First-time buyer's guide

Planning to buy your first home

It’s been said that ‘failing to plan, is planning to fail’ - so whether you’re thinking about buying your own home in a few months or a few years, it’s a good idea to start planning ahead. You’ll feel as if you’re making progress towards your goals – and you’ll be able to show lenders that you are prepared, which will make it easier for you to get a mortgage.

A mortgage is a big commitment, so it’s important to make sure that your finances are in good order. Unless you’ve already sorted out your home-buying fund, this means that you will need to start saving, cut down any borrowing and make sure your credit record is as good as possible.

Start saving

You will usually need a solid savings balance for the deposit – about 10% or more of the amount that the property costs, plus enough to cover other initial expenses, which could be several thousand pounds.

Tips

You will need to work out how much you need to save to cover the deposit and costs. One of our mortgage experts
can help you to work this out. Then set yourself a time goal.
Set up a regular payment into your savings account by standing order to help you keep on track. This will also help to
show mortgage lenders that you can make regular payments over a set time.
Make sure you are getting a good interest rate on your money.

Cut your borrowing

Most lenders take your outgoings, as well as your income, into account when working out how much you can borrow. Reducing your outgoings will give you more to spend on your home. And, as you pay off any borrowing, it will become easier for you to save. Get an idea of 'how much will I be able to borrow?' with our borrowing calculator.

Polish up your credit record

When you apply for a mortgage, lenders look at your credit history to help decide how much money to lend you. Different lenders look at different things, but in general it will help if you:

• Are on the electoral register
• Are in steady employment, or have kept accurate records of your income and tax
• Have a history of using credit sensibly – for example, you should pay off more than the minimum
• Have a balance on your credit cards each month and make sure you don’t miss any payments
• Have kept copies of your past six months’ bank statements and past three months’ salary slips

Tips

Make sure you keep up with your rent payments and keep a record of them. This will show your mortgage lender that
you are used to making monthly payments and may help you get the mortgage you want
It’s worth staying on good terms with your landlord as the mortgage company may ask them for a reference