First Time Buyer - FAQs

A first-time buyer is someone who has never owned a residential property anywhere in the world. This includes owning a property outright, with a mortgage or, in some cases, inheriting one. If you’ve never previously owned a home, you may be eligible for first-time buyer mortgage products, government schemes and, depending on the purchase price, Stamp Duty relief.

Most mortgage lenders require a minimum deposit of 5% of the property’s purchase price. For example, if you’re buying a home for £250,000, you’d usually need a minimum deposit of £12,500.

However, saving a larger deposit can give you access to more competitive mortgage rates, potentially reducing your monthly payments and the overall cost of borrowing.

The amount you can borrow depends on several factors, including:

• Your income.
• Your regular financial commitments.
• Your credit history.
• The lender’s affordability assessment.

Many lenders will consider lending around 4.5 to 5 times your annual income, although some may lend more depending on your circumstances.

The best way to find out your borrowing potential is to speak with a mortgage adviser who can assess your options across multiple lenders.

Yes.

Many lenders offer mortgages to buyers with a 5% deposit, although the range of products available may be smaller than if you have a larger deposit.

If you’re buying a new build home, there may also be schemes available that can help reduce your monthly mortgage payments or make buying more affordable.

No.

Having a less-than-perfect credit history doesn’t automatically mean you’ll be declined.

Some lenders are more flexible than others and may consider applications from buyers who have experienced missed payments, defaults or County Court Judgments (CCJs), depending on how recent they were and the circumstances surrounding them.

Seeking advice before applying can help avoid unnecessary credit searches.

An Agreement in Principle (AIP), sometimes called a Decision in Principle (DIP), is an indication from a lender of how much they may be prepared to lend you.

It isn’t a formal mortgage offer, but it can:

• Help you understand your budget.
• Show estate agents and developers you’re a serious buyer.
• Put you in a stronger position when making an offer.

An AIP is usually one of the first steps before viewing properties.

Ideally, you should arrange an Agreement in Principle before you start making offers on properties.

Once your offer has been accepted, your adviser can then submit your full mortgage application to the lender.

Starting early helps avoid delays and gives you confidence when house hunting.

Every purchase is different, but a typical purchase takes between 8 and 16 weeks from having an offer accepted to collecting the keys.

New build purchases can sometimes follow different timescales depending on the build stage.

Exchange of contracts is the point where the purchase becomes legally binding.

At exchange:

• The completion date is agreed.
• Your deposit is transferred.
• Neither party can normally withdraw without financial penalties.

Until exchange, either party can usually walk away from the transaction.

Completion is the day you officially become the owner of your new home.

Your solicitor transfers the remaining purchase funds to the seller’s solicitor, and once received, you’ll be able to collect the keys and move in

As well as your deposit, you should budget for costs such as:

• Solicitor’s fees.
• Property searches.
• Survey costs.
• Mortgage arrangement fees (if applicable).
• Valuation fees (sometimes included).
• Removal costs.
• Stamp Duty (if applicable).

Your adviser can help you understand all the costs involved before you commit to buying.

Many first-time buyers benefit from Stamp Duty relief, although it depends on the property’s purchase price and the rules in force at the time you buy.

Your solicitor will calculate any Stamp Duty due before completion and explain exactly what you’ll need to pay.

Yes.

A solicitor or licensed conveyancer carries out the legal work involved in buying your home.

They’ll:

• Check contracts.
• Carry out searches.
• Handle funds.
• Register your ownership with HM Land Registry.
• Ensure everything is legally completed correctly.

Absolutely.

Many first-time buyers choose new build homes because they offer:

• Modern, energy-efficient designs.
• Lower maintenance costs.
• Warranties for added peace of mind.
• Developer incentives (where available).
• Schemes designed to help buyers onto the property ladder.

Your first mortgage payment is usually collected around one month after completion, although the exact date depends on your lender and the completion date.

Your lender will confirm your payment schedule before your first payment is due.