Your first-time-buyer checklist – everything you need to know

Buying your first home is a minefield. You need to navigate a whole new process you’ve never gone through before, all while grappling with lots of confusing jargon. But fear not – we’re here to help. Here’s everything you need to know before you buy your first home.

Deposit

Clearly your first task is to work out how much you need to save as a deposit. To get started, research house prices in the area you want to buy, then work out what percentage deposit you want.

The larger your deposit, the better mortgage interest rate you’ll get. Someone with a 5% deposit (and so a 95% mortgage) will usually pay a higher rate than someone with a 20% deposit, and 80% mortgage.

Saving a big enough deposit can feel daunting, but did you know you can give yourself a hefty 25% boost with a Lifetime ISA? To learn more, check out our article on whether a Lifetime ISA is right for you.

Fees, fees, fees

When buying a home, there are lots of charges and fees you need to think about. The biggest one is stamp duty.

Stamp duty is charged at different rates, depending on the value of your property. On homes worth up to £125,000 you’ll pay nothing, on the next £125,000 you’ll pay 2%, on the next £675,000 you’ll pay 5%, and the next £575,000 (i.e. property values worth £925,001 to £1.5m) you’ll pay 10%. Above that it’s 12%.

If you’re a first-time buyer, you’ll get a stamp duty discount if you buy a home worth £500,000 or less. On the first £300,000 you’ll pay no stamp duty, and then up to £500,000 you’ll pay 5%. But you won’t qualify for the discount if you buy a home worth more than £500,000.

Another important cost to think about is mortgage fees: usually, you’ll pay an arrangement fee and a valuation fee. Then there’s the solicitor’s costs – for doing all the legal work on the purchase – as well as survey and searches fees.

All of these fees vary depending on who you pick to do the work and what options you go for. For example, with a survey you could get the cheapest minimum one or a full belt-and-braces option that will cost much more.

Your final cost will be the movers’ fees, unless you decide to do it yourself.

Picking your professionals

You’ll need some experts to help buy a home, and the main one is your solicitor. They’ll coordinate with the sellers’ solicitors and do all the legal paperwork, checking there are no red flags with the property, resolving any issues, and paying the stamp duty bill at the end.

Your solicitors will be your main port of call throughout the process, so you want someone good. Recommendations from friends and family are always a good shout, and as everything is done via email these days, your solicitors don’t necessarily need to live in your area. Get quotes from a few to compare prices, and check out reviews online.

The next expert you’ll need is a mortgage broker, if you decide to use one. You can pay for a broker, or you can hire a free one that works on commission paid by the lender. Again, personal recommendations and online reviews are your friend.

You could opt for an entirely online broker, such as Trussle, or a more traditional broker, such as L&C or one from a financial advice firm. Often the estate agent you’re buying from will tout their own brokers or solicitors – but it's generally better to pick someone independent.

Finally, you’ll want a surveyor. You can decide on the level of survey depending on the age of the house and how much security you want about spotting potential future problems. Costs vary from around £500–£700 for a basic survey, up to £800–£1,100 for a more comprehensive one.

Mortgage options

The mortgage world is full of confusing words and seemingly random jargon that you’ll probably have never come across before, from ‘loan-to-value’ to ‘standard variable rate’. 

Feeling befuddled? You can hear us explain some of the more common mortgage terms in a recent episode of the Money Matters podcast.