Your Ultimate First-Time Buyer Guide: Everything You Need to Know to Purchase Your First Home
- Adrian Collins
- Jul 17
- 17 min read
Updated: Aug 15
As a first-time home buyer, the journey can sometimes feel overwhelming, but our latest guide is here to help you navigate every step with confidence. This comprehensive roadmap will explain the entire process, help you make informed decisions, and turn your dreams of homeownership into reality, all in one clear, easy-to-understand resource.
What Will This Guide Cover?
In this guide, we’ll walk you through four simple steps to obtain a mortgage and buy your first home. We’ll explain the different fees involved, what timing to expect, and how to improve your chances of approval. You’ll learn how to secure a mortgage agreement early, how to make competitive offers, and what to do once your offer is accepted. Plus, we’ll explore useful tips on home surveys, conveyancing, and avoiding common pitfalls, all in straightforward language.
Why Use This Guide?
Our goal is to empower you with clear, easy-to-understand information about the home-buying process. Your first home purchase is a major step toward your future, and having the right knowledge can make it smoother and more enjoyable. We’re here to support you every step of the way so you can confidently take the next step toward getting the keys to your first home!
Your Journey Starts Here
As you read through this guide, think of each section as a step closer to your new front door. Every chapter is designed to build your confidence, demystify the process, and prepare you for what’s ahead. Quick piece of housekeeping - throughout the guide, you’ll see 🔖 followed by a link — clicking on these will take you to a more detailed overview of that specific topic, empowering you with more knowledge. Whether you're just starting out or ready to make an offer, we’re here to help simplify the journey. Welcome to the best comprehensive resource for first-time buyers — let’s get started!
First-Time Home Buyer Guide: Lets Start With How to Obtain a Mortgage in 4 Simple Steps
Step One: Should I Use A Mortgage Broker or Go Direct to My Bank?
Deciding whether to engage with a mortgage broker or apply directly through your bank is the first step. A broker offers access to a wide range of lenders and can help you find the best deal that suits your circumstances. They handle much of the paperwork, offer you a single point of contact throughout and sometimes uncover deals that aren’t available to the general public. Going directly to your bank limits options and you may end up paying more in the long run.
Step Two: Know Your Limits
Understanding how much you can borrow is crucial. Most lenders will lend around 4.5 times your annual income with some now lending as much as 6 times your income. This will always vary depending on your employment status, savings, expenses, and credit profile. It’s wise to work out your maximum borrowing capacity early, so you can focus your house hunt on properties within your budget.
Step Three: Organise Your Documents & Check Your Credit Status
Before you start viewing homes, gather all necessary paperwork. So your ID, recent bank statements, payslips or proof of income, evidence of your deposit and, if you are self-employed, your company accounts / tax calculations. Checking your credit report with agencies like Experian, Equifax, or TransUnion helps spot issues early, so you can improve your score and avoid surprises when applying for a mortgage.
Step Four: Secure Your Agreement in Principle
An Agreement in Principle (AIP) confirms how much a lender may be willing to lend you based on your financial profile. It’s a crucial step as it shows sellers and estate agents you’re a serious buyer and provides you with a clear budget. Getting your AIP early also speeds up negotiations and reduces the risk of wasting time on homes outside your budget.
What Fees will I Pay and When?
Understanding the costs involved in buying your first home helps avoid surprises further down the road, here’s what to expect:
Mortgage / Broker Fees:
Many brokers and lenders do not charge upfront fees, but some may ask for a fee at the start or charge a product fee between £500-£1,000 further down the line. These can often be added to your mortgage loan. 💡Ask your broker early doors if they are charging any fees. You can check our fees page here.
Legal & Conveyancing Fees:
Typically around £1,500 to £2,000 covering searches, contracts, and registration. You’ll usually pay an initial deposit to your conveyancer (£200-£500) with the balance due at completion.
Surveys:
Depending on your property, a basic Homebuyers Report (£500-£800) or a full Building Survey (over £1,000) provides insight into the property's condition and any issues. 💡Your chosen lender will carry out a basic valuation – this IS NOT a survey so shouldn’t be relied up as such.
Stamp Duty:
Stamp Duty is the tax paid when purchasing over a certain threshold; rates vary depending on the purchase price. Check the latest Stamp Duty Rates.
