7 tips for first time home buyers


Buying your first home can seem at times like climbing a particularly steep hill – daunting, confusing and with several pitfalls along the way.  Prices are still rising, with the average UK first-time buyer home now costing £184,973, 7% up on that of a year ago1.

And finding the money for a deposit without help from the Bank Of Mum And Dad can be a real challenge – the typical first-time buyer deposit is now £33,222 – that’s 133% of an average salary1. The average first-time buyer borrowed 3.49 times their income, and the average first-time buyer loan was an estimated £136,0001.

But with a few simple steps to prepare yourself financially, and make lenders see you in a positive light, you could approach buying your first home with a lot more confidence.

Show lenders you can manage credit well

Try to make yourself attractive to lenders – they’re not looking for anything out of the ordinary, just evidence that you’ll be a reliable & responsible borrower. They may want to see that you’ve kept up to date with credit payments, the total level of credit that you already have, and how much of that you’re using. So showing lenders that you can manage credit accounts such as credit cards, mobile phone contracts and even some utility services could really help your case.

Choose the right mortgage

Fixed or variable? Repayment or interest-only? The type of mortgage you choose will make a difference to the amount that you repay every month, so you need to think it through carefully.

You can compare mortgages with Experian CreditMatcher. We are a credit broker not a lender, working with selected lenders.†

There are also specific schemes for first-time buyers including shared ownership and the Government’s Help to Buy loan scheme. Mortgages for key workers, such as nurses, are another option. 

Look at affordable home-buying schemes

  •  Shared Ownership. This is where you buy a share of a home – usually a minimum of 25% – and pay rent to a housing association on the rest. So, you need only get a mortgage and have a deposit on the share of the home’s value you’ve bought. In most cases only 5% deposit of the share you’re buying is required as a minimum. You can usually then buy further shares up to the full 100% of its value. There are conditions so make sure you read about it here.
  • Help to Buy ISA.  If you can save up to £200 a month, the government boosts your savings by 25%, up to a maximum of £3,000. Some financial advisers favour the Lifetime ISA, announced on 6 April, which has a higher annual maximum contribution (£4,000) and gives interest from day one, with a bonus of 25% at the end of the tax year. The Help to Buy ISA needs as little as a 5% deposit, with an equity loan or mortgage guarantee.  You can read more about Help to Buy ISA here.

See your credit report before lenders do

Check your Experian Credit Report is fit & ready before applying for a mortgage, as lenders use credit information, along with information on your application form and elsewhere, to make their decision. It also gives you the chance to check the information on your credit report is correct and up to date.

Get your credit report in shape

Simple steps could help, like getting on the electoral roll, not missing any credit payments and not making new credit applications in the six months before you make your mortgage application.

Get budgeting and financial planning

Mortgage affordability rules mean that lenders take into account not only how much you are earning, but how much you are spending. Basically, they want to know you’ll be able to afford your mortgage payments, especially if your financial situation changes – for example if you change your job or have children, or if interest rates go up. So if you can, try to cut back on outgoings you don’t need, clear any overdrafts and try to put a little aside each month.

Put enough cash aside for the extra costs

Don’t forget that as well as saving enough for a deposit, there are other costs such as stamp duty, surveyor’s fees and legal fees. There may well be valuation costs and administrative charges to think about, so try to put enough cash aside for the extra costs.

1. http://themoneycharity.org.uk/media/March-2017-Money-Statistics1.pdf

†Experian acts as a credit broker and not a lender in the provision of its credit cards and personal, car finance and guarantor loans matching services, meaning it will show you products offered by lenders and other brokers.

Experian acts independently and although CreditMatcher shows products for a range of lenders and other brokers it does not cover the whole of the market, meaning other products may be available to you. CreditMatcher services are provided free however we will receive commission payments from lenders or brokers we introduce you to. For information about the commission we receive from brokers for mortgages and secured loans click here.

CreditMatcher is provided by Experian Ltd (Registered number 653331). Experian Ltd is authorised and regulated by the Financial Conduct Authority (firm reference number 738097). Experian Ltd is registered in England and Wales with registered office at The Sir John Peace Building, Experian Way, NG2 Business Park, Nottingham, NG80 1ZZ.

Copyright © 2017, Experian Ltd. All rights reserved

3 thoughts on “7 tips for first time home buyers

  1. LNWeaver

    That’s a good point that you can check your credit with Experian. You can check your credit twice a year. You’re looking for a score that’s 700-800. You can make regular purchases with a credit card to raise your score.

  2. Ashley Turns

    My husband and I are first-time home buyers and we are wondering what kind of tips we should listen to. So we appreciate you telling us that we should be sure to have extra money in preparation for fees like legal and inspection costs. As first-time home buyers, we will be sure to take some of our money and set it aside for those extra fees that may come up.


Leave a Reply

Your email address will not be published. Required fields are marked *

Current day month ye@r *