first time buyers guide and checklist

Deciding to buy a house is one of the biggest decisions you’ll make in your lifetime, mainly due to the fact that it’s likely to be the most expensive thing you will ever buy.

We know how exciting yet stressful buying your first home can be; there is a lot of jargon you need to come to terms with and it is hard to know where to start with the legal arrangements. That is why we’ve put together a first time buyer step-by-step guide and have created a downloadable checklist. Read through the guide and then download our first time buyer checklist to assist you as you go through the process. 

[Download the ‘First time buyers checklist’]

Step 1: Saving a deposit.

The minimum deposit you will need in order to stand any chance of being accepted for a mortgage loan is 5%, which means if you wanted to buy a property that was £220,000 you’d need to save at least £11,000.

Most people choose to save at least 10% of the cost of a home for their deposit. When deciding on how much deposit you need, bear in mind that the bigger the deposit, the more favourable rates you could get.

Saving for a deposit isn’t easy for most people, especially because house prices tend to rise faster than the rate of inflation. That means that it makes sense to try to find a savings plan that gives you a return on your money, so that your savings maintain more of their ‘real’ value.

ISAs are a great way to save for your deposit as you can save up to £15,240 per year tax efficiently, and most will give you a return on you savings in the shape of a bonus or interest, which will help to increase the value. Stocks and shares ISAs have the potential to produce higher returns than cash ISAs over the long-term, as the funds you invest in are linked to the performance of stocks & shares, or other assets such as property. However, when you invest you should remember that your capital is at risk.

If you choose to save within a cash ISA, you can access your money at any time and there is no investment risk to your capital. However, the affects of inflation on low interest rates may  mean that your savings are actually losing their real world value.

One popular way of saving for a deposit is via the Help to Buy ISA. With a Help to Buy ISA, the Government will boost your savings by 25%. So, for every £200 you save, you will receive a government bonus of £50. You can save up to £200 a month in a Help to Buy ISA, and the maximum you can save overall is £12,000. It is important to know that you can no longer open a Help to Buy ISA, but you can still pay into a Help to Buy ISA until November 2029.

Step 2: Affordability: Budget your income and outgoings

There are many other costs you need to consider aside from the deposit. Before meeting with a mortgage adviser, you should think about whether you can meet the upfront costs, monthly fees and living costs. A mortgage adviser will check your affordability, but to get the full picture yourself and to make the meeting run as smoothly as possible, it’s best to be organised and to do a budget beforehand.

You can find a budget planner on our downloadable checklist at the top of this page. Take away your total outgoings from your total income to work out what you’re left with at the end of each month.

Is it going to be tight at the end of each month? Maybe you should reconsider the house prices you are thinking about.

Step 3:  Organise an appointment with a mortgage adviser

A mortgage adviser will help to give you a rough idea of how much you can borrow. They will look at your income and outgoings and help you to see if what you have in mind is affordable.

When you first meet with an adviser, you should take with you the following documents:

  • Proof of ID e.g. your passport or driving licence
  • Proof of current address e.g. council tax or utility bill
  • Last 3 months’ worth of payslips
  • Your most recent P60
  • Details of any credit commitments e.g. credit card statements, student loans etc.

Tip: Using a whole market mortgage adviser to find a lender could help to find you a better deal, as they are not limited to a set panel of providers.

Step 4: Get a mortgage in principle

Once you’re happy with the mortgage proposal, next you need to get a mortgage in principle.  The mortgage lender will run a credit check on you to see if, in principle, they’d lend you the money. This will help you to be more certain of your budget and can give you a more solid figure of what you will be able to borrow.

Having a mortgage in principle could give you an advantage over another buyer when it comes to making an offer.

Mortgages boil down to two basic types – repayment and interest-only. Ask your mortgage broker to talk you through the differences to find out which repayment option is preferred.

