Mortgage Advice for First-Time Buyers: Buying your first home starts before you book a viewing.

A lender will examine your income, spending, deposit, credit history and the property you want to buy. Preparing these areas early can reduce delays and prevent applications being submitted to unsuitable lenders.

This guide explains the practical checks to complete before applying for your first mortgage.

What Should First-Time Buyers Check?

Before applying for a mortgage, check:

• Your total buying budget.
• The amount and source of your deposit.
• Your likely mortgage affordability.
• Your credit file and recent payment history.
• The documents a lender may request.
• The full cost of buying and owning the property.
• The mortgage type, term and fees.
• Whether the property meets lender requirements.

An Agreement in Principle can indicate possible borrowing. However, it is not a guaranteed mortgage offer.

Start With the Full Buying Budget

The property price is only one part of your first-home budget.

You must also consider the deposit, legal work, surveys, mortgage fees and moving costs. Some properties may need repairs, furnishings or immediate maintenance.

Your available savings should therefore be divided into two amounts:

• Money available for the deposit.
• Money reserved for purchase and moving costs.

Using every available pound as a deposit could leave little room for unexpected expenses.

Our guide to new home mortgage costs explains the main charges buyers may face.

Understand Your Deposit and Loan-to-Value

Your deposit reduces the amount you need to borrow.

Loan-to-value, known as LTV, compares the mortgage with the property’s value.

For example, a £190,000 mortgage on a £200,000 property represents 95% LTV. The buyer provides the remaining 5% deposit.

Some lenders offer mortgages at 95% LTV. However, a 5% deposit does not guarantee approval.

The lender will still consider:

• Your income.
• Your monthly commitments.
• Your credit profile.
• The property type.
• The mortgage term.
• The source of your deposit.
• Its own lending criteria.

A larger deposit may reduce the LTV and widen the available product range. It may also affect the interest rate offered.

What If the Deposit Is a Gift?

Many lenders accept deposits gifted by close family members.

The person providing the money may need to confirm:

• The amount being gifted.
• Their relationship to you.
• Where the money came from.
• That repayment is not expected.
• That they will hold no ownership interest in the property.

The lender and solicitor may also request bank statements and identification documents.

Do not move gifted funds repeatedly between accounts. A clear transaction history can make the source easier to verify.

Check How Much You May Be Able to Borrow

A simple income multiple can provide an initial estimate. However, lenders usually conduct a more detailed affordability assessment.

They may examine:

• Basic salary.
• Overtime and bonuses.
• Commission income.
• Self-employed earnings.
• Loans and credit card balances.
• Car finance.
• Childcare costs.
• Student loan deductions.
• Dependants.
• Regular household spending.
• The proposed mortgage term.

This explains why two people with the same income may receive different borrowing figures.

Use the Connect Mortgages residential affordability calculator before setting your property budget.

You can also compare the result with the Connect Lifetime mortgage affordability calculator.

Calculators provide estimates. A lender’s full assessment may produce a different result.

Review Your Credit File Before Applying

A credit score is not the only factor considered by lenders.

They may review the information behind the score, including:

• Missed or late payments.
• Defaults.
• County Court Judgments.
• Current borrowing.
• Credit utilisation.
• Electoral roll information.
• Financial associations.
• Recent credit applications.
• Address history.

Check that your personal information is accurate across the main credit reference agencies.

Correct any errors before submitting a mortgage application. Avoid making several credit applications within a short period.

You can also check your credit file before speaking with an adviser.

A previous credit problem does not always prevent a mortgage. However, it may affect lender choice, deposit requirements and pricing.

Prepare the Documents a Lender May Request

Missing evidence can delay a mortgage application.

Employed applicants may need:

• Recent payslips.
• Recent bank statements.
• A P60.
• Proof of bonuses, overtime or commission.
• Identification.
• Proof of address.
• Deposit evidence.

Self-employed applicants may be asked for:

• Tax calculations.
• Tax year overviews.
• Company accounts.
• Business bank statements.
• An accountant’s reference.
• Evidence of current trading.

Requirements vary between lenders and applications.

Bank statements may also be reviewed for regular commitments, overdraft use and unexplained transactions.

The Connect Lifetime guide to getting mortgage ready provides further preparation steps.

Understand the Main Mortgage Options

The lowest advertised rate is not always the lowest-cost mortgage.

Consider the rate alongside:

• Product fees.
• Valuation fees.
• Cashback.
• Free legal work.
• Early repayment charges.
• The initial deal period.
• The mortgage term.
• Reversion rates.
• Portability.

Fixed-Rate Mortgage

A fixed-rate mortgage keeps the interest rate unchanged during an agreed period.

This provides payment certainty. However, early repayment charges may apply during the fixed period.

