Everything first time buyers need to know

Ultimate guide for first time buyers

When you are buying a home for the first time, there is a lot of information that you need to understand and it can be a little overwhelming. This article should answer everything you need to know, from the different types of mortgages that are available for first time buyers to other costs to consider before starting the buying process.

Qualifying as a first time buyer can be beneficial for a number of reasons, so understanding who is classed as a first time buyer can help you to find the best mortgage deals and access other advantages available to first time buyers, including stamp duty exemption.

There are also some government schemes such as the Help to Buy scheme that first time buyers can use to help to afford a property without saving up a huge deposit. Some lenders provide first-time buyer mortgages with incentives such as cash back to help get onto the property ladder. Therefore, being classed as a first time buyer could be very handy!

At Bliss Financial we can talk you through all your options and benefits when the time comes to buy your first home.

Who can be classed as a first time buyer?

According to the government website, a first time buyer is classed as “an individual or individuals who have never owned an interest in a residential property in the United Kingdom, or anywhere else in the world, and who intends to occupy the property as their main residence.”

The definition of a first-time buyer can vary from one lender to the next, so you should check the lender’s criteria before you apply for a mortgage. For example, if someone inherited a home previously and did not actually buy it, many lenders would not class the applicant as a first time buyer, even though they did not buy the property.

What if one person in a couple has previously owned a home? In this scenario, if a couple wants to buy a home and one person has already owned a house previously, the couple would not be classed as first time buyers.

What to consider before purchasing your first property

If you are thinking about buying your first home, it is a good idea to find out as much information about the process as possible before you get started. And this is where Bliss Financial can help!

Doing your research can potentially save you a considerable amount of money and prevent you from being disappointed if you are unable to get a mortgage approved for the purchase price of your dream home. Choosing the right estate agents will also help the process go more smoothly.

These are some of the top considerations to think about when you are looking at buying a home for the first time:

Affordability

When you apply for a mortgage, lenders will do an affordability calculation to assess how much they are willing to lend you based on the mortgage repayment amount they think you can afford to pay.

In the affordability calculation, lenders will use your income and how much expenditure you have, such as any loans and other regular payments you make, to decide how much to lend to you. They will also look at how much money you spend on everyday living costs including groceries, transport, socialising and anything else you spend your money on.

You can use an online affordability calculator to get an idea of how much a mortgage lender is likely to agree to lend to you before you start the mortgage application process.

Deposit

Nearly every mortgage deal on the market requires the buyer to put down a deposit. The only exception to this in the current mortgage market is guarantor mortgages, where a parent or relative will be liable for the mortgage repayments if the homeowner misses payments.

The smallest amount of deposit that lenders will usually require is 5% (known as a 95% mortgage) and this is the most common deposit option for first time buyers, as they will often need to save up the deposit themselves.

To provide an illustration of how much deposit you would need – if you wanted to buy a property valued at £200,000, with a 95% mortgage the lender would cover £190,000 of the property price and you would be required to pay the remaining £10,000 as a deposit.

Deposits are required to reduce the risk that lenders are taking by lending to buyers, to prevent them from losing money if a buyer is unable to keep up with their monthly mortgage payments.

The higher the amount of deposit you are able to pay, the smaller your mortgage will be but you can also access better mortgage deals if you have a higher deposit of 10%, 15%, 20% or more.

Conveyancing and surveys

When you are buying a property, it is highly recommended that you have a building survey completed to identify any potential issues with the property. Most lenders will require a survey and conveyancing searches as a condition of the mortgage.

A home survey will generally cost between £400 and £1,500, depending on the type of property and the location. Conveyancing searches provide information about potential risks related to the property and include local authority searches, environmental searches and land registry searches. The cost of conveyancing searches will usually total around £300.

Solicitor fees

You will require a property solicitor to complete all of the legal work involved in buying your first home, which will usually cost you up to £2,000. The solicitor fees can be higher if there are any complicated legal issues or if you choose a more expensive solicitor.

Time scales

The process of a home purchase typically takes around 12 weeks but this can vary depending on the specific details involved in your property purchase. This time scale does not include the time it can take to search for the right home, which can take months or even longer.

Insurances

As a condition of your mortgage, you will need to have buildings insurance to cover the cost of repairing or rebuilding the property if it is damaged. It is also recommended to take out home contents insurance to cover replacement of possessions in the event of theft, fire or water damage.

Contracts

One of the last steps of purchasing a property is exchanging contracts, which legally transfers the ownership of the property to the buyer. Once you exchange contracts, both the buyer and seller are then legally bound to go through with the sale.

What mortgage options do first time buyers have?

