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First time buyer guide

Arranging a mortgage can seem daunting, but it doesn’t need to be. We show you how in our step by step guide. Buying your first home needn't be complicated. We answer your questions in our helpful first time buyers guide.

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Where do I start with house hunting?

• Before you start house hunting, it’s a good idea to make a list of what’s essential to you. This will help you and your estate agent narrow down the search and it will save you time.

• Look at as many properties as possible to compare prices.

• It’s always a good idea to have a second viewing at a different time on another day.

How much can I borrow?

The amount you can borrow will depend on your individual circumstances, monthly income and monthly outgoings.

It will also depend on the value or purchase price of the property you want to mortgage, in relation to the amount you want to borrow. This is called the loan to value (LTV) and is shown as a percentage.

Our quick and easy mortgage calculator will help you work out how much you could borrow. It will also tell you what your monthly repayments would be for each mortgage product.

How much deposit will I need?

Most mortgages will need you to put down a minimum of 15 – 25% of the property’s value as a deposit.  Some mortgages allow you to apply with as little as a 5% deposit and Government backed schemes to help first time buyers get on the property ladder.

Principality has a range of mortgages for first time buyers, with varying deposit amounts and rates. We’ve also got great savings products to help you save up for your deposit.

How do I choose my mortgage provider?

Buying a mortgage is one of life’s biggest purchases, so it’s obviously important that you choose a reputable mortgage provider.

Why choose Principality?

  • We are the 6th largest building society in the UK
  • We’ve been in business for over 150 years
  • We have over 60 branches and agency counters across Wales and the Borders
  • We have over 500,000 customers
  • And, we are here to help ensure buying your first home goes as smoothly as possible!

How do I choose the right mortgage?

 There are a lot of different sorts of mortgages available, but choosing your mortgage needn’t be daunting. Our Types of Mortgages Guide can tell you about some of the options available, so you can decide which might suit you best.

Speaking to one of Principality's Mortgage Advisers can help find a mortgage that will be suited to your needs.

What’s an agreement in principle and how do I get one?

An agreement in principle tells you the amount a mortgage provider might be prepared to lend you.

You can get an agreement in principle by calling us on 0330 333 4000, or by contacting us or your local branch before you even decide which mortgage might be best for you and without making an application. 

How much should I budget?

Careful budgeting will help you plan ahead and ensure you have enough money for all those costs involved in buying your own home. So it’s a good idea to make yourself a personal budget planner with a list of the expenses you expect to have.

As well as needing to pay a deposit on your new home, the costs you are likely to have to pay include legal fees, surveyor’s fees, mortgage fees, Stamp Duty Land Tax and moving costs.

Our Fee Saver mortgages have no Product fee and no valuation fee.

If you don’t want to choose a Fee Saver mortgage, it’s important to budget for fees:

• Mortgage Commitment Fee

Some mortgage products require a Mortgage Commitment Fee, which is charged when you apply for the mortgage and is not refundable.

• Product fee

Some mortgages require a Product fee, typically £499 or £999. This can usually be added to your total loan amount and repaid over the term of your mortgage.

• Valuation fee

The fee you pay will depend on the valuation or survey you choose and the value of your property. Typically, it can vary from £300 to £1,200. See our step later in this guide on choosing a survey, for more help.

• Legal fee

You will need to pay fees to your solicitor or conveyancer, as well as the cost of any land registration or search fees (these are included in the disbursements). Typically, you should budget around £700.

With the exception of the Mortgage Commitment Fee you can either pay your fees at the start of your mortgage or you can choose to add it to your loan amount. However, if you do add it to your loan, you need to be aware that you will pay interest on the amount for the term of your loan and therefore it will cost you more.

Remember to budget for the Stamp Duty Land Tax you will need to pay. Visit HM Revenue and Customs to see how much is due on your property purchase.

What happens after my offer’s accepted?

Once you’ve found your dream home, and your offer’s accepted, the estate agent will mark the house as ‘Sold – subject to contract’. This is when you should make your mortgage application.

Applying for a Principality mortgage is quick and easy – you can apply by speaking to one of our friendly mortgage advisers on 0330 333 4000 or by visiting your local branch.