Tracker Mortgage

A tracker mortgage usually follows the Bank of England Bank Rate plus a lender margin.

Payments may fall when the tracked rate falls. They may also rise when it increases.

Discounted Variable Mortgage

A discounted mortgage is set below a lender’s variable rate for an agreed period.

The lender’s variable rate can change. Therefore, monthly payments may also change.

Read our guide to first-time buyer mortgage rates before comparing products.

Consider the Mortgage Term Carefully

A longer mortgage term may reduce the initial monthly repayment.

However, borrowing over a longer period can increase the total interest paid.

A shorter term may reduce total interest. It can also produce higher monthly payments.

The term must remain affordable and meet the lender’s age and retirement criteria.

Ask for repayment illustrations across several terms. This can show the difference between monthly affordability and total borrowing cost.

Obtain an Agreement in Principle

An Agreement in Principle is an initial lender assessment.

It may also be called a Decision in Principle or Mortgage in Principle.

The lender may consider:

• Your income.
• Your commitments.
• Your deposit.
• Your credit profile.
• The required mortgage amount.

An Agreement in Principle can help establish a realistic property budget. Estate agents may also request one before accepting an offer.

However, it is not a mortgage offer.

The full application will still depend on:

• Verified documents.
• A complete affordability assessment.
• The lender’s credit decision.
• The property valuation.
• The property meeting lending criteria.
• No significant change in your circumstances.

Avoid submitting several Agreements in Principle without understanding how each lender conducts its credit search.

Check the Property as Well as the Mortgage

Mortgage approval depends on both the applicant and the property.

A lender may have concerns about:

• Non-standard construction.
• Short leases.
• Serious defects.
• Flats above commercial premises.
• High-rise buildings.
• Cladding.
• Restrictive occupancy conditions.
• Unusual legal titles.
• Properties requiring extensive work.

A mortgage valuation is completed for the lender. It is not a full structural survey for the buyer.

Consider whether you need a more detailed survey based on the property’s age, condition and construction.

Your solicitor will complete separate legal checks and searches.

Avoid Financial Changes Before Completion

A mortgage application is not finished when the lender issues an offer.

The lender may conduct further checks before completion.

Where possible, avoid:

• Taking out new loans.
• Increasing credit card balances.
• Missing payments.
• Changing employment without advice.
• Moving deposit funds without records.
• Making unexplained large transactions.
• Applying for several credit products.

Tell your adviser promptly when your income, employment, deposit or commitments change.

A significant change could affect affordability or the lender’s decision.

When Can a Mortgage Adviser Help?

Lenders do not all assess applications in the same way.

One lender may accept an income type or deposit source that another lender will not accept.

A mortgage adviser can help you:

• Review your likely affordability.
• Understand deposit requirements.
• Compare lender criteria.
• Prepare supporting documents.
• Examine product fees and features.
• Obtain an Agreement in Principle.
• Submit the full application.
• Respond to lender questions.

Before proceeding, ask what advice fee may apply and how the adviser is paid.

Learn more about our first-time buyer mortgage service.

A First Mortgage Is a Sequence of Decisions

The first property you like may not be the first property you can sensibly finance.

That distinction matters.

Good preparation establishes the borrowing limit before emotion begins influencing the search. It also leaves room for legal costs, ownership expenses and future changes.

A mortgage should support the life built inside the property. The property should not place the rest of that life under avoidable pressure.

Use our free mortgage calculators to estimate repayments and purchase costs.

You can also speak with a mortgage adviser about your circumstances.

First-Time Buyer Mortgage Advice FAQs

How much deposit does a first-time buyer need?

Some first-time buyers may qualify with a 5% deposit.

The amount required depends on affordability, credit history, property type and lender criteria. A larger deposit may provide more options.

Is an Agreement in Principle guaranteed?

No. It is an initial indication rather than a mortgage offer.

The lender must still verify your information, assess the property and complete its underwriting process.

Does checking mortgage affordability affect my credit score?

Using an online affordability calculator does not normally involve a credit search.

An Agreement in Principle may use a soft or hard credit search. Check the lender’s process before proceeding.

Can a family member provide my deposit?

Many lenders accept gifted deposits from close family members.

Evidence of the gift, its source and the donor’s identity will usually be required.

Should I choose the mortgage with the lowest rate?

Not automatically.

Compare the rate, product fee, incentives, early repayment charges and cost across the initial deal period.

What can delay a first-time buyer mortgage application?

Common causes include missing documents, unexplained transactions, deposit evidence problems and property concerns.

Changes to employment, income or borrowing can also cause delays.

When should I speak with a mortgage adviser?

Consider speaking with an adviser before viewing properties or making an offer.

Early advice can help establish your budget and identify possible application issues.

Risk warning: Your home may be repossessed if you do not keep up repayments on your mortgage.