Understanding the Different Types of Mortgages
Choosing the right mortgage can be complex, so understanding your options is essential:
Repayment (Capital & Interest):
You pay each month towards reducing the loan (capital) and interest on the remaining amount. By the end of the mortgage term, and providing you’ve kept up with your repayments, the entire debt is paid off, making this a safer choice for most homebuyers.
Interest-Only:
You pay only the interest each month, leaving the original loan untouched. The balance remains until you repay it at the end of the term, often through savings, investments, or selling the property. This can lower monthly payments but carries the risk that you'll need a clear repayment plan once your mortgage term expires.
Fixed-Rate Mortgages:
These loans have a stable, unchanging interest rate for a set period, typically 2 to 10 years. Your monthly payments stay consistent during this time, making budgeting easier and therefore offering some peace of mind. After the fixed period, the rate might revert to the lender’s standard variable rate (SVR), be careful of this as usually results in higher monthly payments. 💡You should expect to hear from your mortgage broker 6 months ahead of your initial fixed rate ending, a point when you can consider booking your next deal.
Tracker Rate Mortgages:
These follow the Bank of England’s base rate or the lender’s own tracker rate if applicable, meaning your interest payments fluctuate with the rate changes. They offer potential savings if rates fall but also risk higher payments if rates increase. Trackers are a good choice if you require more flexibility and also feel comfortable knowing your repayments could rise as well as fall.
Discounted Rate Mortgages:
For a set period, usually 2-5 years, you get a discount off the lender’s Standard Variable Rate (SVR). Payments can vary with changes in the SVR, which means your monthly payment may go up or down.
Variable & Flexible Options:
These include offset mortgages (also now available with a fixed rate), where savings are linked to your loan to reduce interest, and facilities that allow overpayments or payment holidays, providing flexibility but often with certain costs or restrictions.
Improving Your Credit Score
A good credit score improves your chances of mortgage approval and can help you secure better interest rates. Key steps include:
Check Your Credit Reports:
Obtain copies from agencies like Experian, Equifax, or TransUnion. Review for errors and dispute any inaccuracies.
Make Payments On Time:
Consistent, punctual payments on credit cards, loans, and bills build a positive credit history.
Keep Credit Utilisation Low:
Use less than 30% of your available credit limit on each card to maintain a healthy score.
Limit Credit Applications:
Avoid applying for multiple loans or credit cards in a short period, as this can negatively impact your score.
Reduce or Clear Existing Debts:
Paying off outstanding balances and closing unused credit card accounts can boost your rating.
Build a Credit History:
If you're new to credit, consider using a credit card responsibly—paying in full each month—and registering to vote at your current address helps verify your identity.
Deposits: How Much & How to Get Help
Your deposit is the upfront money you pay towards your purchase, usually at least 5% of the property price.
How Much Do You Need?
The larger your deposit, the better your mortgage options. Most lenders prefer at least 5% of the purchase price but some specialist schemes accept less, with one or two now offering zero deposit options.
Can Family Help?
Yes! Gifts or loans from family members can contribute towards your deposit, either as a gift or with a formal ‘charge’ on their property.
Can You Buy Without a Deposit?
While uncommon, some lenders offer 100% mortgages, but these come with stricter conditions and higher rates. Alternatively, buying from family at below market value, or using a family member’s house as security with a ‘charge’, can help you buy without a large deposit.
Smart Savings Tips:
Use a Lifetime ISA, which offers a government bonus of 25% on savings up to £4,000 annually. Start saving early, cut down on unnecessary expenses, and avoid taking on unnecessary debts to reach your savings goal faster.
Making an Offer & Negotiation Tips
When you find a property you like, approach making an offer strategically:
Research the Seller’s Situation:
Find out how long the property has been on the market and why they’re selling. If they’re in a hurry, you may negotiate a lower price. If not, a higher offer might be necessary to secure your dream home – if you love it the chances are others do too!
Start Low & Negotiate:
Depending on the above and the sellers motivation / overall quality of the property, make an initial offer below the asking price to leave room for negotiation. Be ready to justify your offer with your mortgage approval and market research.
Show Your Serious Intent:
Let the estate agent know you have an Agreement in Principle and are ready to proceed quickly. This can make your offer more attractive. And DO NOT be forced into speaking with their own mortgage broker - remember, an estate agent acts for their seller (vendor) and not you!
Don’t Reveal Too Much:
Hold back from sharing your maximum offer upfront, and be ready to negotiate if needed.
My Offer Has Been Accepted, What Next?
