11 Tips for First-Time Home Buyers

Buying a property can be an overwhelming process if you’re a first-time home buyer, but there are lots of ways to make the process run smoothly. Read our 11 simple tips and tricks to help you secure your ideal first home.

Peter Adams, Brean Horne Last updated on 16 November 2021.

Getting on the property ladder is a huge milestone, and there are many ways to make the process smoother for first-time home buyers.

From getting on top of your credit score to applying for a mortgage, we run through 11 tips every first-time buyer needs to know.

Check your credit score

Keeping on top of your credit score can help boost your chances of being approved for a mortgage.

Typically, a higher credit score increases your chances of being accepted for a mortgage, while a lower credit score lessens your chances of being approved.

A high credit score shows that you have a good track record of repaying debt on time. A low credit score, on the other hand, indicates to lenders that you may not be able to keep up with your repayments.

Taking steps to improve your credit score, especially if you have bad credit or no credit history, can boost your chances of being approved for a mortgage.

There are several ways to check your credit score and improve it before applying for a mortgage.

» MORE: What is a good credit score for a mortgage?

Work out what you can afford

It’s important to crunch the numbers and work out what you can afford before you start looking for a home.

You’ll need to add up all the money you have now, including any savings and income, and think about the costs you’ll need to cover, such as a house deposit, survey and legal fees and the move itself.

As a general rule, you should also bear in mind that lenders will typically only lend four to 4.5 times an applicant’s salary (or combined salary when there is more than one applicant) – looking at houses outside this range is unlikely to work out for you.

If you’re thinking about buying a leasehold property, you’ll also have to factor in costs such as ground rent and service charges.

As well as day-to-day expenses, it’s worth thinking about other costs you would like to budget for once you have moved in, such as buying a new car or going on holiday. Lenders will also take into account your spending habits when deciding how much they will be willing to lend you.

Having a clear picture of your finances will help you calculate how large a mortgage you can afford and the type of home you can start looking for. It can also help you make a savings timeline and work towards your goal amount.

Save, save, save

Setting savings aside for buying your first home is crucial. One of the biggest costs first-time home buyers need to save for is a house deposit.

The average house deposit is around £42,500, according to the latest English Housing Survey, but your deposit will vary depending on the size of mortgage you apply for.

It’s important to remember that a house deposit is only part of the story for home buyers. You’ll need to make sure you have enough money to cover the following costs too:

First-time home buyers can boost their purchasing power by using government schemes including:

  • Lifetime ISA, which offers savers aged between 18 and 40, an annual 25% bonus on savings up to £4,000 until they reach 50. Lifetime ISA savings can be used for a house deposit or for retirement.
  • Help to Buy ISA, which are now closed to new applicants, offer existing savers a 25% bonus of up to £3,000 on their savings, which is paid out just before completion and will contribute to the deposit for your home.
  • Help to Buy: Equity Loan scheme, which gives first-time buyers access to an equity loan to help them buy a new-build property with a minimum 5% deposit. The loan is interest free for five years in England, but works differently in Scotland and Wales.
  • Shared Ownership means you can buy part of a property and pay rent on the remainder. First-time buyers with household income below £80,000 (or £90,000 in London) are eligible, along with households who used to own a home but are now struggling.
  • Right to Buy allows council homes tenants to buy their home at a discount.

» MORE: Costs of buying a home: what you need to know

Consider using a mortgage adviser

Buying a home can be an overwhelming process, especially if you are a first-time home buyer. A mortgage adviser, or mortgage broker, is a person or company that helps you find a suitable mortgage. They will assess your financial circumstances and look for mortgage products, which match your criteria.

Mortgage advisers tend to have access to deals from a wide range of lenders, which gives them a better chance of finding the right one for you. They also offer expert guidance, which can be particularly helpful for first-time home buyers navigating the world of property.

The average cost of a mortgage adviser is around £500, although fees can vary depending on how much you’d like to borrow. For example, some brokers instead take commission from the lender they refer you to.

» MORE: Do I need a mortgage adviser?

Check eligibility and affordability before applying

Eligibility checkers are a great starting point for comparing first-time buyer mortgage deals, especially if you decide to apply without using a mortgage adviser. They use a soft credit check to determine which lenders are most likely to accept your mortgage application.

There are lots of free eligibility checkers online. Some mortgage lenders provide their own to give you an idea of how likely you are to be approved for their mortgage deal.

Once you find a deal, it’s important to check the lending criteria too. This is because mortgage providers must also consider whether you can afford mortgage repayments when you apply and will look at your income, spending habits, as well as whether you will be able to keep up with repayments in the future.

Checking whether you are eligible and that you meet the affordability criteria of a mortgage can help improve your chances of being accepted, saving time in the long run.

If your mortgage application is rejected, you may need to wait at least three months before applying for another in order to be looked upon favourably. This is because too many borrowing applications (including mortgages) in a short space of time could signal to lenders that you’re in financial difficulty and increases the risk that you will be rejected again. This can affect your credit score and make it more difficult to apply for a mortgage in the future.

