A Simple Guide for First Time Home Buyers in the UK

Many people view owning a home a sign of financial responsibility. While their perspective might be true, buying a home comes with a lot of financial commitment. First-time home buyers must first learn all the commitments that come with buying a home. It starts with identifying the property they want, put their finances together, find a suitable mortgage that will assist them to pay for their home and they can finally move into their homes.

Owning a home is a smart long-term decision but first-time home buyers should know what they are getting themselves into. This first-time buyers guide will help buyers know what to expect when buying a home and the amount of financial responsibility that awaits them once they commit to owning a home. With this guide, it will be much easier to put your finances in order and secure a mortgage that you can comfortably repay when buying a home for the first time.

Evaluate your Financial Status…

First things first, before anything else you must evaluate your current financial status. Can your current financial status secure you a mortgage to acquire that home? Will your current income allows you to take a mortgage that you can repay comfortably every month? With your financial status, you should be able to pay a deposit for the home. It is wise to find an affordable home according to your current financial status.

The Amount of Deposit you will need to buy a Home…

A first-time home buyer should be able to raise 5% to 20% of the home value as a deposit on their own, before involving a mortgage plan. After identifying an affordable home of their choice, then they can find out its current market price to determine whether they can come up with a 5% – 20% deposit. A higher deposit will give mortgage companies extra confidence in giving you a loan to buy your home at a decent rate. We, therefore, advise first-time buyers to have a deposit higher than the required minimum of 5%.

A higher deposit shows how financially disciplined a first-time home buyer is and mortgage companies will not view your mortgage loan as a risk to their company. To get a good mortgage interest, first-time home buyers will need to have a 20% deposit or more. But to get the best interest deals in the market today, home buyers must be able to raise 40% of the home value to secure a good mortgage with the best interest.

Here’s how to simplify it. The higher the deposit raised, the better the interest deals you will get from your mortgage company, the more affordable monthly repayments will be and you will be able to secure a cheaper mortgage. The secret in having the best mortgage deals in the market lies in having a higher deposit.

Other Costs for Buying a Home…

You should also be aware of other extra costs involved when buying a home. Having a deposit is not enough. First-time home buyers should know that there are other costs involved when buying a home. Here is a list of the extra costs involved when buying a home.


1) Survey Costs – You will need a surveyor to check if there are any problems that might affect the price of your home.

2) Solicitor’s Costs – You will also need to seek the services of s solicitor who will help you handle all the legal processes when owning a home.

3) Stamp Duty – first-time buyers UK will need to pay a land and buildings tax on their properties. However, there is no stamp duty needed to be paid for the first £300,000 on homes worth up to £500,000.

4) Mortgage Valuation Costs – You will also need to pay for mortgage valuation fees which vary depending on the mortgage company you choose.

5) Furnishing and Decorating Costs – These costs are necessary to ensure that you move into a comfortable home.

6) Buildings Insurance – You will need to insure your home against any risks.

These costs are necessary and should, therefore, be included in your budget when buying a home for the first time.

Find a Mortgage…

This is the most important part of owning a home. This first time buyers guide will explain in detail what you can do to obtain a huge loan for your home and further explain how to find the best mortgage. First time home buyers in the UK should be able to secure a mortgage plan that is easy to repay. After you have found a suitable home for purchase, then you must agree on the price of the home with the seller before approaching a mortgage company for a loan. After coming to an agreement on the price, then first-time buyers can comfortably approach a mortgage company for a loan. There are procedures that mortgage companies follow when giving you a loan. They must first start with the valuation process of the property you intend to buy. They must weigh and see the market value of the home you intend to buy and see if the mentioned price is similar to the market price of the property.

After that, they will need to evaluate your ability to repay the loan. There are things you must do to increase your mortgage borrowing power. Some lenders may deny you a larger mortgage after reviewing your credit history, and some may not give you a loan at all. It is therefore important for first-time buyers in the UK to organize their finances, increase your credit rating and pay off any outstanding debts to be sure mortgage companies will offer a bigger loan to finance their homes.

As a new home buyer, you need to make sure that you can afford the monthly payments before committing to a mortgage. It is important to first evaluate your budget before you start the house hunting exercise. Lenders will also evaluate you to determine if you can afford the home loan and test your capability to pay in case the interest rate went up.

You will also be required to prove that you have a decent income for you to get the loan. Your current income will show the mortgage company your ability to pay back the loan comfortably without struggling. You can even get a pay rise to increase your chances of getting a bigger loan.

Besides getting a mortgage to finance your home, you can also use government-sponsored schemes to acquire a home.

Home buying schemes…

There are various government-sponsored schemes that help first time home buyers get on to the property ladder. These schemes help you to raise 20% of the property value and let you raise only 5% as your deposit. The rest of the amount will be raised financed by your mortgage company. This is a great opportunity for first time home buyers as the 20% given by the government will not attract any loan fees for the first 5 years.

A good example of a government-sponsored scheme is the Help to Buy scheme, which is available for first time home buyers.
What you need to know about help to buy scheme

1) They are available for first-time home buyers.
2) You cannot use the scheme to buy a property to lease out.
3) You cannot purchase a home for a cost that exceeds the already set price limit.

Getting the mortgage…

Since there is a wide range of mortgage deals in the market, getting the right one might be tricky. It will depend on various aspects. So it is imperative for you to conduct thorough research and consult professionals like brokers. Mortgage brokers can help you obtain a loan easier and faster by advising you on the best mortgage companies that will meet your mortgage needs. They understand the wide mortgage market and they will therefore offer a helping hand when finding the best mortgage plan with flexible repayments.

Freehold vs. Leasehold…

When it comes to buying a home for the first time home, you might choose to settle for the freehold. This means that you own the house and the land it rests on. If you are purchasing a flat, you will be investing in leasehold.

The application procedure…

Remember that your creditor will need to be sure that you will continue making your repayments on time. You will need to give proof of your income by giving out your bank statements and pay slips. You also need to give out data about your outgoings such as debts, household bills and other expenses like childcare and travelling.
If you are self-employed, you will your provide tax returns report and business accounts. All your financial records must be organised for lenders to easily assess your financial history. If you opt to use a mortgage broker, then find one that will advise you on how to organise your finances to gain a bigger borrowing capacity to finance your home.

After finding the best mortgage company, organising your finances, and coming up with a deposit for your home, you can now apply for a mortgage. As soon as the application process is complete and the mortgage company approves your loan, you can move into your dream home.

If getting a mortgage to purchase your dream home seems hard, do not panic yet. You can get somebody to guarantee your home loan. It means that a family member or a close friend can sign and agree to be accountable for paying the mortgage if you fail to make your repayments.