The First-Time Buyer’s Guide to Getting a Mortgage


Buying and moving into your first home is an exciting time, but it can also be an incredibly nerve-wracking experience too. Ensuring that you have as much as possible in place ahead of time could save you a real headache. Having a secure mortgage agreement in place will go a long way in ensuring your offer on a new home is accepted. Here’s what you need to know.

How Much Can You Borrow?

Before you fall in love with your dream home, it’s a good idea to work out your budget. Generally speaking, mortgage lenders will calculate the amount you can borrow based on a multiple of your salary. This generally caps at around four-and-a-half times your annual salary. For instance, if you earned £26,500 a year, you could expect to borrow between £86,100 to £119,000. Over twenty-five years, £119,000 at a 3% interest rate would cost you £566 per month. 

Improving Your Credit Rating

Another aspect that will play a big role is your credit rating. If your score is poor, your options will be limited. In the UK, there are three main companies who will score you on how well you manage your credit and make payments: Experian, Equifax, and Callcredit. You may find that it’s worth getting a copy of your credit report from all three of these agencies if you haven’t applied for one before, or if your current details are out-of-date, as different agencies often get their information from different lenders. Regularly reviewing your rating as well as ensuring that you don’t miss any future payments is crucial to managing your credit report.

What to Look Out For

Finally, with so many mortgage lenders out there, there’s a big incentive among rival firms to try and lure new customers in. One of the ways they try to do this is by offering specific deals to first-time buyers. This might include direct cashback or a contribution towards any legal fees you may be required to pay. While this may seem like a good deal, always remember to take into account the entire cost of the package before you commit to any deal. In the long-term, it may prove more economical to choose a lender who requires a minimal up front deposit and a long-term fixed interest rate over any short-term gains. This is why it can be good to have a chat with an online fees free mortgage broker like Habito* before you take the plunge, just to make sure you’re getting the best deal for your circumstances.

You’re on Your Way

Here we’ve mentioned a few basic tips to help you land the right mortgage deal for you and to set you on your way to purchasing your ideal home. As we can see, there are many routes you could go down when looking for a mortgage but if you make use of the tools available and do your research, it doesn’t have to be a scary process. To get the best deals available, you just need to look in the right place and make sure that you keep your credit score healthy. 

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