As a first time buyer, an important decision will be which type of mortgage to choose. It can be tempting to choose an interest only mortgage instead of a repayment mortgage, as it keeps monthly payments down. However, as you are only paying off the interest, the full amount of the loan would still need to be repaid at the end of the mortgage term.

There are three main types of mortgage options:

Fixed rate

A fixed rate mortgage is where your mortgage repayments are fixed at a set amount for a period of time. This will usually be over 2, 3 or 5 years and you would incur an early repayment charge if you wanted to switch mortgages or sell up within the fixed period.

One of the benefits of a fixed interest rate is that you know exactly how much you are paying and have the security that your monthly repayments won’t suddenly increase.

Tracker

A tracker mortgage is a type of mortgage that is usually linked to the Bank of England rate and it can go up or down. With a tracker mortgage, you are paying a base rate plus a certain percentage. The lender can change the rate up to eight times per year, which makes it more difficult to plan your finances due to fluctuating mortgage repayments.

Variable rate

A variable rate mortgage is one that does not have a fixed amount and a tracker is a type of variable mortgage. Lenders set their own standard variable rate, which is not necessarily linked to the Bank of England rate but can decrease and increase over the term.

Types of property to look for when buying

The type of property that you purchase will depend on your personal preferences but if you are looking for the most affordable way to buy a property, you may want to consider shared ownership.

This is where you own a proportion of the property and a housing association or private developer owns the remainder, so you only need to get a mortgage covering your proportion.

Freehold vs Leasehold

When you see property listings you will notice that some are described as freehold and some are leasehold. If you buy a freehold property you own the property and land, while if you buy a leasehold you will have to pay ground rent to the land owners.

A typical ground rent is between £100 to £300 per year but your estate agent should provide the exact amount.

How to choose the right mortgage broker for you

Choosing the right mortgage broker can help you to find the best interest rates and an expert mortgage adviser such as Bliss Financial Solutions can walk you through the whole mortgage application process.

Lenders have different sets of lending criteria and fees, so a broker can help you to save money by finding lenders with lower mortgage fees. A mortgage broker can also recommend lenders that are more likely to provide you with a mortgage offer to save you from having a mortgage application rejected.

Speak to Bliss Financial today

At Bliss Financial, we compare thousands of home loan products to find the best options for your needs and we’ll guide you through all the complicated elements of the mortgage application process, so you can focus on finding your dream home.

Contact us today and we can provide you with impartial, expert advice to help you to get the keys to your first home.

If you’re not sure of what to ask your mortgage broker, check out our blog where we cover all the questions to ask as a first time buyer.

Picture of Amanda Marsden
Amanda Marsden

Amanda is the founder and owner of Bliss Financial. She has been helping clients with their mortgage and insurance needs for over 15 years. Her passion is to fully explore the options open to them and ensures the process is easy with no stress. She also specialises in helping clients invest in buy to let property and landlords.

