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I want to buy a home – what’s the first thing I need to do?

Firstly, start saving. If you want a mortgage with any lender, you’ll usually need to have saved a deposit of at least 5% of the value of the property. We require a minimum deposit of 10%.

Often the more you’ve saved, the better the interest rate you’ll be able to get.

What exactly is a mortgage?

It’s a long-term loan to buy a property.

As a first time buyer with us, your mortgage will be a ‘repayment mortgage’, so each monthly payment you make covers the loan capital (the amount borrowed) and the interest on it. The ‘term’ of the mortgage is the length of time you’ve agreed with your lender to pay back your mortgage – our maximum loan period is 35 years. Your advisor will be able to recommend the most suitable term for you, depending on your circumstances.

As long as you make the repayments in full every month, at the end of the term, you’ll have paid off your mortgage.

The mortgage is ‘secured’ on the property - this means that your home could be repossessed if you don’t keep up with your repayments.

How much can I borrow?

How much we’ll lend you depends on your income, your outgoings and your ability to pay back the amount you’re borrowing.

Our affordability calculator will help you work out what you could borrow based on your income and outgoings.

You can get an indication of how much your repayments will be with our repayment calculator

I’ve found the property I want to buy. How do I get started?

Do you have a deposit saved up? Then speak to an advisor who’ll be able to tell you about the different types of mortgage there are. They’ll also be able to work out how much you can afford.

You can look at our mortgages and use our affordability calculator to see what you might be able to borrow. Then call us on 0800 121 8899 to talk to one of our mortgage advisors, or find a financial advisor (or mortgage broker) who can look around for the right mortgage for you.

How to apply

Call us free on 0800 121 8899 – we’re always happy to help.

We’re open 8am to 8pm Monday to Friday, 9am to 5pm on Saturdays, and 10am to 4pm on Sundays.

Set aside enough time – it can take 45 minutes to 1 ½ hours.

If you call us about getting a mortgage, then – like all lenders – we’ll go through detailed questions to assess what you can afford. This covers what you earn and your credit commitments, so make sure you have the details you need (mentioned below) to hand.

One of our mortgage advisors will explain our mortgages and help find the right one.

We’ll recommend a mortgage that suits you and help you apply. We don’t charge anything for our advice but remember – we only offer our own mortgages.

Find a financial advisor

A financial advisor (they can also be called a ‘mortgage broker’) will do a lot of the work for you by finding out what you need and what you’re eligible for, then scouring the market to find you the most suitable mortgage.

Before you use a financial advisor, check:

  • How much do they charge?
    Some will charge you a fee, some earn commission from the mortgage lender – and some do both.
  • Are they qualified?
    The most common qualification is CeMAP (Certificate in Mortgage Advice and Practice).
  • How do they work?
    Different financial advisors work in different ways:

    • Some search the ‘whole-of-market’ – they’re not tied to one lender, so they’ll be able to show you a wide range of mortgages and select the right one for you.

    • Some work with a number of lenders but not all – you’ll still be shown a good selection of mortgages but be aware that they’re not able to select from the whole of market.

Some lenders only make certain mortgages available to ‘direct’ customers, not to customers who’ve come to them through a financial advisor – so you might want to do some research of your own.

To find a financial advisor, you may want to search www.unbiased.co.uk or www.vouchedfor.co.uk.

What you’ll need to have to hand

Whether you call us or speak to a financial advisor, this is the information you’ll need to provide:

About you:

  • Full name
  • Current address, and addresses for the previous three years
  • Date of birth

We’ll ask for evidence that proves who you are and where you live, for example, a valid UK passport or UK photocard driving licence, along with a UK-based utility bill.

About the property

  • Purchase price/value

About your earnings
We'll need:

  • Employed? Payslips for the last three months

  • Self-employed? Accountant’s Certificate or your previous two years’ HMRC tax calculations and latest HMRC Tax Year Overview

  • Contractor? The name of your employer, your occupation, and the start and end dates of the contract. And eight of your most recent payslips (or three if you’re paid monthly) We’ll ask you for details of all your income including:
    • Gross annual income
    • Gross annual bonus
    • Overtime, shift allowances and commission
    • Other allowances
    • Gross dividend income for the last two years
    • Gross share of net profits
    • Freelance work or other job(s)
    • Child Benefit
    • Working and Child Tax Credits
    • Disability Living Allowance and Personal Independence Payments
    • Maintenance payments
    • Pension income - private and state
    • Rental income from other properties

About any credit commitments you have

  • Credit and store cards – including the provider, your credit limit and how much you currently owe

  • Ground rent and service charges

  • Secured and unsecured personal loans, including student loans

  • Hire purchase agreements and lease payments

  • Home insurance (building and contents)

  • Life assurance

  • Pension contributions

  • Nursery/childminding fees

  • School fees

  • Maintenance payments

I want to buy a home but I haven’t found one yet. Is there anything I can do now?

