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Guide to Buying Your First Home

Buying a home is the largest purchase most people are likely to make and for first time buyers securing a mortgage for the first time can be a daunting prospect

1. Start Saving

When looking for a mortgage, particularly for the first time, it’s helpful to be able to demonstrate to lenders that you can afford a mortgage by having a track record of saving.

2. Low Deposit Mortgages

You only need a 5% deposit to apply for some mortgages.  For example, if you are buying a home for £100,000 you only need £5,000 for a deposit for some mortgages, plus some extra cash for solicitors’ fees and other costs.

How much you can borrow depends on your personal circumstances with affordability based on your income as a major consideration.  However, outgoings are equally important in assessing how much you can afford to borrow, so restricting your spending is a good thing when preparing to buy your first home.

3. Need Some Help?

The mortgage market is very competitive and it can be hard to understand exactly what is on offer, but the good news is there’s plenty of help to be found!  The Money Advice Service, for example, provides some really useful independent advice.  Under new rules introduced in April 2014, lenders and brokers must offer advice by recommending the most suitable mortgage for you.  They will assess the level of mortgage payments you can afford by taking into account income as well as your debt repayments and various outgoings.

A good starting point in finding a mortgage is your bank or building society as they know you and your financial situation.  Mortgage brokers will give you advice on choosing your mortgage from the entire market, whereas the majority of banks and building societies will give advice only about their own products.  Most brokers will charge you a fee or earn commission for the products they sell. Mortgage Advice Bureau advisors have a wealth of knowledge and experience to help you find the right mortgage.

There are also a number of Government schemes to help make buying your own home more affordable:

Help to Buy Equity loans and Help to Buy Mortgage guarantees – visit for further information.

Right to Buy for council and housing association tenants – visit

Shared Ownership is a way of part-owning, part-renting a property. With shared ownership you can buy a newly built home or an existing one through sale or resale programmes offered by housing associations. You’ll need to take out a mortgage from a lender who specialises in this type of lending to pay for your share of the home’s purchase price, or fund this through your savings.  Typically, you will only purchase 50% of the property from the housing association, paying a rent to the housing association for the residual element.  This can make buying your home much more affordable and most housing associations will allow you to “staircase” (i.e. buy a greater share) into eventual full ownership.

4. Comparison Tables

Mortgage comparison tables are also helpful, but remember rates aren’t the whole story, you need to consider factors such as fees, introductory periods and terms of the loan.  Look out for:

APRC (Annual Percentage Rate of Charge) is a method of comparing interest rates and charges for credit between lenders so that you can make an informed decision on the price implications of your mortgage.  All lenders must show an APRC whenever an interest rate is shown

Deposit size. The higher the deposit, the lower the interest rate you are likely to get
Length of deal.  Do you want to be locked in for a long period or have more flexibility? There will be charges if you switch out of a deal before it ends

The fees. You need to work out the total cost of a mortgage deal to make a true comparison.

The standard variable rate, which your mortgage will switch to once your fixed rate deal ends

Flexibility. Can you overpay your mortgage without being charged and can you take a break from making payments?

How often is interest charged? Will it be paid daily, monthly or annually? Daily interest works out cheaper.

5. Fix or Float?

Mortgages come in all sorts of shapes and sizes.  A fixed rate mortgage – typically two to five years – is ideal for first time buyers and people wanting to plan ahead without any unwanted surprises.  This type of mortgage offers certainty and stability for those who prefer to budget for a fixed period of time.  After the fixed rate period ends the mortgage will automatically move to a Standard Variable Rate.  If you choose a variable rate mortgage, the rate you pay could move up or down in line with the Bank of England base rate.

6. Hints and Tips

Manage any credit you may have carefully to help demonstrate you can afford a mortgage and make payments on time.

There are many things you can do to improve your credit rating such as registering to vote.  Take a look at credit reference agency websites such as or for further ways to enhance your credit rating.

