 18-39 you can stash up to £4,000 per year into a tax-free Lifetime ISA – and whatever you save is topped up by a healthy 25% by the government. Free money!
In a similar vein, if you opened a (now closed) Help to Buy ISA you can continue to save up to £12,000 in it, to which the government will pay a 25% bonus (up to £3,000) when you come to buy a property.
Just before you really start thinking about where you want to live, it is worth obtaining a mortgage agreement in principle (AIP). This is a document from a mortgage lender that says, in theory, how much they would be willing to lend you to buy a property.
You can get an AIP (sometimes known as a decision in principle, DIP) online in a few minutes. You will need to provide accurate data on your income, expenses and debts.
Many estate agents won't take you seriously without an AIP, and having one, plus your deposit, gives you a good indication of how much you can afford to spend on a property.
There are just two main factors when deciding where you should live:
After you've worked out how much you can spend on your first home, use a website like Zoopla to find some places that are within your price range.
If you want to live in the south of England, there are relatively few areas that are affordable for first time buyers.
Elsewhere in the UK, where house prices are more reasonable, you will have a lot more choice on where you can live.
Research a few different areas and create a short list of where you'd really like to live.
As a first time buyer, you will likely have to make a couple of big compromises when picking your first home.
Decide what is really important.
Which of these do you need and which are you willing to compromise on?
Short commute distance (close to a railway or tube station)
Near a good school
Close to family and friends
Remember that some compromises can be remedied in the future, while others cannot.
You might be able to build an extension or put in a new kitchen if your financial situation improves. But you can't magically change the school catchment area or shorten your commute distance (unless you change jobs!)
The most difficult thing when buying your first home is sorting out your finances.
If you cannot save up a big enough deposit, you will not be able to get a mortgage.
If you are in overdraft, have loans or debt on credit cards this can negatively affect your credit score. If your credit score is poor, you will not be able to get a competitive interest rate on your mortgage, and may not be accepted for a mortgage at all.
If your salary is not big enough, you will not be able to borrow enough money for the house you want to buy.
Now you really need to focus and get your finances in order. This is the hardest and longest part of buying your first home.
If you need to increase your income to afford the house you want, plan for how you can achieve it and get going!
To get a mortgage and buy your first home, you will need to gather up a large number of documents.
It can take some time to get your docs organised, so it's wise to do it sooner rather than later.
These documents are mostly for the mortgage lender. They need you to prove your identity, your income and your monthly outgoings before they can lend you money.
A mortgage broker or financial adviser may also want to see these documents.
You may need to provide the original versions of these documents. Printouts or scans may need to be certified by a solicitor/bank or utility provider.
Here is a list of documents that you will likely need to buy your first home:
Proof of income (usually bank statements for the last 6 months)
Proof of identity (passport, driving licence)
Proof of benefits (if applicable)
P60 if you're employed
Your last 3 months’ payslips
Utility and council tax bills
If you are self-employed or have more than one job you will also need:
Tax return form SA302
Two or three years’ business accounts from an accountant
At some point, probably while looking at properties, you should start talking to a mortgage broker or financial adviser.
If you use a mortgage broker, look for one that is "whole of market" and doesn't charge you a fee for their services.
You can also go directly to a mortgage lender (such as a high street bank) but be aware that they will only talk to you about their own mortgages.
A mortgage broker can easily compare almost all of the mortgages available to first time buyers, and find the one that is best for your financial situation. What’s more, brokers often have access to special mortgage deals with lenders that are unavailable to borrowers.
Once you've sorted out your finances, the full process of buying a house and moving in will take at least 2 months – and up to a year if there are complications.
Here are the main steps to buying your first home, and how long they take:
1. Find a house and get your offer accepted - Between 2 weeks and 26 weeks
This can be very quick if everything goes to plan, or it can really drag on if you're struggling to find good properties in the area you want to live. Try to be clear on exactly what you require with any estate agents to avoid wasting time viewing unsuitable properties.
2. Get a mortgage offer - Between 2 weeks and 4 weeks
After you've had your offer accepted, you need to finalise your mortgage. This is usually straightforward, but it can take some time to gather all the necessary documents. Learn more about how long it takes to get a mortgage.
3. Conveyance and exchange - Between 4 weeks and 12 weeks
The legal work to transfer ownership of your new home, known as conveyance, can be quite quick if there are no complications. Or it can really drag on if your solicitor goes on holiday or other issues pop up. The legal process is generally faster for a freehold property than a leasehold.
4. Completion and move in! - Between 0 weeks and 4 weeks
It's possible to exchange and complete on the same day, which means you can move in instantly. Or sometimes it can take up to a month. This is something you can discuss with your solicitor.
Before you put in an offer for a house, take the time to research sold house prices in the same area. Zoopla is a good tool for this.
You can also look into how "hot" the housing market is in your area. If houses are taking a long time to sell, sellers are more likely to accept a lower offer.
Brush up on your negotiation skills. Remember that both the seller and the agent (if there is one) usually want to get the highest price possible. Do your own research. Don't just listen to the agent.
It's usually better to start with a lower offer and then increase your offer in increments, unless it's a highly competitive market or very desirable property.
Good luck! And let us know if you use this guide and successfully buy a house. We'd love to hear from you.