How to buy your first home

In this guide we talk through the steps it takes to purchase your first home!

Deciding to buy a home

Buying a home is one of the biggest decisions of your life, so naturally there will be lots of questions on your mind. Before applying for a mortgage, you’ll have to think about the type of property you’re looking for, your price range, and how soon you’re looking to move.

Buying a home normally takes between 3 - 6 months but moving times can vary, especially with Covid and the busy property markets. This will depend on who you’re buying from, how many sellers and buyers are connected to your purchase, and how good everyone's mortgage adviser and solicitor are at moving the process forward. If you’ve got any questions or concerns about the timescales for buying a house, you can speak to us any time from when you’re building a deposit, to when you get your keys.

We understand that buying your first home can feel confusing, and sometimes it’s not clear on what you need to pay for, who you need to speak to or what step to take next. That’s why our service is tailored to first time buyers, to help you through the process and make sure you feel confident that you have everything you need to buy your home.

Once you’ve made the decision that you want to buy a home, use our eligibility checker to take a look at what you could afford to borrow with your current circumstances.

Saving for a deposit

Building up a deposit is challenging. The minimum you’ll need to save for the deposit is 5% of the house value, so it's helpful to know what kind of property you're looking for and the rough price of it.

For example the average house price in the UK is around £232,554. To buy a home for that value, you’d need to save at least £11,628 for the minimum 5% required by lenders. It always helps if you’re able to save more than the minimum deposit amount. Increasing your deposit will lower the amount you need to borrow, so you’ll pay less interest back to your lender. This could help you to repay your mortgage back quicker and save you paying thousands of pounds in interest.

Putting down 10% would require you to save £23,255, but you’d have access to more mortgage deals through different lenders and it could mean you get a better interest rate on your mortgage repayments.

If you’re unsure on whether you have enough of a deposit or need some advice on how to build your deposit, our advisers can help you put plans in place. We can talk you through gifted deposits from Government schemes, investments or family. Our advice will depend on what your goals are, and when you’d like to buy. You can book a call with our advisers or speak to us on webchat.

Getting a mortgage approved in principle

Once you've got your deposit, it’s time to start looking at properties! We recommend setting up alerts on sites such as Rightmove, and registering your interest with your local estate agents.

Estate agents often ask for something called an Approval in Principle (AIP) when you start looking at properties . It’s essentially a confirmation from your mortgage broker (ideally, us!) on how much you can afford to borrow, taking into account your income and outgoings. Whilst it doesn’t guarantee that your mortgage will be approved, it does show that you are serious about buying and ready to start the process. It’s best to get an AIP arranged with us before you start to view properties, as some estate agents won’t let you view without one.

Agreements in Principle are also known as Mortgage in Principle, or Decision in Principle.They’re all the same thing! To request one from us, please create an account, fill in your personal details and click ‘Request Mortgage In Principle’. You’ll hear from one of our advisers or receive your certificate within 1 working day.

Once your offer on a home is accepted you can begin your mortgage application and start finding solicitors and insurances.

Finding the right mortgage

Once you’ve had an offer on a home accepted, the next steps are to:

  1. Receive advice
  2. Find a solicitor
  3. Complete your mortgage application

To get your home buying recommendation, you start by filling in all the details in your account. Applying for a mortgage through us is quick and easy – and all online.  We’ve built our service for first time buyers, so our application doesn’t just ask “how long do you want your mortgage for?” Because…well, how do you know that?!
We provide you with tools on our application form that can help you make those decisions, and see how much you feel comfortable paying towards your mortgage each month. Based on the information you provide us, we’ll search thousands of mortgages to find the right one for you. Our advisers make no commission on mortgages, or any of the other products we recommend, so you know the mortgage we’ve found for you is a totally unbiased recommendation.

Documents you’ll need to hand are:
  • Proof of ID - Driving license or Passport
  • Proof of address (within last 3 months) - Bank Statement, Council Tax Bill etc.
  • 3 Months Bank Statements (most recent) - main day to day bank account
  • Proof of Deposit (last 3 months bank statements) - e.g. Bank Statement, Savings Statement, Gifted Deposit Letter

Once you’ve finished telling us about yourself, you’ll have your personalised recommendation within minutes.