If you haven’t found a place to buy yet, you can still find out how much you might be able to borrow from us. Our affordability calculator will help you work out what you could borrow based on your income and outgoings.

You can get an indication of how much your repayments will be with our repayment calculator

If you haven’t found a property yet, you can still apply for an Agreement in Principle (AIP). This is a statement from a mortgage lender to say that ‘in principle’, they’ll lend you a certain amount. It’s based on you providing some information to the lender, such as your income and outgoings. They may also do a credit check on you. It’s not a full mortgage application – it’s an indication of what you could borrow.

It’s valid for 90 days and it’s a good idea to have one ready for when you find a property and want to make an offer.

If you need advice, call us on 0800 121 8899 for more information.

What types of mortgages are there for first time buyers?

  • Fixed rate – your monthly repayments stay the same for the fixed length of time, usually two, three or five years. We’ll write to remind you when your fixed rate is coming to an end and prompt you to review your mortgage.
  • Base rate tracker – the interest rate is tracked against the Bank of England Base Rate (BBR) for an initial agreed amount of time. This means that your interest rate increases or decreases in line with any changes to the BBR during that time and your monthly repayments can vary. We’ll write to let you know about any changes to the interest rate.
  • Variable rate – the interest rate can change so your monthly repayments can vary. It’s not a tracker mortgage so it’s not linked to the BBR. Instead, it’s managed by us and can change in line with your mortgage terms and conditions. We’ll write to let you know about any changes to the interest rate.

How do I decide which mortgage is right for me?

When you speak to one of our specialist advisors, they’ll ask you detailed questions about what you need and what you can afford. Then they’ll recommend the best mortgage for you.

Your advisor will also take into account:

How much peace of mind you want

A fixed rate mortgage may have a slightly higher interest rate than a variable rate mortgage, but you’ll know exactly what your repayments will be each month.

What your short-term and long-term plans are, for example:

  • Do you want to make overpayments?

Some mortgages allow unlimited overpayments while others only allow overpayments up to a limit. You might get a large bonus or a windfall and want to put that into your mortgage – it’s worth thinking about before you take your mortgage out.

  • Do you think you might want to pay off your mortgage before the end of the term?

Your advisor will ask you about this so that they can recommend the right mortgage for you.

Do you have savings?

An Offset mortgage might suit you if you have savings. We link your Offset savings to your mortgage to reduce the mortgage interest you pay.

Remember: most mortgages automatically transfer to a variable rate after the initial deal finishes so your monthly payment could increase unless you change to a different mortgage. If you have a mortgage with us, we’ll write to remind you that your current deal is coming to an end, and prompt you to review your mortgage.

What other costs do I need to budget for?

As well as your mortgage repayments, you’ll need to pay:

  • Deposit
    To take out a mortgage with us, you’ll need to have saved 10% of the property value.
  • Mortgage set-up and arrangement fees
    These vary. Your advisor will tell you about any fees and charges that apply.

  • Valuation fee
    When you take out a mortgage with us, we’ll instruct an expert to inspect and value the property to make sure it’s worth the money we’re lending you to pay for it. We include a standard valuation up to £670.
  • Optional Homebuyer’s Report or Full Structural Survey
    You may decide to pay for a more detailed survey on the property. This is for your own peace of mind.

  • Stamp duty
    This is a Government tax. Find out if you have to pay Stamp Duty on the property you’re interested in buying at www.gov.uk (type ‘stamp duty’ in the search box).

  • Legal fees
    There will be a solicitor’s fee plus the Land Registry charge and a fee to transfer the money.

  • Moving costs
    Hiring a van, hiring help, buying packaging materials etc

  • Building and contents insurance
    If you have a mortgage, you’ll need to have buildings insurance – this covers the cost of rebuilding your home if it’s damaged. If you’re buying a flat, this may be covered in the maintenance charge. Contents insurance covers your furniture and possessions.

 

What’s my credit score and how can I check it?

Your credit score is produced by the credit reference agencies. It’s based on your credit report and used by banks, building societies and other organisations to help determine how risky it is to lend money or offer credit to you.

Every time you apply for credit, the institution will check your records, including your score. Your credit score is made up by looking at:

  • How much you owe - credit cards, loans etc

  • How much of your available credit you’re using

  • Your payment history. Do you pay on time? Do you pay in full?

