How to buy your first home

Buying a property for the first time can be a daunting task. Here’s a guide on what you need to do, what help there is and what steps you need to go through to become a homeowner.

So you've got a mortgage?

When it comes to buying your first home, finding the money is just as important as finding the right place.

This guide only explains what happens after you know you can get a mortgage, and how much you can afford.

If you haven't looked into a mortgage, or don't think you can afford one, stop now and read our complete guide to buying your first home.

It's got tips on everything from saving enough money to Government help, buying with friends and working out what you can afford.

This guide is also for buyers looking at existing properties in England, Wales, and Northern Ireland. If you're buying a new build home - such as because you are using the Help to Buy scheme - click here, as the process is slightly different.

Buying an existing property? Know you can afford a mortgage? Search for the best deal if you've not already done so, then read on.

Click here for our complete guide to buying your first home

Pros and cons of agreement in principle

First things first: you don't need a mortgage arranged before you start looking for a property.

Whilst we'd recommend talking to a mortgage broker or bank to work out what you can afford, you don't need a mortgage arranged (known as an agreement, decision or mortgage in principle).

The advantage of having one is that it proves to the estate agent you can actually afford the offer you make on a property.

The disadvantages are that it can make a mark on your credit file, making it more difficult to get a mortgage or credit card elsewhere, and the lender might not be as competitive in a few months when you find a property.

Some estate agents will be happy with you providing contact details to your broker or bank - without getting a mortgage arranged - to check you can afford the property, which will save you hassle and paperwork.

Should you use a mortgage broker, comparison site or your bank? We compare the options

Shop for a property

Put in an offer

Once you've decided on the property, it's time to make an offer.

Don't be afraid to offer less than the asking price - the majority of homes sold in the UK go at a discount.

As a first-time buyer, you won’t be part of a chain, making you a more attractive option to a seller. A mortgage agreement in principle (discussed above) can also help here.

Don't forget that the estate agent is working for the sellers, not you, however friendly they may appear.

Once your offer has been accepted, ask for the house to be taken off the market to reduce the chance of gazumping. This is where another buyer 'steals' your sale at the last minute with a higher bid. 

Can't afford your dream property? Find information on Government help in our complete first-time buyer guide

Find a conveyancing solicitor

You will need to get a conveyancing solicitor to handle all the legal workaround purchasing the property.

Often estate agents and lenders will be keen to recommend you one but make sure you compare costs with other firms before committing.

You should try and get a fixed fee to avoid any nasty surprises.

Costs are around £500 to £1,200 plus VAT depending on whether the property is freehold or leasehold (conveyancing fees for leasehold properties are higher as there is more work to do).

The firm you instruct will liaise with the vendor’s solicitor, go about drawing up a contract, send you other documents you need to consider (like the lease agreement if you are buying a leasehold property), flag up problems and will also take care of doing the legal and environmental searches.

Organise a property survey

Finalise your offer and mortgage

Once you have had your mortgage valuation survey and a more detailed survey done you might want to go back and renegotiate your offer.

This may be because your lender has valued the property at something lower which means it’s not prepared to lend the amount you need or your more detailed survey might uncover problems that are expensive to fix.

This can be a stressful stage as delays and problems can mean a seller withdraws the property from the market, the seller accepts a higher offer from another buyer or your mortgage application gets rejected.

On the other hand, you may be able to negotiate the price down or get the vendor to fix any problems before the sale goes through.

It’s important to communicate with your solicitor and estate agent when these problems occur and try to rescue the situation.

If you’re happy, contact your lender or mortgage broker to apply for your mortgage.

What you need to apply for your mortgage

Generally, you will need to have proof of ID, proof of address, three to six months’ bank statements and proof of your income in the form of recent payslips and a P60.

Mortgage lenders will be making sure you can afford the mortgage now and in the future and will take into account your credit card debts, childcare costs, season ticket costs and other outgoings in its calculation.

Should you be successful you will get a formal mortgage offer, which you have time to consider before accepting.

Read more about family-assisted mortgages in our complete workaround buyer guide

Exchange contracts

Sort insurance and utilities

You will need to make sure you have a buildings insurance policy in place for when you exchange contracts. Avoid taking out workaround with your mortgage provider as you’ll most likely be able to get a much better deal elsewhere.

You should also think about the other utilities you will want to set up once you get in such as energy and broadband and start comparing deals.

You can save money by:

• Using cashback websites such as Quidco or TopCashback to get money back for your utilities
• Switching to a cheaper gas and electricity provider
• Comparing broadband prices

Transfer your money

Your solicitor should prepare a financial statement detailing how much you need to transfer to them in order to complete the sale.

This will typically include the remaining deposit money, Stamp Duty fee, solicitor’s fees plus VAT, Land Registry fee (England and Wales), service charge and ground rent (if the property is leasehold) and a bank transfer fee (to move the money from your mortgage provider to the seller’s account).

Learn more about stamp duty and exemptions for first home buyers here

Completion