How to apply for a mortgage as a first-time buyer
Dreaming about owning your first home? Maybe you’ve already picked out how your kitchen will look, or you’ve started a Pinterest board filled with garden inspiration. But before you can make any of that a reality, you need to think about getting a mortgage.
If you’ve never applied for one before, don’t worry. This guide will walk you through the process of applying for a mortgage as a first-time buyer, with some of our top tips to help you feel confident about what’s coming next.
Step one: Save up for your deposit
Before you start booking viewings, you’ll need to get your deposit together. Most lenders ask for at least 5% of the property price, but if you can save 10% or more, you’ll unlock better mortgage deals, lower interest rates and cheaper monthly payments.
Saving can feel like the longest part of the process, but making small changes to your day-to-day spending habits can make a real difference. We recommend setting up a direct debit into a separate savings account, skipping the occasional weekend takeaway, or opening a Lifetime ISA (where the government adds a 25% bonus to your savings, up to a maximum of £1,000 per year) to help you build a deposit faster.
Step two: Boost your credit score
Your credit score is your money reputation, and most lenders will want to see that you’ve been sensible. Simple things like making sure you’re registered to vote at your current address, paying bills on time, and avoiding credit card splurges can make a real difference.
Step three: Get a Mortgage in Principle
A Mortgage, Decision or Agreement, in Principle is a statement from a bank or building society estimating how much they could lend you. It’s not legally binding, but it’s a great way to demonstrate to estate agents and new build developers that you’re serious about buying a home. To reserve your new Gleeson home, your Sales Executive will require you to have an agreed Decision in Principle, so it’s important to have this ready if you’re looking to make a full reservation.
Getting one is usually quick and free. You’ll share some details with a mortgage broker or lender, the lender will run a soft credit check, and shortly after, you’ll have a document that proves you’re a genuine buyer. It’s a great confidence booster too, as having that number in writing can make the whole thing feel a lot more real.
You can learn more about how to get a Mortgage in Principle by reading our first-time buyer guide here.
Step four: Choose your mortgage deal
There are a few different types of mortgages that you can choose from, which we’ve explained below. The main difference is how your monthly payments are set.
- Fixed-rate: Your payments stay the same for a set period, usually 2-5 years. This makes it easier to budget because you know exactly what you’ll pay each month.
- Variable-rate: Your payments can go up or down depending on interest rates. You might find that your monthly payments will be cheaper at times, but it’s less predictable.
- Tracker mortgage: Your payments follow the Bank of England base rate, plus a set percentage. They can go up or down as the base rate change.
- Repayment mortgage: You pay back both the capital and the interest each month. By the end of the agreed term, the loan will be fully repaid.
- Interest-only mortgage: You only pay the interest each month. To pay back the capital, you need a separate plan, such as a lump sum from savings or an investment, to repay the loan at the end of the term.
- Buy-to-let mortgage: This is an option for people purchasing a property to rent out to tenants.
You can go directly to your bank to see what deals they offer or use a mortgage broker. Brokers compare lots of lenders for you and explain things in a way that you’ll understand, so you don’t have to get lost in the jargon. They usually save you time and sometimes money too, which is helpful if it’s your first time buying. At Gleeson, we work with several independent mortgage advisors who can help you find a suitable mortgage offer.
Step five: Send off your application
Once you’ve had your offer accepted on a house, you’ll need to apply for the mortgage officially. This is the step where you’ll hand over the paperwork, like payslips, bank statements, proof of deposit and a copy of your ID.
At this stage, the lender will arrange a valuation to check the property is worth what you’re paying. And if everything checks out ok, you’ll get a mortgage offer!
Step six: Keep things steady
Once your mortgage is approved, try to keep things stable until you get the keys. That means no new car finance, no sudden career change, and definitely no splashing out on a giant TV for your new living room just yet.
Lenders can re-check your finances right up until completion day, so keeping things steady is the safest way to avoid any hiccups.
First-time buyer mortgages FAQs
Yes, in order to reserve your chosen Gleeson home, an agreement in principle will be required.
5% is the usually the recommended minimum, but 10%+ opens up much better deals and lower monthly payments.
To apply for a mortgage, you will need documents for proof of identity (e.g. driving license or passport), proof of address (e.g. utility bill or bank statement), proof of income (e.g. payslips and P60) and evidence of your deposit. If you’re self-employed, you’ll need to show tax returns too.
On average, two to six weeks from application to mortgage offer. However, this will depend on the lender and how complicated your case is.
Ready to find out more?
If you’re a first-time buyer looking for more tips and advice, check out our other buying guides.
From saving for your deposit to moving day essentials, we’ve got everything you need to make your first home buying experience smoother and easier.
Please note: Gleeson Homes is not regulated by the FCA and does not offer financial advice. We recommend you seek independent legal and financial advice.