Buying your first home is one of the most exciting — and daunting — things you'll ever do. The good news is that the mortgage process is much more manageable than it might look from the outside. In this guide, I'll walk you through everything you need to know, step by step.
Speaking to an independent mortgage broker before you start house hunting can save you time and money. A broker can give you a realistic picture of what you can borrow, so you only look at homes in your price range.
Step 1: Work out how much you can borrow
Lenders typically allow you to borrow between 4 and 4.5 times your annual income, though some will go higher depending on your circumstances. For a joint mortgage, they look at your combined income.
For example, if you earn £35,000 and your partner earns £30,000, your combined income is £65,000. At 4.5x, you could potentially borrow up to £292,500.
As well as income, lenders will look at:
- Your monthly outgoings (loans, credit cards, subscriptions)
- Your credit history and score
- The size of your deposit
- Your employment type (employed, self-employed, contractor)
The best way to get an accurate figure is to speak to a mortgage broker, who can run a soft credit check and give you a reliable Decision in Principle before you start viewing properties.
Step 2: Save your deposit
Most lenders now require a minimum deposit of 5% of the property price. However, the bigger your deposit, the better the mortgage rate you'll be offered — because you represent less risk to the lender.
Here's a rough guide to how deposit size affects the rates available to you:
- 5% deposit (95% LTV) — Rates available, but higher
- 10% deposit (90% LTV) — Good range of deals
- 15–20% deposit (80–85% LTV) — Better rates start to open up
- 25% deposit (75% LTV) — Access to the most competitive rates
"Even saving an extra 5% on top of the minimum deposit requirement can save you thousands of pounds in interest over the life of your mortgage."
Step 3: Get a Decision in Principle
Before you start making offers on properties, it's worth getting a Decision in Principle (also called an Agreement in Principle or Mortgage in Principle). This is a conditional statement from a lender saying they'd be willing to lend you a certain amount, based on a soft credit check.
Estate agents will often ask to see your Decision in Principle before they take your offer seriously, so it's an important step to take before you start viewing properties.
A Decision in Principle uses a soft credit search and won't harm your credit score. The full mortgage application will involve a hard search, so avoid applying to multiple lenders directly — a broker submits a single application to the right lender.
Step 4: Find a property and make an offer
Once you have your Decision in Principle, you can start viewing properties in earnest. When you find the right one, you'll make an offer through the estate agent. If accepted, the sale becomes "subject to contract" — meaning it's not yet legally binding.
At this stage you'll need to appoint a solicitor or conveyancer to handle the legal side.
Step 5: Submit your full mortgage application
Once your offer is accepted, you can submit your full mortgage application. Your broker will do this for you and will need:
- Proof of identity (passport or driving licence)
- Proof of address (utility bill or bank statement)
- 3–6 months' bank statements
- 3 months' payslips (or 2–3 years of accounts if self-employed)
- Details of any existing loans or credit commitments
The lender will then carry out a full credit check and arrange a valuation of the property to confirm it's worth what you're paying.
Step 6: Receive your mortgage offer
If your application is approved, the lender issues a formal mortgage offer — a binding commitment to lend you the money. Your solicitor will review this alongside the results of the property searches they've been carrying out.
The time from application to mortgage offer typically takes 2–6 weeks, though it can vary significantly based on the lender and the complexity of your situation.
Step 7: Exchange contracts and complete
Exchange of contracts is when the sale becomes legally binding. You'll pay your deposit (via your solicitor) and agree a completion date. If you pull out after exchange, you'll lose your deposit — so make sure you're committed before this point.
Completion day is when the remaining money is transferred and you receive the keys. Congratulations — you're a homeowner!
Other costs to budget for
Don't forget to factor in these additional costs when you're budgeting:
- Stamp Duty Land Tax — First-time buyers are exempt on the first £425,000
- Solicitor/conveyancing fees — Typically £1,000–£1,800
- Survey costs — A basic valuation is free; a full structural survey costs £500–£1,500
- Mortgage arrangement/booking fee — Can be £0–£2,000 depending on the deal
- Buildings insurance — Required by all mortgage lenders from day of completion
- Removal costs — Don't forget the van!
Why use a mortgage broker?
As an independent mortgage broker, I have access to thousands of mortgage products from over 90 lenders — including deals not available directly to the public. I do the comparison work so you don't have to, and I'll handle the application and paperwork from start to finish.
Best of all, the initial consultation is completely free. You only pay a broker fee if you proceed with a mortgage through me — and this is always agreed upfront with no surprises.
Book a free, no-obligation consultation and I'll give you a clear picture of what you can borrow, which lenders suit your situation, and what your monthly payments would look like. Book your free consultation →