Finding a solicitor

A solicitor takes care of all the legal work that goes into buying your first home. This includes reviewing your mortgage offer, reviewing the contract between the seller and you, and arranging for you to pay your deposit. For these reasons, we can’t stress enough how important solicitors are when buying your home. You can read more about what a solicitor does, and why they are essential, here.

We recommend O'Neill Patient to carry out your legal work, as they’re the 2nd largest solicitor firm in the UK and are well known for putting their customers first.

It’s completely your choice whether you decide to use them. We recommend them based on their solid past performance, great customer service and their app which keeps you updated on any changes to your application. If you’ve got another solicitor in mind, we are more than happy to work with them too!

We’ll ask if you already have a solicitor in the property section of your application.If you don’t have a solicitor already lined up, we’ll give you a quote for O’Neill Patient when you accept our mortgage recommendation. If you’d like a quote before our recommendation, please request one through our webchat and our team will be happy to provide one.

Getting free homebuying advice

Getting advice is a step that is often overlooked. There are risks involved to owning a home with a mortgage so we think it’s important to provide you with advice specific to you and your circumstances.

At the end of your application, we’ll recommend what insurances you should take out and suggest a provider. This recommendation is tailored to you, so that should anything unexpected happen you can still afford to pay for your home. You don’t need to accept any of the insurances we recommend, we just want to make sure you have the options available to buy your home and stay in it, no matter what happens.

If you’re happy with our recommendations, you can sit back and let us do the work. You can confirm everything online and we’ll handle all the paperwork with the lenders and providers. If you do want to check through any documents, you can access them all in the document store in your portal.

If you have any questions about our recommendation, you can book to speak to an adviser. There’s no pressure to accept our recommendation and we’ll be happy to amend our recommendation to suit you.

Surveys

There are lots of different components that go into getting your mortgage approved and part of that is a valuation. A valuation is a survey a lender carries out to check your home is worth its value. There are also other surveys that can be carried out if you want more information about the home you’re buying.

We’ve teamed up with survey specialists Optimus, who can talk you through the surveying process and answer any questions you have. The survey is completely optional, but if you would like one, you can reach out to us on webchat to book. For any other surveying questions, we’ll also be on hand to advise you on the next steps and keep your mortgage application moving forwards.

Formal offer for your new house

A formal offer is a document a lender provides that states that they agree to lend you the money to buy your home. This happens shortly after your mortgage is approved and will be sent directly to your solicitors to carry out the legal work.

Our team will go through the formal offer document to make sure it’s exactly what you need, and a copy of the document will be available in your document store in your account. Generally a formal offer is valid for 6 months, which gives you time to arrange everything and move into your home. We’ll keep an eye on the deadline for you and we can apply for an extension with the lender if need be.

Completing the legal work

Having a good solicitor is so important to the homebuying process and keeping your application moving forward. It’s their job to assess if it’s legally advisable for you to buy your new home, so you can move in with peace of mind.

At this stage it’s your solicitor’s responsibility to keep you updated on the progress of your application. Once again we’d recommend O'Neill’s, as they have agreed to keep their customers up to date through the app and provide us with regular updates. We’re more than happy to work with a solicitor of your choice, but they will be responsible for keeping you updated on the progress of your legal work.

For more information on the legal work that is carried out at this stage, read through our blog on solicitors.

Getting your keys and moving in

Now for the exciting bit! Moving in and making your new house a home! By this point you’ll have exchanged contracts and have been given a date to collect your keys from your estate agent. You’ll also receive written confirmation that your mortgage has started and when the first payment will be taken. We can make sure that all your insurance policies are in place ready for you to enjoy your new home.

We’ll continue to support you even after you’ve moved in. You can contact us at anytime for support and we’ll keep reviewing your mortgage to make sure you’re on the best deal available. Our free OpenMoney app can also help you with all your money management needs in your new home, from saving on bills to putting money towards that new piece of furniture. You can download the OpenMoney app on both iOS and Android.

In the future we’ll also be introducing remortgages to our service, for when your current interest rate and term expires. We’ll help you to move from one mortgage to another to make sure you’re always getting the best deal available to you.