Buying your first home is an exciting milestone, but it can also feel overwhelming. From saving for a deposit and securing a mortgage to organising your move, there are several important steps to consider before collecting the keys to your new property.
This first-time buyer guide explains the basics of purchasing your first home and offers practical tips to help make the process as smooth as possible.
Saving for a Deposit
One of the biggest challenges for most first-time buyers is saving for a deposit. The amount you’ll need depends on the property’s value and the mortgage lender’s requirements.
Typically, first-time buyers need a deposit of between 5% and 20% of the purchase price. Generally, the larger your deposit, the better mortgage rates you may be offered.
Before you begin house hunting, create a savings plan and explore any government-backed schemes that may be available to help first-time buyers get onto the property ladder.
Understanding Mortgage Affordability
Before applying for a mortgage, it’s important to understand how much you can comfortably afford each month.
Mortgage lenders assess your income, spending habits, existing debts and financial commitments before deciding how much they are willing to lend. They will also consider whether you could continue making repayments if interest rates increase.
When calculating your budget, remember to include:
- Utility bills
- Council tax
- Home insurance
- Broadband and subscriptions
- Property maintenance costs
- Emergency repairs
- Moving expenses
Being realistic about your monthly budget can help prevent financial stress after moving into your new home.
Choosing the Right Mortgage
There are several types of mortgage available, and choosing the right one depends on your circumstances and attitude to risk.
Fixed-Rate Mortgages
A fixed-rate mortgage locks your interest rate for a set period, usually between two and five years. This provides predictable monthly payments and can make budgeting easier.
Variable and Tracker Mortgages
Variable-rate and tracker mortgages can rise or fall depending on market conditions and interest rates. While they may offer savings when rates are low, your monthly repayments could increase if rates rise.
If you’re unsure which mortgage is right for you, consider speaking with an independent mortgage adviser who can explain your options.
Don’t Forget Additional Buying Costs
Many first-time buyers focus solely on their deposit and mortgage repayments, but there are other costs involved in purchasing a property.
These may include:
- Solicitor or conveyancing fees
- Survey costs
- Mortgage arrangement fees
- Removal costs
- New furniture and appliances
- Decorating and repairs
Creating a moving budget can help ensure there are no surprises when the big day arrives.
Protecting Your New Home
Once you’ve purchased your property, protecting it should be a priority.
Buildings Insurance
Buildings insurance covers the structure of your home against damage caused by events such as fire, flooding or storms.
Contents Insurance
Content insurance protects your possessions, including furniture, electronics and personal belongings.
Life Insurance
If you have a partner, children or other dependents, life insurance can provide financial protection for your loved ones should the unexpected happen.
Review Your Mortgage Regularly
Many first-time buyers assume they will keep the same mortgage for the entire term, but this is rarely the case.
Most mortgage deals last between two and five years. When your initial deal ends, you may be moved onto your lender’s standard variable rate, which is often more expensive.
Reviewing your mortgage before your current deal expires can help you secure a more competitive rate and potentially save a significant amount of money over the life of the loan.
Planning Your Move
Once contracts have been exchanged and a completion date has been agreed, it’s time to prepare for moving day.
Booking a professional removals company in advance can help reduce stress and ensure your belongings arrive safely at your new home. Creating a checklist and packing early will also make the moving process much easier.
Buying your first home is a major achievement. With careful planning, sensible budgeting and the right professional support, you can make the journey from first-time buyer to homeowner with confidence.
Frequently Asked Questions
How much deposit do I need as a first-time buyer?
Most lenders require a deposit of between 5% and 20% of the property’s value. A larger deposit can often help you access better mortgage rates.
Can I get a mortgage with a 5% deposit?
Yes. Some lenders offer mortgages with a 5% deposit, although eligibility criteria and interest rates may vary.
How long does buying a house take?
The process typically takes between 8 and 16 weeks from having an offer accepted to completion, although this can vary depending on the property chain and legal process.
What credit score do I need for a mortgage?
There is no universal minimum score, but having a strong credit history will generally improve your chances of being approved and accessing better mortgage deals.
Should I use a mortgage broker?
A mortgage broker can help compare deals from multiple lenders and may be particularly useful for first-time buyers who are unfamiliar with the mortgage market.
When should I book a removals company?
It’s usually best to obtain quotes early in the process and confirm your booking once contracts have been exchanged and a completion date has been agreed.