We aim to make you a formal mortgage offer within 10 – 15 days of receiving your full application. You’ll receive a copy of our offer by post, with another copy going to your solicitor or conveyancer.

When your offer is accepted, you should instruct a solicitor or licensed conveyancer to handle the legal side of your purchase.

Which survey should I choose?

Buying a property can be expensive, so it’s crucial that you discover all you can about the property before making a legal commitment. Principality Surveyors offer a wide range of valuation and surveying services to help you.

Mortgage Valuation

Your lender will arrange a report for mortgage purposes. This is a limited review of the property carried out to help the lender decide whether or not to lend to you. The cost of your valuation depends on the property value.

Homebuyer Survey

The mortgage valuation is not a survey and it won’t tell you whether the purchase price is reasonable or whether the property needs repairs now or in the future. If it is important to you to have more information, you may want a Homebuyer Survey. This costs more and the report includes a summary of the main positive and negative features of the property, so you can make an informed decision about whether it’s a reasonable buy at the price agreed. It’s most suitable for properties built within the last 120 years.

Building Survey

This is the most comprehensive inspection of a property, and includes photographs. It costs more again and it provides you with a detailed report on the property’s condition and a summary of the main positive and negative features of the property so you can make an informed decision whether it’s a reasonable buy at the price agreed.

Need help deciding which valuation or survey to choose?
This clear, impartial guide to property surveys from RICS (Royal Institute of Chartered Surveyors) may help you.

What insurance cover do I need?

Your mortgage is secured on your home, so you need to be sure that you have home insurance, in case the unexpected happens.

We offer great value insurance products for you to consider.

Home Insurance – both buildings and contents

  • Contents insurance: Covers your possessions.
  • Buildings insurance: Covers the 'bricks & mortar' of your property.

Tailoring your buildings and contents cover to suit your needs gives you greater control in protecting your home and means you could pay less for your home insurance.

If you are borrowing from a mortgage lender, you’ll need to take out adequate buildings insurance because lenders want to protect their investment if the property is damaged or destroyed.

It’s worth getting a quote for your home insurance early to know how much you will need to budget – quotes from Select2Protect are valid for 180 days. Get a quote.

Find out more online, read our insurance guide for more help or contact your branch for friendly, helpful advice.

What happens when I exchange contracts?

• Until contracts are exchanged, both you and the seller can walk away from the sale without any contractual liability.

• Before exchange, both your and your seller’s solicitor or conveyancer will need to be satisfied that their work is complete, that the survey or valuation report has been completed and that the formal mortgage offer has been received.

• Once this has all been done, your solicitor or conveyancer will ask you to sign your copy of the contract and the mortgage deed, if this applies, and they will ask for any deposit to be paid. A completion date for the sale will be agreed and included in the contract.

• Contracts will then be exchanged and the non-refundable deposit will be forwarded to your seller’s representative.

• Final accounts will be prepared showing what needs to be paid.

• You are usually responsible for the property from the point you exchange contracts, so it’s important that you have adequate buildings insurance in place.

What happens on completion?

  • Completion can happen on the same day as the exchange of contracts, or up to several months later, depending on the circumstances of the sale of the property.
  • When you complete, your solicitor or conveyancer will transfer the balance of the purchase monies to the seller.
  • Any Stamp Duty Land Tax due is paid to HM Revenue and Customs.
  • The transfer of ownership and your mortgage details are registered at the Land Registry.
  • Finally, and most importantly, your keys are handed over and you can move in!

What do I need to know about moving in?

Don’t forget to tell people you’ve moved - not just your friends and family, but all those organisations you deal with for your money, car, work and health.

Take electric, gas and water readings when you move in.

Remember to arrange your contents insurance to cover all your treasured possessions in your new home.

What do I do next?

  • Use our mortgage calculator to work out how much you can borrow and what your monthly repayments could be.
  • Take a look at our mortgage products
  • Get an agreement in principle by visiting your local branch, or call us on 0330 333 4000 (between 8am and 8pm weekdays, except Wednesdays 9.30am to 8pm, and 9am to 1pm on Saturdays.

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE

To help us maintain our service and security standards, telephone calls may be monitored or recorded. Your personal details may be used by Principality Building Society to contact you about your application.

Principality Building Society is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority, reference number 155998.