Introduction
Buying your first home is one of the biggest financial decisions you'll ever make. This comprehensive guide walks you through every step of the process, from saving your deposit to collecting the keys to your new home.
Step 1: Check Your Finances
Before you start browsing Rightmove, you need to understand your financial position. Lenders will look at your income, outgoings, credit history, and existing debts to determine how much they'll lend you.
Key financial checks to make:
- Check your credit report with all three agencies (Experian, Equifax, TransUnion)
- Calculate your monthly income after tax
- List all your regular outgoings and debts
- Review your bank statements - lenders will ask for 3 months
- Make sure you're on the electoral roll at your current address
Step 2: Save for Your Deposit
Most lenders require a minimum deposit of 5% of the property value, though 10% or more will get you access to better interest rates. For a £250,000 property, that means saving at least £12,500.
A Lifetime ISA lets you save up to £4,000 per year and the government adds a 25% bonus (up to £1,000 per year). You must be between 18-39 to open one, and the money must be used for your first home.
Step 3: Get a Mortgage in Principle
A Mortgage in Principle (also called an Agreement in Principle or Decision in Principle) is a certificate from a lender showing how much they're willing to lend you in theory. This isn't a guarantee, but it shows estate agents and sellers that you're a serious buyer.
Most MIPs are valid for 60-90 days and involve a soft credit check that won't affect your credit score. We can help you get an MIP usually within 24 hours.
Step 4: Find Your Property
Now comes the exciting part - house hunting! Use property websites like Rightmove, Zoopla, and OnTheMarket. Register with local estate agents and let them know your requirements and budget.
Things to consider when viewing properties:
- Location - transport links, schools, amenities
- Condition - will you need to do work immediately?
- Size - enough space for your needs now and in the future
- Outside space - garden, parking
- Potential issues - damp, cracks, roof condition
Step 5: Make an Offer
Once you've found a property you love, it's time to make an offer through the estate agent. Your offer can be lower than the asking price - the agent is legally obliged to pass on all offers to the seller.
Being chain-free (you're not waiting to sell another property) and having an MIP makes you a more attractive buyer. Use this as leverage when negotiating!
Step 6: Apply for Your Mortgage
Once your offer is accepted, it's time to submit your full mortgage application. This is where we come in - as whole-of-market brokers, we'll compare deals from over 90 lenders to find you the best rate.
Documents you'll typically need:
- Proof of ID (passport or driving licence)
- Proof of address (utility bills, bank statements)
- Last 3 months' payslips
- Last 3 months' bank statements
- P60 from your employer
- Proof of deposit
Step 7: Surveys and Valuations
The lender will arrange a valuation to confirm the property is worth what you're paying. You should also consider getting your own survey to identify any issues with the property.
Types of surveys available:
- Mortgage Valuation - basic check for the lender (often free)
- HomeBuyer Report - mid-level survey, good for modern properties
- Building Survey - comprehensive survey, recommended for older properties
Step 8: Conveyancing
You'll need a solicitor or licensed conveyancer to handle the legal side of buying your home. They'll conduct searches, review contracts, and handle the transfer of funds.
Conveyancing typically takes 8-12 weeks, though it can be longer. Don't book removals or give notice on your rental until exchange of contracts!
Step 9: Exchange and Completion
Exchange of contracts is when the purchase becomes legally binding. You'll pay your deposit (usually 10% of the purchase price) and set a completion date, typically 1-2 weeks later.
On completion day, the remaining funds are transferred, the property officially becomes yours, and you can collect the keys. Congratulations - you're a homeowner!
Costs to Budget For
Beyond your deposit, there are several other costs to budget for when buying your first home.
Additional costs to consider:
- Stamp Duty - free up to £425,000 for first time buyers
- Solicitor fees - typically £1,000-£1,500
- Survey costs - £250-£600 depending on type
- Mortgage fees - some products have arrangement fees
- Removal costs - £300-£1,500 depending on distance and volume
- Furniture and decorating - budget varies!