Fantastic, now it's time to get serious! Your next steps are:
Engage a Solicitor / Conveyancer:
Find a reputable solicitor to handle legal documentation, property searches and the transfer of ownership. Expect to pay around £200-£500 upfront for initial searches and legal work.
Submit Your Mortgage Application:
Your broker or bank will need your recent payslips, bank statements, details of the property, and the seller’s information. Submit everything promptly to keep the process moving.
Await Your Mortgage Decision:
It usually takes 1-4 weeks to receive your mortgage offer. During this time, your broker will keep track of the progress and make sure all everything is in order once your mortgage offer comes through.
Arrange a Property Survey:
While your lender will conduct a valuation to confirm the property’s value, a more detailed survey (costing £500-£1,500) can uncover hidden issues and help you decide whether to proceed or negotiate repairs. It’s best practice to organise a survey but not until you have your mortgage offer.
Arrange Insurance & Protection:
Once your mortgage offer is issued, arrange buildings insurance to start on exchange date. Consider income protection, critical illness cover, or life insurance to safeguard your family and mortgage payments.
Prepare for Exchange & Completion:
Your solicitor will finalise contracts, and once everything is in place, you’ll exchange legally binding agreements. Set your move date, pay your deposit, and plan your move!
Moving Day:
On completion day, funds are transferred, the official ownership change occurs, and you collect the keys. Ensure utility accounts are transferred, and your new home is ready for your arrival.
Should I Arrange a Survey?
Before completing your purchase, getting a professional survey can be a wise investment, various options can be summarised as follows:
Mortgage Valuation:
Usually free when applying for your mortgage, this will confirm the property’s value. But remember that it’s primarily for the lender’s benefit, not yours.
Homebuyers Report:
A detailed assessment costing around £500-£800, checking for issues like dampness, subsidence, or leaks — giving you peace of mind.
Building Survey:
The full inspection costing £800-£1,500 is suitable for older or unusual properties, revealing structural problems and repair estimates.
I'm Buying a New Build Property, Do I Need a Survey?
New Build homes often have a warranty that protects you for up to ten years. For the first two years, the builder must fix any problems but you may have to wait for them to do so! With this in mind, having a survey might just uncover any issues before you exchange contracts, therefore avoiding any stress once you've moved in.
💡Shop around to find the right survey for your needs, and consider getting a survey once you receive your mortgage offer to avoid surprises after you’ve moved in.
Conveyancing & Legal Process
Conveyancing involves legally transferring ownership from seller to buyer:
Choose a Conveyancer:
They handle all legal paperwork, local authority searches, and registration. Ask for recommendations as your conveyancer will play a crucial in making your purchase happen. You could do a lot worse than to select a local reputable conveyancer.
Key Stages:
Your solicitor will review contracts, conduct searches, request additional information, and coordinate exchange of contracts. After signing, they will manage the transfer of money and register your ownership.
Exchange & Completion:
Once contracts are exchanged, you’re legally committed to buy. On completion day, your solicitor completes the transfer, you pay the remaining funds, and you get the keys.
💡Keep your lines of communication open with your conveyancer, and ensure your deposit is ready for transfer at the appropriate stage.
Final Tips
Stay Organised:
Keep all documentation in order and communicate regularly with your mortgage broker and solicitor.
Be Patient:
The process can take time, often around 12–16 weeks from initial offer to signing contracts, but careful planning helps avoid delays.
Prepare for Moving Day:
Book removals early, pack systematically, and make arrangements for utilities, internet, and council changeovers.
And Finally, Enjoy Your New Home:
Once you’re moved in, take your time to settle, meet your neighbours, and enjoy your new space!
Ready to Start?
If you have questions or need tailored advice, our team is here to help. We’re currently offering free mortgage advice to first-time buyers borrowing over £225,000 (excluding some schemes, check our Fees Page for full details). Click below and let’s start turning your homeownership dreams into reality!
Your home may be repossessed if you do not keep up repayments on your mortgage.
As with all insurance policies, conditions and exclusions will apply.
Typically we do not charge a fee for arranging a mortgage, however, the actual fee will depend on your circumstances.
Confused By Some Terms? Here’s our Jargon Buster!
We know the financial world loves to complicate things with fancy terms. But fear not! We’re here to make everything simple and clear. Use this handy glossary to navigate the home-buying process with ease. Let us help you focus on what really matters, getting the keys to your new home!
Agreement in Principle – an AIP (also referred to as a DIP) is an indication from a lender that they can, in principle, consider supporting you with a mortgage.