Prepare for your mortgage interview by writing your own budget, setting out all your regular expenditure and commitments to estimate how much you would have left each month for a mortgage.  Include a test in your budget to see if you could afford a rise in interest rates.  This would really impress a lender!

Check the flexibility in a mortgage to see if you can overpay or take payment holidays. Make sure your mortgage is portable otherwise you will incur fees if you move house before the agreed term ends.

Get your paperwork together

To help your adviser prepare your Decision in Principle, most lenders will require the following information:

  • Address history – details of your residential address for at least the last 5 years.
  • If employed, your last 3 months payslips – details of your earnings and any deductions made from your salary.
  • If self employed, your last 3 years accounts – details of your net profits and/or salary and dividends.
  • Details of any other income – such as pension income, rental income etc that you may receive.
  • Your last 3 months bank statements – we will ask for details of your regular outgoings/expenditure.
  • Details of your financial commitments – any loans, credit cards or other financial commitments you may have.
  • Protection policies – details of any income protection and life policies.

Next Steps

Once you have your Decision in Principle you are then in a strong position to make an offer on the property you wish to buy.

When your offer has been accepted you’ll need to revisit your mortgage adviser to go through the final part of applying for your mortgage.

You will need to get a survey carried out on the property you are purchasing and your lender will require a valuation.

You also need to ensure you have buildings and contents insurance in place.

Your lender will give you a mortgage offer and you will then be in a position to exchange contracts and agree a completion date.  The deposit your solicitor is holding for you will then be transferred to the seller’s solicitor ready for completion.  This means you’re now legally bound to buy your new home.

On completion day your solicitor will deal with the final legal work and will call you when this is complete and you can collect the keys to your new home.

How Mortgage Advice Bureau can help
When you’re ready to apply for your mortgage, you can easily get in touch with MAB to arrange an appointment with one of their mortgage advisors.

Whether face to face or over the phone, MAB can offer the same expert advice and will be there to talk you through the whole mortgage process, from beginning to end. They’ll explain each stage of the application, making sure you understand what documentation we need from you.

Their advisors are able to access mortgages that you wouldn’t necessarily find when searching the market yourself. MAB have regular contact with a wide range of lenders, some of whom you may not even know exist. Having access to thousands of lenders will ultimately save you time, as you won’t have to search or contact each individual lender to compare the mortgage terms and rates; MAB will do all that for you.

MAB’s Promise to You
Explaining the fees – They’ll explain all the different fees involved, what they’re for, and take them all into account when finding the right mortgage for you.

Knowledge – MAB’s knowledge of different lenders’ criteria can be invaluable. Together, they will go through your expenditure which will be beneficial to you when completing your mortgage application.

Duty of care – MAB have a duty of care to you. They take your individual circumstances into account and understand that one size doesn’t fit all. It’s vital that you and your advisor have honest and thorough conversations in the run up to finding and applying for a mortgage.

Experience – Getting a mortgage can seem like one of the most daunting tasks, but it doesn’t need to be. The important thing to remember is that every lender is different in what they view as the ‘perfect candidate’ to lend to. So even if you don’t fit one lender’s criteria, it doesn’t mean you won’t fit another’s. Having an expert on your side will ensure your application goes to the right lender for your individual needs.

Protection – Not only will MAB help find the right mortgage for you, they’ll also help make sure that your home, and the people in it, are protected. Whether this means critical illness cover, life insurance or income protection, their protection advisors will be more than happy to talk through the terms and conditions of different policies with you.

Search for your next mortgage with Mortgage Advice Bureau

To book an appointment please call 01664 494100 or take a look at our Mortgage Advice Bureau website where you can also see the latest deals, access mortgage calculators, meet the team, get expert advice and much more.

Following the Bank of England Base Rate increases, our Standard Variable Rate is due to increase from 4.99% to 5.39% with effect from 1st June 2022.

Please also bear with us as our telephone lines will be busier as we help our customers