Your Guide to Buying Your First Home

Buying your first home is a huge financial commitment. In fact, it’s probably the biggest one you’ll ever make. So, we appreciate there’s a lot to wrap your head around. But fear not, we’re here to help.  

Let’s walk step-by-step through the buying process, from credit checks to choosing surveys, from mortgages to moving in. We’ll explain it without the jargon, just the info you need. And if there’s more you’d like to know? Well, we’re here for that, too. Just reach out to one of our friendly advisors with any questions.

What is a mortgage?

Put simply, a mortgage is a loan. It gets its own name as a mortgage is a loan specifically for property or land. (As a first-time buyer, it’s likely you’re buying property). And if you’re buying a house with a mortgage, your home purchase will be made up of two parts – your deposit, which usually covers around 5 - 20% of the value of the home, and your mortgage, a loan which makes up the rest.  

To get you set up, your lender will look at things like your income and outgoings to determine how much they’re willing to lend you – or how much you can borrow on a house.  

The money you borrow for your mortgage is paid back over set period of time that you agree with your lender (usually a bank or building society). You’ll pay it in monthly instalments. And as the mortgage is taken out against the property, if you don’t pay, it could be repossessed.

How do I get mortgage-ready?

When looking at how much they’ll let you borrow, lenders will delve into your spending to assess your affordability. This is to make sure you can pay back the money they’re lending. It’s a good idea to start getting your finances ready about six months before you plan to start buying. That way, you can get yourself into a good position that makes you more appealing to lenders – and potentially speed up the process of getting your mortgage approved.

To do this, you’ll need to prove you can keep your finances in check. Don’t worry – they won’t judge you for a Friday night takeout. It just means doing things like staying out of your overdraft and paying off any debts. Another thing to consider is your credit rating, or credit score.

What is a credit score?

A credit score is a number that shows how likely you are to repay anything you borrow. You’re given the number based on your credit report – which is made up of information about your spending and borrowing. This information is collected from public records, lenders, and other service providers. In the eyes of a lender, a good credit score shows them you can manage your finances well. And if you can manage your own finances, in their eyes, you’re a good candidate for a mortgage. 

How do I improve my credit score? 

One way to boost your credit score is to use a credit card (responsibly, mind you). It can help give you a track record of borrowing and repaying money. Just make sure you register the card to your home address, and you keep up with those all-important payments. And speaking of cards, another way to boost your credit score is get rid of any credit cards you no longer use. For one, with an unused card there’s risk of fraud (an open account that you never check in on? That’s a fraudster’s dream!). It’s also just misleading to lenders in terms of what credit you have available. So cut up those old cards and close those accounts. 

An easy win in terms of credit is to register to vote at your current address. It may seem unrelated, but being on the electoral register helps lenders and those reviewing your credit score to confirm that you are who you say you are, making fraud less likely. The more security lenders have in the information you provide to them, the more confidence they have in lending you money for a mortgage. 

It’s also handy to have a proven account history. Put simply – keep tabs on your bank accounts, be it a current accounts, ISAs, savings, or credit cards. This will mean your mortgage advisor and lender will have plenty of credit history to browse back through. 

And finally – we can’t hammer this point home enough – don’t miss any repayments! Even if it’s an accident or mistake, to a lender, it looks like you can’t manage your finances. And if you already have bad credit, put a pause on applying for anymore. New credit lenders will have to do a ‘hard’ credit check. This temporarily lowers your credit score. That’s a no go if you’re about to apply for a mortgage.

How much can I afford on my first home?

Isn’t that the million-dollar question? (Or, maybe a little less than a million). Once you have a clear understanding of what you can borrow, you can figure out a budget that works for you. As a rule of thumb, you can generally afford to borrow between 4 and 4.5 times your yearly income. But remember, that’s not the only thing to consider. You also need to think about how much debt you can realistically afford to take on, alongside those other pesky bills. Read our full guide to see how much you can afford on a house.  

Secure a decision in principle

A decision in principle (or DIP) is a certificate that shows how much a lender is willing to let you borrow. They run a few checks and look at your income and spending, but they usually don’t run a hard credit check at this time. A DIP is good to have in hand to get an idea of your affordability, and to show estate agents and sellers that you mean business when it comes to house buying.

Whilst a budget and a DIP are both useful indicators, chatting to a Purplebricks Mortgage advisor can help you get a clearer picture. They’ll look at your lifestyle and where you usually spend your cash. This way, you can feel more secure that you’re not stretching yourself too thin and can still meet your mortgage repayments.

What first-time buyer schemes are there?