Affordability Check – to determine how much money a lender will consider offering you.
Annual Percentage Rate of Charge (APRC) - this is the interest rate which refers to the total cost of borrowing including any fees. It should not be the sole reason for choosing one mortgage over another as it is calculated across the whole mortgage term and will include the lenders variable rate, and it is not good practice to stick on a variable rate.
Bank Base Rate (BBR) - this is a variable rate set by individual lenders, with some simply calling it their ‘standard variable rate’.
Buy To Let (BTL) - a mortgage which is secured against a property for investment purposes.
Capital & Interest – more commonly known as a Repayment Mortgage where you agree to pay both capital and interest to your lender, so your balance reduces each year. Regarded as a safer way to repay a mortgage as, providing you meet all your monthly repayments during the whole term, your mortgage will be cleared in full.
Capped Rate – where your mortgage interest rate will not go above a certain level if interest rates increase but can come down should interest rates decrease.
Cash Back – lenders can offer various incentives to make their deals more attractive, offering you a cash back on completion (towards your Conveyancing costs for example) is one way of doing so.
Chaps Fee – charged by the lender to electronically transfer mortgage funds to you / your Conveyancer.
Chain – a group of buyers and sellers that are connected. In most cases the longer the chain the longer it may take for you to move in.
Completion Date – the date which is agreed by all parties as ‘moving day’.
Conveyancing – this the legal process for buying and selling property, typically completed by a Solicitor or Conveyancer.
Critical Illness Cover (CIC) - this is a type of insurance that pays out if you are diagnosed with a critical illness or injury. (Conditions will apply)
Daily Interest – your mortgage interest will be calculated daily, the most efficient way of repaying a mortgage.
Decision in Principle (DIP) (also referred to as an AIP) is an indication from a lender of how much you can borrow.
Decreasing Life Insurance / Cover – the cheapest form of life insurance, this can be set up to protect a repayment mortgage, as the amount of cover reduces each year just like your mortgage. (Conditions will apply)
Deposit – refers to the amount you intend to put down when purchasing a property, usually expressed as a percentage of the purchase price with the minimum typically being 5%. Increasing your deposit will usually result in a better deal being offered by lenders.
Discounted Rate – this is where your lender offers you a discount off their standard variable rate for a specific period, with the only drawback being that your mortgage payments may go up as well as down.
Early Repayment Charge (ERC) - this is typically charged by a lender if you exit your mortgage agreement early. So, if you have signed up to a lower rate for a predetermined period (so a fixed, discounted or tracker rate for example), you are likely to incur an ERC if you need to redeem your mortgage early.
Energy Performance Certificate (EPC) - this is now required by law for all homes bought, sold, or rented to provide information on how to make your home more energy efficient.
Equity – refers to the difference between the outstanding mortgage and current value of the property. For example, if you owe 100k and you sell your home for 200k, you will have 100k ‘equity’.
Exchange of Contracts – the date you become legally committed to purchasing your home and finally setting your completion (move) date.
Exit Fee – this is a further admin fee a lender can charge when you close your mortgage with them.
First Mortgage Payment – your first payment will be higher than your usual payment as it is likely to include ‘initial interest’ for the month your mortgage completed. (a few lenders will collect payments in arrears, so nothing to pay during the first month following completion)
Fixed Rate – if you require stability with your mortgage payments you should consider a fixed rate mortgage, whereby your monthly payments will be ‘fixed’ for a specific period, usually 2 or 5 years.
Freehold Property – where you own both the property and the land that it sits on.
Further Advance – this is where you raise some additional funds from your current lender.
Gazumping – when another interested party comes through with a higher offer on a property being purchased despite a deal being formally agreed beforehand.
Gifted Deposit – this is where someone else, usually a family member, provides you with funds towards purchasing a property.
Ground Rent – is an annual charge payable by leaseholders to the freeholder.
Guarantor Mortgage – is most common for first time buyers, where a third party, usually a family member, agrees to meet your mortgage repayments if you are unable to.
Income Protection Insurance – this insurance policy will pay out a proportion of your income if you are unable to work due to illness or injury. (Certain conditions will apply).
Initial Interest – is interest charged from the day funds are released to your Solicitor to the end of that month – hence why your first payment will often be higher.
Interest Coverage Ratio (ICR) – a lender will apply their ICR to determine how much they will lend towards purchasing a property for investment purposes.
