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Buying a house is exciting, but also stressful. While house-hunting for the perfect home can be fun, it’s important to sort out the details before you make an offer. Calculating costs, applying for a mortgage and staying under budget are important considerations. Take heed of these tips before you buy your first house.

Illustration of a small house next to keys

1. Sort out your finances

Healthy debt and your credit score

The first consideration is debt. Your credit score is an important part of applying for a mortgage. It’s affected primarily by your debt payment history – a higher credit score means you’re better at managing repayments.

If you’ve never taken on any debt, you won’t yet have a credit score and it will be harder to get your mortgage application approved. “Healthy” debt works in your favour to show lenders your regular on-time payment history.

Along with traditional bank loans, these are some other common types of debt:

  • Bank overdrafts
  • Credit cards
  • Store cards
  • Hire purchase (HP) agreements
  • Government debt (council tax, HMRC)
  • Arrears debt (gas, electricity, water)
  • Student loans

Affordability and budget

Your second financial consideration is affordability. Assess what you earn and how much you can afford to pay each month to get an idea of the property price to look for. Use a mortgage calculator to input your salary and bonuses and get an idea of your borrowing ability.

It’s a good idea to cut back on spending for a few months before you put in your mortgage application. Lenders take your monthly expenses into account when calculating loans, and a frugal few months would be good for your calculation.

2. Get your information ready

Preparing for all eventualities is better than scrambling at the last minute to find a document you may need. There’s a lot that a mortgage provider can ask for, so it’s better to overprepare, or at least ensure you’ve got access to all the information they could request.

Identification documents

To prove your identity, you’ll need the following:

  • ID document, passport or driving licence
  • Electoral roll registration*
  • Proof of address**

*If you’re in the UK on a visa you won’t be registered to vote, but it’s still possible to get a mortgage. If you’re a British citizen who hasn’t registered, check your local authority website for voter registration – this can help reinforce your proof of identity.

**Your proof of address could be a recent gas or electricity bill, credit card or mobile phone bill, a letter from council confirming electoral roll listing or a council tax bill, among others.

Proof of income

Mortgage lenders will need to know how much you earn. To prove your income, you will need the following:

  • Pay slips
  • Proof of guaranteed bonuses
  • Proof of any overtime pay
  • Proof of other income from investments or state benefits
  • Bank statements (three months)

If you’re self-employed, we recommend the following:

  • Three years of Self Assessment statements
  • Bank statements (three months)

No matter whether you work for a company or freelance, your bank statements must align with your proof of income.

3. Know your facts and dates

In addition to your financial information, mortgage lenders need to get an idea of your overall financial situation. This involves questions about your employment, family, income and expenditure.

Fact finding

Lenders go through this process every time you apply for a mortgage. It’s used to get a full overview of your financial situation, from employment to credit history and family.

Be prepared to answer the following questions:

Employment

  • At what age do you aim to retire?
  • If you’re a contract worker, what is the length of your contract?
  • Do you work full-time or part-time?
  • What are your expenses each month?
  • What are the balances of your store and credit cards?
  • What amounts do you pay back each month?
  • Is your debt rising, falling or stable?

Dependants

  • Do you care for your parents?
  • Do you have any childcare payments?
  • Do you have maintenance payments for children not living with you?

Other questions

  • Are you planning to start a family or have more children?
  • Do you expect your income to fall in the near future?
  • Are you planning to leave your job, start a business or become self-employed?
  • Have you ever taken a payday loan?
  • Do you ever gamble?
  • Can you afford your mortgage repayments?

Dates

It’s quite difficult to remember specific dates, but they’re often so important when you apply for a mortgage. Lenders will want to delve into the finer details of your living situation and employment.

Here are some questions to prepare for:

  • How long have you lived at your current address?
  • If less than three years, provide details of your previous address.
  • What date did you start with your current employer (and probation period details)?
  • If less than one year, what are the start and end dates of your previous employer?
  • What are your children’s dates of birth?
  • If you care for your parents, what are their dates of birth?

4. Research your mortgage options

It can be complex trying to decide on a lender for your first home. Mortgage providers are all trying to compete for your business, offering different mortgage structures, terms and rates.

There are various comparison websites that show you current rates. It’s useful to check these to get an idea for the market.

See also: It’s a great time to buy your first UK property – here’s why

First-time homebuyers should also be wary of making common avoidable mistakes. The competitive mortgage market makes it hard sometimes to make sure you’re getting the best deal, so it’s important to take your time and consider everything carefully.

Lastly, we’d always recommend getting mortgage advice. A mortgage specialist can provide you with unbiased advice and whole-of-market mortgage solutions. They can guide you through the mortgage application process and advise you on your financing options.


For assistance with your mortgage application, get in touch with our team of specialists by emailing mortgages@sableinternational.com or calling +44 (0) 20 7759 7519.

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