Research where you want to live

Take the time to research areas where you would like to live before you arrange property viewings. Taking a look at house prices in the local area can give you an idea of what you can expect to pay. This can help you find locations with properties in your budget.

Once you start viewing homes, keep an eye on how much similar properties in the area cost. This can help you judge whether a property is overpriced and if there is room for negotiation when it comes to making an offer.

If you are thinking about moving to a new town or city, visit the area in person at different times of the day to get a better sense of the community. It is also important to research house prices in the area to give you an idea of what properties may be worth. This can help you work out an appropriate offer

» MORE: What is a house valuation?

Be clear on the property you want

Before you start viewing properties, make a list of features your property needs to have and any deal-breakers. For example, your ideal property might need to have a garden and be close to public transport links.

It’s also worth thinking about the future – for example, if you plan to start a family it’s worth considering what schools and childcare facilities are in the local area.

Having a clear idea of the home you want will help you compare what each property you view has to offer. It also gives estate agents a good idea of what you’re looking for. And they may be able to suggest properties that you might not have considered before that still match your criteria – properties with planning permission for an extension or loft renovation, for example.

» MORE: How to buy a house

Ask lots of questions during viewings

Buying a home is a big investment, so it’s important to make sure that the property and location are a good fit. So have lots of questions ready for the homeowner or estate agent when you view homes.

Asking the following questions can help build a better picture of the property and whether it’s right for you:

  • Why is the owner selling?
  • How long has the property been on the market?
  • What is included in the sale?
  • Have any rooms been recently decorated?
  • Are there local plans that could affect homeowners?

Try to be as thorough as you can during viewings. Ask if you can test out the taps to check the water pressure or peek under rugs and paintings to get a better impression of the state of the flooring and walls.

Taking your own photos and videos for reference can help you remember exactly what you liked or disliked about certain properties – but first ask permission from the homeowner or agent.

Get a house survey

It’s important to get a house survey before buying a home. Typically buyers have to arrange a house survey once an offer has been accepted by the seller. A house survey is a detailed inspection of a property, which looks at its condition and value. It aims to highlight any major repairs or maintenance work that are needed –, fixing the roof, for example.

There are three main types of house surveys; a home condition report, a home buyer report and a building survey.

» MORE: What home buyers need to know about getting a house survey

Organise your documents

There is a lot of paperwork involved in buying a home, so it’s important to have all of your documents organised and ready to go.

The documents you’ll need as part of your mortgage may vary depending on your lender and your employment status. However, most providers require the following documents when you apply for a mortgage:

  • Proof of ID: You’ll need to provide your current passport or a full UK driving licence photocard so that the lender can verify your identity.
  • Bank statements: You may need to provide three to six months’ worth of bank statements so that lenders can review what payments leave your account.
  • Proof of income: Lenders will ask for payslips to show evidence of your income if you are employed, or any benefits you receive. Self-employed borrowers may need to provide two to three years worth of tax returns.
  • Proof of deposit: You’ll need to show evidence of the deposit, such as savings account statements. If you use a gifted deposit, your lender may ask you to complete a form or request a statement from the person giving you the lump sum.
  • Household bills: Lenders often ask for utility bills or council tax bills as proof of address and to carry out money-laundering checks.

Missing deadlines to submit your documents can cause delays in your application process, while sending in the wrong documents could result in your mortgage application being rejected.

» MORE: Mortgage tips for first-time home buyers

Protect your mortgage repayments

It may be worth taking out insurance to cover your mortgage repayments in case of any unexpected problems in the future.

There are several types of insurance policy designed to provide financial support to you and your family if your circumstances change, including:

  • Life insurance: This pays out a lump sum if you die before you have paid off your mortgage, which can be used to help pay any outstanding balance.
  • Critical illness cover: It pays out a tax-free lump sum if you are diagnosed with a serious illness. It’s designed to offer financial support to you and your loved ones while you undergo treatment. It is possible to buy a policy that offers life insurance and critical illness cover.
  • Unemployment cover: A short-term income protection policy for up to a year, this type of policy typically pays out up to 70% of your gross annual income tax-free.

There is a large range of options to choose from when it comes to insurance, and certain products will be more suitable for you depending on your individual circumstances. If you have complex needs or are unsure, you should seek the assistance of a financial advisor, who will be able to guide you on the type and amount of cover you require.

Mortgage lenders require you to take out buildings insurance when you apply for a home loan. A buildings insurance policy covers damage to the structure of your home, such as the walls, ceilings and roof.

About the authors:

Peter reports on a number of areas in the personal finance sector, with a particular interest in supporting businesses and individuals in the UK services industry. Read more

Brean is a personal finance writer at NerdWallet. She covers a range of financial topics and has written for consumer titles including Which?, Moneywise and The Motley Fool. Read more

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