Interest Only Mortgage – this is where you elect to pay just the interest due and therefore none of the original amount borrowed. You will need to ensure that you have adequate means to repay your mortgage at the end of your term – i.e. pension, investments or downsizing the process of selling your home to purchase a cheaper one. Although this can be a riskier way of repaying a mortgage it can work very well, particularly if you have variable income throughout the year, maybe if you are self-employed for example.
Joint Borrower Sole Proprietor (JBSP) mortgages allows someone else, maybe a parent, to be on a mortgage to help boost affordability whilst not being noted on the property title deeds.
Key Facts Illustration (KFI) – the lender (or your broker) will provide a KFI to outline the full terms of the mortgage product you are applying for.
Land Registry – this is the official organisation that holds details in relation to the ownership of land and property.
Leasehold Property – this is where you own the property but not the land it sits on, so typically most flats. If you require a mortgage, it is advisable to avoid properties being sold with less than 75 years remaining on the lease, otherwise you may need to consider extending the lease during your ownership, which can be a costly thing to do. As lenders like to avoid properties with shorter leases, it will become increasingly more difficult to obtain a mortgage as the years tick by, which could then hinder any future sale.
Let to Buy (LTB) - a LTB mortgage is where you re-mortgage your current home onto a Buy to Let to then enable you to purchase your next home without selling your current property.
Level Term Insurance / Cover – this offers you a fixed amount of life insurance, typically used to protect your mortgage and family. (Conditions will apply).
Loan to Value (LTV) - this is the mortgage amount as a percentage of a property’s value or purchase price. So, if you are purchasing a property for 200k and borrowing 150k, you are raising a mortgage that is 75% LTV.
Local Authority / Environmental Search – an enquiry submitted to the local authority in relation to any proposed road building, planning permission for previous building work, environmental and mains sewer connection etc.
Mortgage Deed – is a legally binding document confirming you are entering into a contract with your mortgage provider and one that is secured against your property.
Mortgage Offer – once your application has been approved your lender will issue a mortgage offer which outlines their full terms and conditions.
Negative Equity – this is where your property value falls below the mortgage amount left to repay.
Offset Mortgage – whereby you can offset your savings against your mortgage, therefore only paying interest on the amount borrowed minus any savings which are linked to your mortgage.
Overpayment – an additional amount paid off your mortgage, which could be a lump sum or a monthly amount over and above your normal monthly repayment. Making overpayments is a wonderful way to repay your mortgage sooner.
Payment Holiday – this is where your lender agrees a payment free period. It is important to remember that interest will continue to be charged with any ‘holiday’ months potentially added onto the term of your mortgage.
Porting / Portability – this is where you are moving and your lender allows you to move your current mortgage to your next home. (This is not a given so Terms and Conditions will apply)
Re-mortgage – is the process of transferring your mortgage from one lender to another. This occurs at the end of any special rate with your lender. An early repayment charge may apply if you exit / change before your current deal ends.
Serious Illness Cover (SIC) – like CIC in that this type of insurance pays out if you are diagnosed with a serious illness or injury. (Conditions will apply).
Service Charge – normally applies to leasehold properties and is charged to help maintain the freehold building along with any shared / communal areas, such as stairways / grounds etc.
Stamp Duty Land Tax (SDLT) - this is a tax that is payable when you purchase land or property over a certain threshold.
Standard Variable Rate (SVR) - this is the interest rate you will revert to once your initial rate (for example fixed) has expired. As these rates are generally higher it is advisable to engage with a mortgage broker to review your options well beforehand.
Survey – a report on the general condition of the property you are purchasing. In addition to a basic valuation there are two upgrades available to you 1) Homebuyers Report 2) Building Survey.
Term – is the period you agree to repay your mortgage over, ranging from 5 to 40 years with most lenders.
Title Deeds – are legal documents which record the ownership of property / land, details of which are held electronically by the Land Registry.
Tracker Rate – this is where your mortgage interest rate will follow the Bank of England base rate. These types of mortgages often provide greater flexibility as many do not tie you into Early Repayment Charges.
Valuation – lenders will conduct their own valuation before they offer you a mortgage, basically to ensure it is worth the level stated.
Vendor – is the person selling a property.
Published by Adrian Collins, Founder of Beechwood Mortgages Ref: 219335 with review and approval from Stonebridge Mortgage Solutions Limited who is authorised and regulated by the Financial Conduct Authority Ref: 454811.
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