Buying a house can be exhilarating but stressful, especially for first-time buyers. Our first-time buyer guide helps you understand the process and timelines, reducing stress and anxiety. Follow our guide to make informed decisions and enjoy a smooth journey toward purchasing your first home.
Mortgage Broker or Direct to Your Bank?
Before establishing a realistic budget for your first home purchase, it's essential to understand the benefits of working with a mortgage broker compared to dealing directly with a bank. A mortgage broker can swiftly offer a comprehensive view of the whole market tailored to your unique situation and requirements. They will have access to a wider array of mortgages from numerous lenders, increasing the likelihood of securing a deal that best fits your needs.
In contrast, banks will only offer their own mortgage products, which may limit your options. By consulting with a mortgage broker, you can quickly get pre-qualified for a loan, known as a Mortgage Agreement in Principle (AIP), giving you a clearer idea of how much you can borrow and therefore which properties are within your price range.
Not all mortgage brokers charge a fee, so it's worth shopping around. For full details on when we may charge a fee, check our Fees page. For more insights, read our article Do All Mortgage Advisors Charge Fees?
Establish a Budget
The next step in the home-buying process is setting a realistic budget. Your mortgage broker—or lender, if you prefer to go direct —will assess your monthly income, expenditure, and available deposit to determine your borrowing limit. Knowing how much you can borrow enables you to start your house search with a clear understanding of which properties fall within your price range.
For a comprehensive overview, refer to our article How Much Can I Borrow?
Secure your Mortgage Agreement in Principle
A Mortgage Agreement in Principle (AIP) offers a written estimate indicating how much you can borrow and is an initial approval from the bank. Your mortgage broker can assist with this, and it's wise to secure an AIP before viewing properties to minimise potential disappointment further down the line.
To secure your mortgage AIP you will need to provide some basic documentation, typically including your most recent pay slip, bank statement, and identification. If you are self-employed, you will need to supply your latest year's accounts, tax calculation, and tax year overview.
You may find the following articles helpful - Understanding Mortgage Agreement in Principles and Mortgage Application Document Checklist.
Now, armed with your AIP, start researching the local areas where you want to purchase. Register with local estate agents and share your mortgage AIP to show you are a serious buyer and have your mortgage all lined up. Do not feel pressurised to engage with the estate agents mortgage broker.
Make an Offer
Once you have found a property that meets your criteria, work with the estate agent to make an offer that fits your budget. Consider the general condition of the property, the time it has been on the market, and the current owner's motivation for selling.
For more essential tips on putting forward your first offer, visit How to Make an Offer on A Property in our Learning Centre.
Submit Your Mortgage Application
Once your offer has been accepted, arrange another meeting with your mortgage broker. At this point you will need to provide up-to-date payslips, bank statements, solicitor's details, property details, and the estate agent's contact information.
Await your mortgage offer, which can take anywhere from 24 hours to several weeks to arrive. Once it’s arrived, check the details to ensure it matches your expectations, your broker will also do this for you.
Find a Solicitor
You will need to instruct a solicitor, commonly referred to as a 'Conveyancer', to support you with your purchase. Your solicitor will manage all the legal paperwork, including local searches, drawing up contracts, and overseeing enquiries with the seller’s solicitor. The conveyancing / purchase process takes around 8 to 12 weeks, sometimes quicker but sometimes much longer - so brace yourself!
Organise a Survey
Your chosen lender will arrange a valuation of the property as part of their checks before offering you the mortgage. Remember, this is not a survey. It's advisable to seek an independent survey for a more thorough inspection. Upgrading the lender’s valuation may be cheaper, but an independent survey provides more choice and reduces your costs before mortgage approval. For more details, check out Should I Arrange a Survey in our Learning Centre.
Review Your Protection & Insurance Cover
Buying a home is a huge milestone in life, quite possibly your biggest investment. Just like any big investment, it's important to make sure you're properly protected. Mortgage protection is an umbrella term encompassing various insurance products designed to protect you financially (and, if applicable, your family) in the event of death, serious illness, or injury. When you take on a mortgage to purchase a property, it is crucial to consider implementing some form of protection to ensure that you, your home, and your loved ones are secure.
While comparison sites offer a quick snapshot of costs, consulting with a mortgage protection advisor brings several significant benefits, leading to more detailed and cost-effective coverage.
To dive deeper into the many ways that you can protect yourself and your mortgage check out our article, Safeguard Your Home, An Essential Mortgage Protection Guide.
Time to Exchange Contracts
Once your mortgage offer has arrived and your solicitor is drawing up contracts, you are almost over the line. If you appointed an independent survey, you should have received the results by now.
Finalise your mortgage protection and insurance arrangements with your broker. You will be ready to exchange contracts once all parties agree on a completion date and your solicitor has requested your deposit funds. Upon exchanging contracts, you become legally committed to the transaction, so it is crucial to initiate your insurance coverage immediately.
Prepare for Completion Day
Your solicitor prepares a completion statement and requests funds from your mortgage lender. On moving (Completion) day, the seller vacates the property, and the keys are released by your estate agent once your mortgage funds have arrived with your solicitor. Your solicitor will send the funds from your mortgage lender to the seller’s solicitor and, if applicable, send the stamp duty payable to HMRC. After completion, you will receive a copy of the registered title from the land registry.
Moving day has arrived so the seller vacates the property, and the keys are handed over once your mortgage funds have been transferred. Your solicitor finalises the transaction and updates the land registry with your details.
Top 10 First-Time Buyer Guide, in Summary
The house buying process can be overwhelming, but with the right guidance and knowledge, it can be managed efficiently. Establishing your borrowing capacity, saving for a deposit, building a good credit score, and researching mortgage options are critical steps for first-time buyers. If you have any questions along the way or need further assistance your mortgage broker, if this is your chosen path, will be on hand supporting you throughout.
We hope this guide has provided some valuable insights into the key stages involved in buying your first home and the timelines for each stage. Happy house hunting! 😎
Your home may be repossessed if you do not keep up repayments on your mortgage.
Typically we do not charge a fee for arranging a mortgage, however, the actual fee will depend on your circumstances.
Published by 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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