Getting started...

Am I ready to buy?

Whether you're going it alone, partnered up or with a friend, buying you first home is one of the biggest financial decisions you'll ever make.

If you can tick all the boxes below, you're ready to start house hunting.

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A deposit

Sounds obvious, but usually the bigger your deposit is, the better. If you save a 10% deposit, your mortgage will be 90% of the property's value. This is known as the loan-to-value (LTV).

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Get your outgoings in order

Mortgage providers will want to take a close look at your financial commitments. So from that designer handbag habit to that extra takeaway in the week, there's no hiding your outgoings. If you have any loans or credit cards, your mortgage provider will need to know. 

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Good credit history

When you apply for a mortgage, the lender will check your credit history to make sure you're on top of your finances and can afford the monthly payments.

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My last 3 months' payslips or my last 3 years' accounts

Whether you're employed or self-employed, mortgage providers will want proof of earnings.

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Top tips that could help to boost your credit history

When you apply for a mortgage, the lender will check your credit history to make sure you are on top of your finances and can afford the monthly payments.

Here are some tips that could improve your credit history:

  • Register to vote
  • Cancel unused credit cards or bank accounts
  • Pay off any debts
  • Never miss or be late for any payments

What's my budget?

Now it's time to work out how much you can realistically afford to spend on buying a home.

The deposit you save will usually need to be at least 5-10% of the price of the house you want. But remember, a deposit isn't all you'll need to budget for. You'll also need enough money to cover costs like stamp duty (if its applies), solicitor or conveyancer fees and surveys. All of which can add up.

Use our budget planner to jot down your monthly finances, to get an accurate idea of your budget.

Pleasantly surprised? Or spending way more than you thought? If it's the latter, here are some simple ways to start cutting back. Before buying anything, you could ask yourself these five questions which may help:

  1. Do I need it?
    Do you really need that takeaway coffee, glossy mag, or new pair of jeans?
  2. Will I use it?
    Are you using your gym membership or just kidding yourself?
  3. Is it worth it?
    Is it really worth slowing down your saving potential for those new boots?
  4. Is it cheaper elsewhere?
    Have you shopped around? You might be able to pick up that item for much less.
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Top budgeting tips

Plan your weekly meals
You could arm yourself with a weekly (or even monthly) meal plan before setting foot in the supermarket. You'll save money by only buying the ingredients you need and be better at resisting that takeaway temptation.

Open a savings account
You could set up a standing order, so that each payday some of your money will be transferred to a savings account. That way you won't be tempted to overspend.

Costs

Buying a home costs

Here's a rundown of all those costs, from the up=front to the hidden.

A deposit

Sounds obvious, but usually the bigger your deposit is, the better. If you save a 10% deposit, your mortgage will be 90% of the property's value. This is known as the loan-to-value (LTV).

Up-front costs

Stamp duty
This is a government tax that you have to pay if the purchase price is above a certain figure. For more information visit www.gov.uk.

Valuation/Surveyors fee
The cost of undertaking a property valuation or survey.

Legal fees
You will need to pay fees to your solicitor or conveyancer, which usually includes the cost of any land registration fees and search fees.

Removal costs
How much you pay for moving depends on how far you're moving, how much stuff you have, if you pack it yourself or pay a removal company to do it for you. You could hire a van and do it all yourself, or pay a professional removal firm. It's a good idea to book early and shop around to get a good quote.

Electronic transfer fee
This covers your mortgage provider's cost of transferring the mortgage money to the solicitor.

Product fees
Some mortgage may include a product fee. You may be able to pay a product fee by cheque or 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.

Costs at home

Insurance
For any mortgage you take out, you'll have to have buildings insurance. If your new home is leasehold and you pay a management or maintenance fee, check to see if you're already covered.

Furnishings
Don't forget you might need to buy furnishings for your new home. Beds, sofa, fridge/freezer, the list goes on so be sure to include these costs in your budget.

Council Tax 

The amount you pay in Council Tax is based on the valuation band your property falls under, it's location and whether or not you're entitles to a discount. 

Utilities

Don't forget the costs for your electric, gas, water, broadband, landline and TV license. Looking on price comparison websites can be helpful. 

Costs to keep in mind

Early repayment charges
An Early Repayment Charge (ERC) may be payable if you choose to either repay your mortgage (in full or in part), or switch your mortgage to another provider before your current mortgage deal has come to an end.

Discharge Fees
A discharge fee (otherwise known as a mortgage exit fee) may be charged when you come to the end of the mortgage term, or pay your mortgage off in full or transfer your loan to another property.