Buying your first home can be both an exciting and slightly daunting process. There are many different stages when it comes to property buying, we have compiled the guide below to help make the mortgage preparation process easier,

Who is a first-time buyer?

A first-time buyers is anyone purchasing their first property. This person has not hitherto owned in a freehold or leasehold capacity a residential property in the UK or abroad.

The information mortgage lenders consider for first-time buyers

It is essential that you know before applying the criteria mortgage lenders will be assessing you against determine whether to accept or decline your application. Typical eligibility criteria considered by a lender includes the following:

  • Credit score
  • Salary
  • Current employment status
  • Their own mortgage policy rules
  • Monthly outgoings
  • Savings
  • Mortgage amount
  • Deposit size required

Saving for a deposit

As previously mentioned, one of the main things mortgage lenders consider is how much you have already saved for the deposit.

The more you have saved, the greater the range of mortgages you have to choose from, and at lower interest rates.

How much do I need to save?

Generally speaking, it is recommended to save at least 5% to 20% for a deposit on a home.

What other costs do I need to consider as a first-time buyer?

It isn’t just the deposit that you need to factor in as a first-time buyer. There are other costs that you have to consider,  such as:

  • Stamp duty: remember that first-time buyers are exempt from paying Stamp Duty on the first £300,000 and up to the value of £500,000
  • Surveying costs
  • Removal costs
  • Buildings insurance
  • Valuation fees
  • Arrangement fees
  • Furnishing costs
  • Decorating costs
  • Solicitor’s fees

Are there home-buyer schemes?

Yes, there are a number of government backed-schemes aimed at helping people across the country to get onto the property ladder.

The main three are:

Preparing for your application

Checking your credit report

Checking your credit report is an important step to take when preparing for a mortgage application as a first-time buyer. We recommend that you check your credit file with all three credit reference agencies in the UK, these are Callcredit, Experian and Equifax as you can assess your average score because they all take into account slightly different criteria.

You can also verify that you do not have any inaccurate or out-of-date information on your file. This could affect your chances of being accepted for a mortgage. If you do find any, address these quickly by contacting the lender in question.

Spend time researching mortgages

There are a number of different mortgages products available on the market, therefore thoroughly research to see which will best suit your circumstances as a first-time buyer. You can do this by going online and looking at comparison websites. You could also speak to your broker or mortgage adviser who can provide guidance.

Look at your spending habits

Going through your spending habits over the last four months in order to see what exactly you are spending is definitely worth doing at least a year prior to making a mortgage application. This will enable you to see if there are ways you can save more.

Whilst addressing your spending habits, you should also try to prioritise putting aside money to settle any outstanding debt you have before applying for a mortgage.

Documents needed for a mortgage application

If you are ready to apply for a mortgage as a first-time buyer, the following documents you will need for the application are:

  • Current account bank statements for at least the last 3 months
  • P60 form from your employer
  • Passport or driving licence
  • If you are self-employed, a statement of accounts dating at least two years’
  • Your last 3 months’ payslips
  • Utility bills
  • A SA302 tax return form if you are self-employed, or receive earnings from more than one source
  • It is also common to be asked to provide council tax bills and insurance policy statement