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Selected from a number online because they stated that they have experience working with people from the military. This was essential given how moving on assignment often can be a negative for many banks when it comes to lending. Amanda was excellent and the process was swift and easy. We had planned to visit face to face but the process was just as high quality over zoom and phone.
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This is my second time remortgaging through Bliss and Amanda. The service provided has made my life stress free and Amanda was thorough with her research into what deal and term would be best for me based on economic uncertainty and where I am atthis point of my life.I'd not use any other mortgage broker ✨
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Amanda was extremely knowledgeable and helpful from minute one. I am very grateful to her for diligently working within a fairly tight timeframe to identify and provide me with the right product.Her communication throughout was prompt and well-received. I look forward to using her services again.
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We have used Amanda for many years. She knows exactly what she is talking about and offers the best advice. I cant recommend Amanda enough if you're thinking of getting a mortgage or going through a Re-Mortgage. She reassured us throughout the whole process and was in touch every step of the way. Thank you Amanda, here's to many more years.
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Amanda was amazingly helpful and made the whole process hassle free. Even when I changed my mind a few times nothing was a problem and the end result was exactly what I was looking for. I would highly recommend Amanda and the team
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We used Amanda a few years ago for our first mortgage. She was an absolute hero for us. She sat us down and explained everything thoroughly putting all out worries at ease as first time buyers. We had issues with our chain which meant our mortgage offer lapsed and Amanda was there every step of the way right through to the day we moved in. Due to remortgage in the next year or so and I will always go back to Amanda.
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Amanda was absolutely brilliant from start to finish. She helped me secure my first mortgage and also helped with organising the best deals on life and home insurance for my house. Would 100% recommend for anyone needing financial services of any kind!
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We specifically selected Bliss as financial advisors for our mortgage, as we'd read great reviews from other first time buyers. Amanda was so welcoming and helpful, introducing us to the whole process. We actually went to her thinking we were fish out of water, and wanting to but not expecting to but for a few years, just wanting to get our heads around it. However everything felt easy, quick and well explained and we were accepted for a within approx 2 months of starting our search. Amanda has been amazing throughout the entire process - even personalising the way she presented documents to us to suit our styles (me, needing to talk everything out and my partner more graphs and charts!). Evening appointments were organised to work around our work schedules. She was in constant communication with all stakeholders, chasing things up for us and since moving, also supporting with insurances. I'd highly recommend Bliss, and specifically Amanda for any financial advisory services however particularly first time buyers, as no question feels like a silly question. For future purchases, selling, and any other financial services - we will definitely return to Bliss.
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Great service. Professional, friendly and efficient. Amanda did a great job in advising me and then finding and securing the best mortgage to suit my situation
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Absolutely amazing service, couldn't have received any better. Very friendly and quick at replying to all enquiries. Very understanding of our circumstances which were difficult but still got us everything we needed for our new house. Thank you again Amanda, will be recommended you to everyone who needs a mortgage broker ☺️
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Amanda helped us to secure our first mortgage. She was on hand for support all the way through the process and very helpful in explaining things in a more simple way to help us to understand. She kept in contact with us regularly throughout the process and really made us feel at ease. We cannot thank Amanda enough for her support and help.
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I came across Bliss financial solutions by google search when desperately trying to find a mortgage advisor who could do the impossible (secure a DiP quickly, that met my difficult short term self employment circumstances).Amanda from Bliss has been a pleasure to work with. The perfect balance of professional and friendly, incredibly organised and certainly not deterred by a challenge. I’m really grateful for the time and effort she put into my case to allow me to secure the house I wanted within the mandated timeframe. Thank you so much Amanda and Bliss for allowing us to get our new home 💜
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I just want to say how amazing Amanda at Bliss financial is!!. My partner and I were looking at buying a shared ownership prooerty and everything started happening very quickly ... but Amanda just took over from the start and literally kept me at ease the whole way . Herprofessionalism throughout was second to none and helped with every aspect of the process. Thanks to Amanda we now have the most beautiful home and we will be forever grateful for everything she has done for us. I would 100% recommend Bliss Financial.
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Switching mortgages has always been a frustrating and time consuming experience but using Bliss made the process seamless and most importantly stress free! They were excellent and I would highly recommend their services.
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Amanda has been totally invaluable through our first home buying journey. Always on hand to answer the hundreds of questions with her excellent knowledge and guidance.I would absolutely recommend Bliss Financial Services.
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We have been in our new house for nearly 2 months now all thanks to Bliss Financial Solutions, Amy was amazing sorting our new mortgage out and talking us through everything we needed to know. Very smooth process with good communications. Thank you very much. 🙂
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I would like to thank Bliss Financial Solutions for amazing, professional and swift responses during the process of my first home purchase.It has been an absolute pleasure each time I have met you and will 100% have no hesitation for contacting you again for future requirements and highly recommending you.
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We have recently used Amy at Bliss to help us get a mortgage. After having a stressful time at high street banks and other mortgage brokers, we contacted Amy for help. Amy was absolutely excellent and the work she does is outstanding. Amy went above and beyond and managed to find us a mortgage in a matter of days. Throughout the whole process Amy kept us up to date and managed the mortgage application seamlessly despite a stressful time with other companies. I would like to express my many thanks to Amy and the team at Bliss for being so excellent and thanks to them we now have the keys to our new home.
