How To Navigate A Mortgage As A First-Time Buyer

Mortgages can feel a bit of a complex process, especially for those who are first-time buyers. There’s a lot of paperwork to fill out, legal jargon to understand, etc. When you have no idea how the process works, it’s easy to fall into the trap of finding a mortgage that doesn’t fit your needs and wants.

With that being said, navigating a mortgage as a first-time buyer requires securing at least a deposit, a boost to your credit score and obtaining a mortgage agreement in principle before you go house hunting.

This guide will hopefully help you to understand the complexities of taking out a mortgage for the first time.

Prepare your finances

First and foremost, be sure to prepare your finances. Saving for a deposit is the first step, so aim for around 5% to 10% of the property value you’re aiming for. You’ll want to fix your credit score if it’s not looking too good as of now.

The higher your score is, the better access you get to a wealth of mortgage products and lenders.

You’ll want to organize your documents, making sure all of your financials are ready for proof of deposit, payslip evidence and any tax returns where you’re self-employed or earning extra income on the side.

Determining your budget is key too, so factor in the costs when it comes to the deposit, but also legal fees, searches, etc.

Get an Agreement in Principle

An agreement in principle is essential to have in place before you go shopping for homes. It’s a document that shows sellers you are a serious buyer and confirms what the lender is likely to offer in terms of a mortgage.

This is important so that you’re not wasting your time or anyone whose homes you’re looking to view. There’s nothing more frustrating than having to show your home to those who aren’t even past the point of getting an AIP.

Select the right mortgage

Now it’s time to find the right mortgage for you and your family’s needs. Using a broker is a good way to get a good look at the entirety of the market beyond just a few of the well-known banks or lenders.

Independent mortgage advisors will also be able to access exclusive, first-time buyer products. Make sure to compare the deals you have on offer, especially when it comes to mortgage rates, product fees and early repayment charges.

Look for deals that offer cashback or free valuations where possible, too.

Apply for the mortgage

Next, you’ll want to apply for the mortgage. Once you’ve found a home and the offer has been accepted, you’ll then formally apply for the mortgage with the selected lender and often through the mortgage broker.

This lender will conduct what is a professional valuation of the property in order to confirm if it’s worth the loan amount.