Step 5: Find your first home

Now it’s time to start your search for your first home. First you should make a list of things that are important to you and things that you would like, but aren’t necessities. Checklists will help you to refine your search. You should start your search with general property companies such as Rightmove. Rightmove is a great site to get an overview of the properties on the market in the area that you wish to live in. You might also want to register with local estate agents.

During your search, pay attention to the local crime rate. has a tool that lets you go down to street level and see the most recently reported crimes. Also think about the local amenities. Is there a local shop nearby and a good primary school? You might not be planning on having children yet, but it could be on the cards in the near future.

If you can, one of the best things you can do is take a day trip to the area and get a feel for the place. You’ll get a good idea of distances to shops, how busy the area gets, and whether or not the place has a vibe or atmosphere that suits you.

Step 6: Make an offer

Once you’ve found what you feel is the perfect first home, the next step is to submit an offer to the estate agent facilitating the sale, who will pass this on to the current homeowner. In summary, here’s what you need to do:

  1. Ring up the estate agent.
    2. Say you would like to make an offer on the property.
    3. Submit your offer.
    4. If they accept, move on to step 7.
    5. If they decline your offer, go back with a higher offer (if affordable) or begin looking for a new property.

If they accept your offer, the estate agent will send you a written contract with the heading “subject to survey and contract”.  Bear in mind, nothing is set in stone yet – either party can still pull out of the deal if they wish to.

Step 7: Formally apply for a mortgage

Next, you should formally apply for the mortgage. You should already have an agreement in principle which can speed things up.

Once you’ve formally applied for your mortgage, your mortgage lender will send out a surveyor to do a valuation of the property in order to figure out its value. This minimises the risk to the lender in case they have to repossess the property, ensuring that it’s not worth less than they thought which protects them from financial loss.

The valuation should also highlight any obvious problems with the house. Bear in mind that a valuation is not a proper survey – it’s purely to figure out how much the house is really worth. If you want a more comprehensive report, you’ll need an independent survey.

Step 8: The legal transfer

After you’ve submitted your mortgage application, there’s a period of time where a few legal agreements need to be made for the legal transfer of the property by your solicitor.

All licenced solicitors are qualified for conveyancing, but they’ll have varying levels of experience with property law.

Typically, conveyancing involves:

  • Acting as an intermediary between you, the mortgage lender and the seller.
  • Reviewing any contracts that pass between you.
  • Dealing with the Land Registry.
  • Sorting out stamp duty.
  • Transferring money during a sale.
  • Checking for structural risks such as subsidence.

What is stamp duty?

Stamp duty land tax is a lump-sum tax that anyone buying a property or land costing more than a set amount has to pay. The rate you’ll pay the tax at varies based on the price and the type of the property.

If you’re a first-time-buyer in England or Northern Ireland, you will pay no Stamp Duty on properties worth up to £250,000. This means if you are a first-time-buyer, you will save up to £5,000. For properties costing up to £500,000, you will pay no Stamp Duty on the first £250,000. You will pay Stamp Duty on the remaining amount, up to £250,000.

If all goes well with the conveyancing, the mortgage lender will have approved the mortgage, the solicitor will have made all appropriate arrangements and the seller is ready to pass over the deed.

Once your mortgage has been issued and you’ve made all the appropriate arrangements. You sign the contract saying that you’ll become the legal owner of the house. The seller signs their own copy and passes it to their solicitor. The solicitors swap contracts, then you and the seller then sign again. This process usually takes a few weeks.

Step 9: Arrange an exchange date.

All that is left to do at this point is to arrange a completion date and make all the appropriate arrangements for moving day. This includes buying the items you need for your home (e.g. beds, sofas, TVs, kitchen utensils) arranging a moving van, and letting the appropriate people know your change of address etc.

If you’re unsure of how much it’s going to cost to furnish your new home then check out our comprehensive guide that can help you by giving you tips on how to make your money go further. 

Step 10: Move into your first home!

Congratulations! You’ve reached move in day.

Once you’ve moved in, make sure you keep an excel sheet that states all of your monthly income and outgoings to ensure you manage your finances appropriately.