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My experience with Bliss Financial was excellent, everyone went above and beyond. Provided the best advice and more. Our mortgage was sort with out any stress. I will continue recommending to friends a family looking for mortgage advice.
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First class customer service, highly recommend Bliss Financial Solutions LTD to anyone that values a professional, efficient and personal approach. Being first time buyer my partner and I had very limited knowledge around mortgages and all things connected. Amanda and her team went above and beyond to ensure we understood everything and provided advice when we had any questions with immediate response. Bliss financial limited we thank-you kindly for making the whole mortgage process so easy, you took all the strain off us especially need due to the birth of our daughter 3 weeks ago you made the mortgage process easy and hassle free. I will definitely be a customer for life and if there is anyway I can share your company’s profile on social media please let me know as I would love to recommend your service to others.Many thanks Melissa Hodgson, Andrew and Eloise - three very happy customers 😊
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Amy and the team were absolutely amazing! Nothing was too big. We didn't really know much about the process and Amy explained everything so we fully understood! We couldn't have done it without the team 100% would recommend to anyone! Thank you all so much ❤️
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We used Bliss to re morgage our property. Amy was absolutely fantastic, made everything feel really easy, she was clear in all her explanations, open and honest with setting expectations, and really knowledgeable. The whole process was really smooth. We also discussed life insurance which was something of a priority giving we had just had a little boy recently. Amazing service. Would highly recommend. We will definitely be using again for any future mortgage or insurance needs.
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Excellent service, they really came to the rescue after being messed about by our current lender, amazing absolutely amazing. Just wish we went to them sooner would have saved a big headache 😃
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Efficient and friendly. The team helped source the most appropriate mortgage for us at a very busy and pressured time for interest rates and timeframes. They were very helpful in expediting the completion when our solicitors were holding up proceedings. The little gift afterwards was much appreciated also. Would recommend.
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Bliss Financials was a vital part of my journey to home ownership in the UK. They always gave personalized yet professional advice and were always accessible and responsive all through the process. They were very thorough, transparent and client centered; offered and discussed all the available options to enable me make an informed choice. I would totally and wholeheartedly recommend their services and I am very grateful to Amy who handled most of the process as well as Amanda and Sophie. Great team/firm!
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I would like to praise the excellent service of the Bliss Financial Solutions LTD.I have a brilliant experience with this company. I was buying a house for the first time and Bliss Financial advised me on every step of the process (mortgage, insurance), offering me suitable options that I could choose from. I always got great offers and still was in control.All members of the team (Amy, Sophie, Amanda) are brilliant, very professional, friendly and responsive.I am very grateful to Amy (my consultant) as she did help me very much throughout the process, nothing was a problem,I received responses straight away and she also prompted other parties to act swiftly (lender, insurance companies, solicitor, etc.).If I need mortgage or insurance in future, I will definitely ask Bliss Financial for help again.
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I am now on my second mortgage which was arranged using Bliss. What an outstanding service. From start to finish the Bliss team were great in answering queries that I had. They even pushed to get me an extension to my offer seeing me secure a great rate before the recent rises. This certainly helped me secure my dream home. I would recommend Bliss to anyone who is after a professional and personable mortgage advisor.
Dean
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Amanda worked extremely hard and was really efficient is securing a fixed deal for me at a time when rates were being removed across the board. I would recommend them to anyone.
Andrew M.
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Excellent from start to finish. Every decision and option were made clear to us about the implications and any questions we had were answered in a timely manner, making remortgaging easier than I imagined it would be. Thank you to Bliss Financial Solutions for excellent service and attention to personal details that really made us feel like our priorities were put first. We will use again at our next remortgage and would recommend to anyone.
Melissa B.
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Excellent company, fast and responsive and a professional outfitI appreciate Amy’s swift advice on a deal to secure a good rate 12hrs before the rate changed
Adam L.
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What a fantastic service. I contacted Amanda via a friend recommendation. She was friendly and helpful. She passed me to Amy who was my advisor for the whole process.As a first time buyer, I was like a rabbit in the headlights. But Amy reassured me and made the whole thing a breeze, with regular contact and updates along the way.Thank you to you all.Highly recommend 😁See you when it's time to remortgage 😉
Steven R.
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We have used Bliss/Amanda for a number of mortgages now and the service has always been second to none!We have had complicated financial situations that the Bliss team have used their extensive knowledge to support and ensure we receive the best product for us.We always recommend Bliss to all our friends and family!Thank you to Amanda, Amy and Sophie
Samantha B.
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The staff are amazing and very helpful throughout the whole process, the rates are very competitive and the after sales service is second to none, I would highly recommend Bliss Financial to anyone.MarkAspire Property Rentals
Mark L.
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Any Lyons found us an excellent mortgage deal and then helped us through a long complex legal process regarding the house. She was there for us all the way through keeping us informed and chasing up when there were delays, Thank you Amy and her team.
Ken W.
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Amy has been amazing from the start of our process as first time buyers until completion. We had a few delays along the way due to waiting on a new build but Any was there to guide us through every step of the way to help us rearrange another mortgage and kept us regularly updated on the process. I have already recommended her to friends and family and wouldn’t hesitate to use her again when we remortgage.
Melissa N.
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Really happy with the service from Amy and Bliss Financial Solutions - Amy made sure everything was as straight forward as possible, was super communicative and really easy to deal with. Would not hesitate to recommend them.
Rachael G.
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Amanda was very helpful. Gave advice over a number of options for my situation. Many other companies didn't even bother calling me back. Will definitely go back to Bliss again in the future.
Lesley C.
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