  • Other credit searches – other applications for credit cards or loans

  • Public information - electoral register, County Court Judgements etc

The main credit reference agencies in the UK are Experian, Equifax and Call Credit. For a small fee, these companies will send you a copy of your credit report.

How can I improve my credit score?

Here are some tips that could help you improve your credit record:

Make sure you’re on the electoral register
Not already on? To register, go to www.gov.uk/register-to-vote. You’ll need your National Insurance number.

Cancel any unused credit cards or bank accounts

Check your address
Make sure all your active accounts are registered to your current address.

Demonstrate that you can manage credit
For example, by spending occasionally on a credit card and repaying it promptly. Make payments that are more than the minimum and stay well within your credit limit.

Make payments on time
If you make payments late or miss them altogether, it has a negative impact on your credit rating.

If there’s a mistake on your record, you can write to the agency and ask them to correct it. Remember: County Court Judgements for non-payment of debts, Individual Voluntary Arrangements (IVAs) and bankruptcies stay on your credit record for at least six years.

For more tips and information about credit scoring, go to www.moneysavingexpert.com/loans/credit-rating-credit-score.

I’ve found the place I’d like to buy and my offer has been accepted. What happens now?

Appoint a solicitor

We’ll check to see if your appointed solicitor is on our panel. If not, we can request that they are added. If this isn’t possible you will need to appoint a solicitor from our panel. They can then start the legal work, let you know what information they need and keep you informed about the progress of your purchase.

You’ll need to apply in full for the mortgage

Even if you have an Agreement in Principle (AIP), you’ll now need to apply in full for your mortgage. If you’ve decided to take a mortgage with us, call us on 0800 121 8899 to speak to one of our mortgage advisors.

Who carries out the valuation?

When you take out a mortgage with us, we’ll instruct an expert to carry out a basic valuation of the property and make sure it’s suitable to ‘secure’ the loan – this means we make sure it’s worth the money we’re lending you. We include a standard valuation up to £670 for first time buyers.

Or, you could choose to pay extra and have a more detailed survey:

Homebuyer's Report

This reveals any structural problems, such as subsidence or damp, plus problems inside and outside (eg: mobile phone masts, risk of flooding etc). The survey isn't comprehensive - the surveyor won’t move furniture or look underneath floorboards - and it's only suitable if the property is conventional and in reasonable condition.

If you choose to have a Homebuyer’s Report, we’ll pay up to £670 towards the fee.

Full Structural Survey

This is the most in-depth type of survey – the structural engineer carries out a thorough inspection from top to bottom. As well as all the things looked for in a Homebuyer’s Report, they’ll actively look for other problems such as asbestos, insect infestations and faulty plumbing. Their survey identifies any areas that may need work in the future.

If you choose to have a full structural survey, you need to pay the full cost yourself.

How do I finalise the purchase?

After the valuation and survey (if applicable) and when you have your mortgage offer, your solicitor will send you the contract to sign. Go through it carefully and make sure you’re happy with everything because when you sign the contract, you’re committed to the sale.

When your solicitor has your signed contract and the seller’s solicitor has theirs, they exchange them. This formal ‘exchange of contracts’ means that the purchase is now legally binding. Then you and your solicitor can agree a date for completion.

At this point, you must also make sure that you have adequate buildings insurance for the property. You may also be asked to pay a holding deposit.

What happens at completion?

The period between the solicitors exchanging contracts and the purchase being completed can vary, but it’s usually no longer than four weeks. When it’s complete, you’ll have to pay these charges:

The balance in full for the property
Your deposit plus the amount you’ve borrowed to pay for the property.
You might also have to pay the solicitor a fee for transferring the money.

Mortgage fees (if applicable)

Land Registry charges
You usually pay this to your solicitor who pays the Land Registry for you.

Stamp Duty
You pay this tax to your solicitor and they pay it to the Government for you.

Your solicitor’s bill

When everything’s been completed and everyone has been paid, you can move into your new home.

I’ve moved into my home and I’m paying my mortgage each month. What happens now?

Every year in January, we’ll send you a statement that shows how much you’ve paid off your mortgage, and how much you have left to pay.

If you’ve taken out a fixed rate mortgage with us, we’ll write to you before your current deal comes to an end to sugest a mortgage review.

You can find lots more information in our Help and Support section but if you have any questions about your mortgage, call us on 0800 121 8899

Existing members

Whether you'd like to borrow more, move home or change your current mortgage, we're here to help.

Help and guides

We’ve got lots of information to help you understand more about our mortgages and lending criteria.

Other information

Read some of the other important information you should know about having a mortgage with us.