7 Mortgage Tips for First Time Buyers 2021

Buying your first home can feel daunting. These seven tips cover the groundwork that makes an application run smoothly — and the decisions worth thinking about well before you apply.

Tip 1: Save up for a larger deposit

To buy a house you need a deposit, usually 5% to 10% of the price. The larger the deposit, the lower your loan to value (LTV) — and the wider the range of products likely to be available.

For example, buying a £100,000 property with a £10,000 deposit means a 90% LTV mortgage. Put down more and your LTV falls. Gifted deposits from immediate family are usually accepted. Read our deposit guide for more.

Tip 2: Make sure you have a good credit score

Your credit score matters for any borrowing, and especially for a mortgage secured on your home. Paying credit card bills on time, repaying loans and registering on the electoral roll all help.

You can check your file with our free credit check. If it isn't where you'd like it to be, our guide to adverse credit explains your options.

Tip 3: Reduce your debts

Lenders are more cautious where an applicant carries substantial debt, particularly payday loans or heavily used credit cards. Paying down what you can before you apply strengthens your position and improves affordability.

Tip 4: Try to stay in the same job

Lenders want to see a steady source of income across the mortgage term, and you'll need to provide proof of income. Some lenders will consider a recently started role, but many prefer a track record of employment.

If you're thinking about changing jobs, or you've been given notice, tell your adviser before any application is submitted.

Tip 5: Consider a joint mortgage

Buying alone can be costly. Buying with a partner, family member or friend means a combined deposit and combined income, which can increase how much you can borrow.

Take legal advice with the person you're buying with. Agree in advance what happens if one of you wants to sell, and what share each of you is contributing.

Tip 6: Consider a guarantor mortgage

A guarantor mortgage involves a parent or close family member agreeing to cover any missed payments. That reassurance can make a lender more comfortable with your application.

Your guarantor will normally need to own their home and be financially stable. It is a serious, long-term commitment for them, so both of you should take advice first.

Tip 7: Government schemes

When this article was first published, the Help to Buy equity loan scheme was open to first-time buyers with a 5% deposit. That scheme has since closed to new applicants.

Other support may still be available depending on where you're buying and your circumstances — shared ownership, Lifetime ISAs and 95% mortgages among them. Our advisers can tell you what you're likely to qualify for today.

Buying your first home is a big step, but you don't have to work it out alone. Speak to an adviser for tailored advice, or start with our mortgage calculators.