First Time Buyer Mortgage: A Step-by-Step Guide to Buying Your First Home

Doing things in the right order avoids wasted fees and disappointment. Here is the usual sequence.

Some of the terms, and who does what, differ by nation, particularly in Scotland. The steps below say where they differ.

1. Check your finances. Work out your income, regular outgoings, savings and any debts. Check your credit report so you know what a lender will see.
2. Speak to a mortgage adviser. An adviser looks at your income, deposit and goals. They explain the types of mortgage, the costs and the risks, and tell you what a lender will ask for. You can request a callback to be introduced to a mortgage adviser.
3. Get an agreement in principle and set your budget. Ask for an agreement in principle (sometimes called a decision in principle). This is a lender's initial indication of what it might lend you. It is not a guarantee, and it is not a full approval. Ask whether the check is a soft or hard credit search before you request it. A soft search is not visible to other lenders. A hard search is recorded on your credit file, and several in a short period can count against you. Use the figure to set a realistic budget for your search.
4. Appoint a conveyancer or solicitor. This person handles the legal work of buying. Do this before you make an offer, so they are ready to act. In Scotland, your solicitor makes the offer on your behalf.
5. Search for a property and make an offer. Stay within the budget you have set. An accepted offer is not legally binding on either side until contracts are exchanged (England, Wales and Northern Ireland) or missives are concluded (Scotland), so the sale can still fall through before then.
6. Make your full mortgage application. You provide documents and the lender checks your details. It will also arrange a valuation of the property. Your adviser can help with this; see "Prepare your full mortgage application" below.
7. Arrange a survey. A valuation is for the lender. A survey is for you, and it can reveal problems with the building. In England, Wales and Northern Ireland, you usually arrange this yourself. In Scotland, the seller must provide a Home Report, which includes a survey; your adviser or solicitor can tell you whether you need anything further.
8. Receive your mortgage offer. Read it carefully, including the rate, the fees and any early repayment charges (fees for paying off or leaving the mortgage before an agreed date).
9. Exchange contracts and complete. In England, Wales and Northern Ireland, contracts are exchanged. This is the point at which you and the seller are legally committed, and you usually pay a deposit to the seller's solicitor. The amount is agreed as part of the sale and can differ from your mortgage deposit. The balance is paid on completion, and on completion day you get the keys. In Scotland, the equivalent of exchange is the conclusion of missives, and completion is called settlement, on the date of entry. Your solicitor guides you through it.

Lenders want to see that you can afford the repayments now and could still afford them if interest rates rose. They usually look at your income, your regular spending, your debts, your credit history and the size of your deposit.

Your deposit is the part of the price you pay from your own money. The mortgage covers the rest. A larger deposit means you borrow less, and lenders usually offer a wider choice of mortgages and lower rates to buyers with a bigger deposit.

The tools on this site can help you estimate affordability before you speak to anyone. They give a general guide only.

Mortgages differ in how the interest rate works. Each type has benefits and drawbacks. The right choice depends on your circumstances.

• Fixed rate. The rate stays the same for an agreed period, so payments are predictable. However, if you leave early, you may pay an early repayment charge. When the fixed period ends, your rate may change.
• Tracker rate. The rate follows another rate, such as the Bank of England base rate. Your payments can fall, but they can also rise.
• Standard variable rate. This is the lender's own rate. The lender can change it at any time.

You can repay the loan in two main ways. With a repayment mortgage, you pay off interest and the loan itself. With an interest-only mortgage, you pay only interest and must have a separate plan to repay the loan at the end.

Look at the whole cost, not just the rate. Mortgages can come with arrangement fees, valuation fees and other charges. Beyond the mortgage, plan for legal fees, a survey, removal costs and property purchase tax.

The property purchase tax depends on where you buy. It is Stamp Duty Land Tax in England and Northern Ireland, Land and Buildings Transaction Tax in Scotland, and Land Transaction Tax in Wales. Rules, reliefs and thresholds for first-time buyers differ and can change, so check the current position for your nation. Schemes to help first-time buyers also vary by nation, so ask an adviser what applies where you live.

For information on rates, see the rates page. For an overview of mortgage types, see the mortgages section.

Once you have an offer accepted, you move to the full application. Lenders usually ask for proof of identity, proof of address, payslips or other proof of income, and bank statements. If you are self-employed, expect to be asked for more evidence of your earnings.

A mortgage adviser can help you prepare the application and gather your documents.

Give accurate, complete answers. The lender will compare your application against the documents you supply. Any mismatch can cause delays.

Do not stop being careful after you apply. Until you complete, the lender may check your circumstances again.

Your home may be repossessed if you do not keep up repayments on your mortgage.

This article is general information only and is not personal advice. Your circumstances, the lender you choose and the product you take will affect what is right for you, so speak to a qualified mortgage adviser before making a decision.

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