Buying a house – the basics

What to expect when you’re buying your first house

Felicity Hannah - Virgin Money Living Mentor

by Felicity Hannah | Independent Money Mentor

Award-winning personal finance and consumer affairs journalist

If you’re ready to buy your first house then congratulations! In the current climate of high rents and high house prices, you’ve done well to reach this point and you can feel pretty pleased with yourself.

However, in many ways the hard work is just starting. From arranging a mortgage to choosing an actual home, here’s a quick guide to the basics of buying a house.

How much can you afford?

Before you start browsing Rightmove and Zoopla, it’s a good idea to understand what you can afford.

This used to be worked out very simply – the lender would generally let you borrow between 3 and 5 times your income. These days the lender typically pays more attention to your other outgoings like debt repayments, commuting costs and childcare.

This affordability assessment also looks at whether you could afford your monthly payments if interest rates started to rise.

You can talk to a mortgage adviser or, for a more general idea of what you can afford, you could use the calculator on the Money Advice Service website

Arranging your mortgage

Before you can make an offer on a house it’s important to have a “decision in principle”. That means a lender has assessed your affordability and is prepared to lend you the money, subject to a formal assessment when you make a full application.

You can look at the mortgages being advertised by banks, you can talk to a mortgage broker or adviser, or you can use a comparison website.

An adviser or broker can be a good idea, particularly if you are worried about affordability or want to understand your options in greater detail. A broker may charge for this service so find out the cost of any advice before you go ahead.

Don’t forget: A mortgage in principle is not an absolute guarantee.

Viewing a property and making an offer

Searching for suitable properties can be really exciting but the more legwork you do, the less likely you are to make a mistake and offer too much.

Many of the top online property portals provide information on the likely value of a property, as well as what similar homes in the area have gone for. They can also provide information on local schools and facilities.

You really need to be cool and dispassionate when viewing a property, rather than excitedly picturing where the furniture will go.

Budget for the extra costs of buying a house

It’s not just the deposit you’ll need; buying a house comes with some additional costs and if you haven’t factored them in then it might cause you problems.

You may need to pay a mortgage application fee, the survey costs, the solicitor’s fees, Stamp Duty plus any initial redecorating charges.

The Money Advice Service has a good timeline of costs for Scotland and costs for the rest of the UK.

The buying process

Be prepared for occasional hiccups when buying a house – it’s rarely a straightforward process. Ensure that you have all your paperwork and research in place before you make an offer this will help make the process smoother and reduce the chance of problems later on.

It’s also important to stay on top of all paperwork from the solicitor and mortgage company as it is needed, and to regularly check in with the estate agent and solicitors dealing with the purchase.

Before making financial decisions always do research, or talk to a financial adviser. Views are those of our mentors and customers and do not constitute financial advice.