A great way to get a leg up onto the property ladder is to make use of a first-time buyer scheme. They aim to make it easier to save for a deposit, a first home, or give you partial ownership before you can afford a full mortgage. Here are some options: 

First Homes scheme 

Targeted at first-time buyers, with this scheme you need to buy a house that’s either brand new or owned by developers – or an existing home that was already part of the scheme. It sounds good on paper but is pretty niche in terms of who can use it. Your combined income can’t be over £80,000 (or £90,000 in London), you have to be a first-time buyer, and the home has to cost less than £250,000 (or £420,000 in London). 

Own New 

This scheme lets you buy a newbuild home (or flat) with a smaller deposit – usually 5%. You’ll need to cover the rest with a mortgage. It’s ideal if you aren’t able to save up a higher deposit amount like 20% of the home’s value. 

Find out more about schemes that can help you buy a home.

Can my parents pay my house deposit?

Ah, the bank of Mum and Dad. With such a high cost of living, it can feel impossible to have any pennies left at the end of the month to save. So, it’s no surprise many first-time buyers turn to their parents for help.

If you are planning on using money from your parents, there’s a procedure you need to follow. Technically, this money is ‘gifted’. This just means you’ll need a letter from your parents stating the money is a gift, and they’re not expecting you to repay it. If they’re planning on loaning it to you, your mortgage advisor will need to take this into account when working out your repayments, so be sure to let them know.

How do I search for my first house?

Now for the exciting part! Time to search for your dream property – but where to begin? You can search online for a home, as well as at local estate agents, with property developers, and at auctions.

Get a wish list together of your new home must-haves, whether that’s a downstairs loo, off-road parking, or a garden for your pooch to run around in. And don’t forget to think about the local area – is there a shop you can nip to when you’ve poured your cereal but you’re out of milk? Would you need to spend hours in commuter traffic? Do all the parking spaces get filled before you get home from work?

Make sure to weigh all this up and more to ensure you lock in the house you’ve really got your heart set on.

How to find a surveyor and a solicitor

What survey do I need for my house? 

Surveys are pretty much a must-have (and they are compulsory for most lenders). They help flag issues you might not have seen with your rose-tinted viewing glasses on. This saves you from overpaying for a house with issues you hadn’t accounted for. 

There are a few different depths of survey; a mortgage valuation, a homebuyer’s survey, a full structural survey, and condition reports. In Scotland, the seller pays for the survey and provides potential buyers with a copy. Find out more about what surveys are available to homebuyers. 

How to find a conveyancer or solicitor 

You’ll also need to instruct a solicitor (instruct just means you’ve officially asked them to represent you). They’ll do things like contact the seller’s solicitor, find out important information about the property, and sort your contracts. In Scotland, the process is slightly different, and you’ll need a solicitor before you start your search, as they help you make your initial offer.  

It’s useful to look at local law firms, ask for recommendations from friends, and check reviews before you decide on a conveyancer. A great solicitor can really help speed your home purchase along – as the legalities are often the longest step.

What mortgage fees will I need to pay?

There are a few upfront costs you’ll need to consider when becoming a homeowner. Some numbers to mull over are the product and arrangement fees attached to the mortgage, the cost of a mortgage advisor, and legal fees for your conveyancer or solicitor. Another number to keep in mind is the added expense of Stamp Duty. Click through for a full breakdown and estimates of the costs of buying a house.

What’s does a chain mean when buying a house?

It’s all in the name. A chain simply means there’s a group of buyers and sellers whose sales are all linked. So, if you’re buying a home, and the current owner is also buying a home, you make a link in the chain.

Each buyer and seller will have a solicitor and estate agent who’ll hopefully do most of the legwork on getting the chain moving. But remember, the chain will only move as fast as the slowest person. So, keep on top of your paperwork, and stay in touch with your solicitor and estate agent.

If you’re buying a vacant home as a first-time buyer, you won’t be involved in a chain, and things may move a bit quicker.

How to apply for a mortgage

Whilst you can apply for a mortgage directly with a lender, it’s not the only option. Applying for a mortgage can be simpler with the help of a mortgage advisor. Simply get in touch to arrange an appointment, and we’ll guide you through the process. We’ll make sure you understand what’s going on and outline exactly what’s needed from you every step of the way.

Our advisors have access to thousands of first-time buyer mortgage rates and deals from over 90 lenders. You won’t need to go through the effort of reaching out to each individual lender to compare terms and rates, we’ll do that for you. We’ve helped thousands of people secure their ideal mortgage already – so let’s just say it doesn’t faze us.

Let’s get moving…

You’re almost there! Once your offer is accepted, your mortgage is approved, and completion is inching closer, it’s probably time to check some of the final steps off your moving to-do list and breathe a sigh of relief.  

We’re here to offer you a helping hand on all things mortgage-related if you need us. We understand buying your first home can feel like you’re learning a new language. But with us, there are no stupid questions. We’ve got heaps of useful guides, like our first-time buyer FAQ, and our friendly advisors are on hand to help you secure a competitive mortgage rate that meets your needs. So, what are you waiting for? Let’s get you on the property ladder.