These savings can be put towards your deposit. The bigger your deposit, the better mortgage rates you may get.
Now to find the best mortgage you can get. Do this before you go house-hunting.
If you're wondering, 'Can I get a mortgage?' then begin with our Mortgage Checklist. This online tool helps you check the strength of your mortgage application and improve it.
Also do all you can to improve your credit score – this can save you thousands in the long term. When you apply for a mortgage, the lender will run a credit check on you to decide how much you can afford to borrow.
Now search for an independent mortgage adviser. Your adviser can research the whole of the market to find the best mortgages in terms of affordability and suitability. Having a mortgage adviser greatly increases your chances of your application being accepted first time, and can also save you a great deal of money over the long term.
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Read up on the different types of mortgages to start thinking about which mortgage is right for you.
You may be able to get a 'mortgage in principle' certificate from a lender before your mortgage is formally approved. This can reassure estate agents that you can afford a particular property.
If you find it hard to get an ordinary mortgage, you may still be offered a guarantor mortgage if you have parents or other family who are willing to help you out. With this kind of mortgage, the guarantors (e.g. your parents) agree to cover your mortgage repayments if you cannot.
If a lender won’t offer you a large enough mortgage to buy a whole property, another option is shared ownership. This is where you purchase a portion of the home and pay rent on the rest. Find out more about shared ownership.
Another way to make your mortgage affordable is through the Help-to-Buy scheme, where an equity loan covers a portion of the cost of your home. Find out more about Help-to-Buy.
The government First Homes scheme is a policy that will provide discounted homes to first-time buyers in England who otherwise wouldn’t be able to afford one. More specifically, under this scheme, first-time buyers will be able to purchase a new-build home in their community at a discount of 30% on the market price. For an average new-build property in England, this will equate to a saving of around £100,000.
It's even possible to buy a property in a group of up to four friends. Find out more about buying as tenants in common.
Once you know how much you can borrow, you can search for homes in your price range.
Aim for the best you can afford, but give yourself a safety margin. Your adviser can show you how interest rate rises will increase your mortgage repayments, to help you work out what you can afford.
Be persistent – you may have to view a lot of properties before you have an offer accepted.
An alternative to house-hunting is to build your own home, though only if you are confident with managing a major project.
When your offer is accepted, the buying process – known as conveyancing – can begin. For this, you'll need a solicitor. You may need to see them in person several times and hand over important documents, so being local is a big advantage.
Your solicitor’s job is to ensure that your purchase is fully legal and that there are no nasty surprises for you – such as finding the property is on a short lease, or that the garden really belongs to next-door.
A good solicitor can make all the difference in the hectic final weeks of a home purchase.
It is advisable to hire your own chartered surveyor to report on your home before you exchange contracts.
For newer properties, a RICS HomeBuyer’s report should be sufficient if you have no immediate plans for major building work.
However, if the property is over 30 years old, unusual or in apparently poor condition, you should arrange a RICS Building Survey (often called a ‘full structural survey’). Likewise, if you plan to carry out an extension or conversion, you should choose this more detailed survey. A Building Survey can cost between £500 and £2,000 depending on the size of the home.
Sometimes a survey will turn up problems that are not deal-breakers, but which will incur unforeseen costs for you. In such cases, it may be worth trying to renegotiate with the vendors to see if they will lower the price by a suitable amount. Be reasonable and realistic, and remember that they are under no obligation to do so.
You may not need to pay any stamp duty, as you don't pay any on the first £300,000 provided the property is selling for £500,000 or less.
After that, stamp duty is charged in bands, as shown in this table:
£300,001 - £925,000
£925,001 - £1.5 million
If the property sells for over £500,000, follow the stamp duty rules for non-first time buyers.
Use this stamp duty calculator to find out how much yours might be.
In Wales and Scotland the rules are different. In Wales the tax is called Land Transition Tax (LTT) and in Scotland it's called Land and Buildings Transition Tax (LBTT). Use these calculators instead:
The final stage of buying your home is a two-step process.
Step one is the exchange of contracts (which your solicitor will handle). Once contracts are exchanged, you are legally obliged to proceed with your house purchase. If you have to pull out at this stage (e.g. due to job loss or bereavement), you will have to pay significant costs.
At this stage your seller will need you to pay an initial deposit - usually 10 per cent of the value of the property. However, this amount can sometimes be negotiated - particularly if you are using a Help-to-Buy ISA (which does not pay its bonus until completion).
The final step is the completion day (typically a week after exchange).
Your lender transfers your mortgage money to your solicitor, who transfers it to the vendors via their solicitor. Once the money has arrived, the estate agent release the keys to your new home, and you can move in!
Buildings insurance is a policy that pays out if your home is destroyed (e.g. by fire). Your lender will insist that you have it, but you can buy it from a different provider if you wish. Ensure that your cover begins on the day you exchange contracts.
Life insurance is not compulsory, but is usually essential anyway. It means that your mortgage will be paid off in full should one of the mortgage holders die, so your family can stay in their home.
The moving process may involve additional expenses, such as removal costs and a fee to cover the money transfer.
Most homes (unless brand-new) will require some refurbishment and redecoration after you move in, so try to keep some cash in reserve to cover these extra costs.
Don't forget to update your address with all the relevant bodies, especially your bank(s), the DVLA (if you drive) and any pension schemes you hold.
Now you can settle in and enjoy your new home!