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Buying your first home is probably the biggest financial decision you’ll make, and the process feels designed to confuse you. Mortgage brokers throw around terms like LTV, AIP, and stress testing as if you grew up speaking the language. You haven’t. Nobody has. You just need someone to walk you through it in order.
This guide does exactly that — the actual sequence of steps from “I think I want to buy a house” to “here are the keys.” No product recommendations, no pretending there’s one right answer for everyone. Just what happens, when, and what you need to have ready at each stage.
Here’s the thing most first time buyers don’t realise until they’re in it: getting a mortgage isn’t one event. It’s a series of checkpoints, and missing paperwork at any one of them can add weeks to your timeline. Knowing the order means you can prepare before you’re asked.
Step 1: Work out what you can actually afford
Before you look at a single house, work out two numbers: your deposit, and your realistic monthly budget.
Most mortgages need a deposit of at least 5% of the property price, though 10% opens up more deals and better rates. On a £250,000 house, that’s £12,500 to £25,000. Lenders will also check your “loan to value” (LTV) — the size of the mortgage compared to the property price. A 90% LTV mortgage (10% deposit) generally comes with a higher interest rate than a 75% LTV mortgage (25% deposit), because the lender is taking on more risk.
For your monthly budget, don’t just look at what a lender says you can borrow — work out what you can comfortably repay alongside your current outgoings, bills, and the fact that interest rates can rise. MoneyHelper’s mortgage affordability calculator is a free, independent place to start.
Step 2: Check and improve your credit file
Lenders look at your credit history to judge how reliable you are at repaying debt. Before applying, check your credit report through one of the main UK credit reference agencies (Experian, Equifax, TransUnion). Look for:
- Late payments or missed bills in the last 12 months
- High credit card balances relative to your limit
- Any accounts you don’t recognise (could be fraud)
- Being registered on the electoral roll at your current address
You don’t need a perfect score, but obvious red flags in the 6 months before applying can cause problems. Fix what you can — pay down card balances, register to vote, correct errors — at least a few months before applying.
Step 3: Get an Agreement in Principle (AIP)
An Agreement in Principle (also called a Decision in Principle) is a lender’s estimate of how much they’d lend you, based on a quick check of your income and credit file. It’s not a guarantee — it’s a sense check, and estate agents will often ask to see one before they take your offer seriously.
You can get an AIP directly from a lender or through a mortgage broker, usually in minutes online. It typically lasts 60–90 days. Getting one early means you’re not wasting time viewing houses outside your actual budget.
Step 4: Find a property and make an offer
With your AIP in hand, you can start viewing seriously. When you find somewhere, you make an offer through the estate agent — this is informal and not legally binding on either side until contracts are exchanged later.
If your offer’s accepted, you’ll need a solicitor or licensed conveyancer to handle the legal work: title checks, local authority searches, drawing up contracts. This is also when you’ll need to decide whether you want a survey — an independent check of the property’s condition, separate from the valuation the lender does for their own purposes.
Step 5: Submit the full mortgage application
This is where the paperwork gets real. Lenders will want:
| Document | Why they need it |
|---|---|
| Proof of ID | Passport or driving licence |
| Proof of income | 3 months’ payslips, or 2–3 years of accounts if self-employed |
| Bank statements | Usually 3–6 months, to check spending patterns |
| Proof of deposit | Where the money came from — savings, gift, inheritance |
| Proof of address | Utility bill or council tax statement |
If part of your deposit is a gift from family, the lender will usually want a signed letter confirming it’s a gift, not a loan that needs repaying — this matters because it affects your actual debt position.
The lender then arranges a valuation of the property (to protect their own lending decision, not to check the property is sound for you) and runs a full affordability assessment, including a “stress test” — checking you could still afford repayments if interest rates rose.
Step 6: Mortgage offer, exchange, and completion
Once approved, you’ll get a formal mortgage offer — a binding commitment from the lender, usually valid for 3–6 months. Your solicitor then finalises searches, agrees a completion date with the seller’s solicitor, and you exchange contracts, at which point the sale becomes legally binding and you’ll typically pay your deposit.
Completion is moving day — the money transfers, you get the keys. Between exchange and completion is usually 1–4 weeks, though it can be same-day in some cases.
The misconception that trips people up
A lot of first time buyers assume the biggest number that matters is the interest rate. It isn’t — not on its own. A slightly higher rate with lower fees, or a longer fixed term that gives you payment certainty while you settle into homeownership, can matter more depending on your situation. Comparing mortgages purely on headline rate, without factoring in arrangement fees, early repayment charges, and how long the rate is fixed for, is one of the most common first-time buyer mistakes. Look at the total cost over the fixed period, not just the monthly figure.
Fixed, tracker, or variable — what’s the actual difference
| Type | How it works | Best for |
|---|---|---|
| Fixed rate | Interest rate stays the same for a set period (usually 2–5 years) | People who want predictable payments and protection from rate rises |
| Tracker | Follows the Bank of England base rate, plus a set margin | People comfortable with payments moving up or down |
| Standard Variable Rate (SVR) | The lender’s own default rate, can change anytime | Nobody chooses this deliberately — it’s what you land on if you don’t remortgage when your deal ends |
Most first time buyers choose a fixed rate for the certainty, especially in the first few years when budgets are tight. Whatever you choose, put a reminder in your calendar for a couple of months before your fixed term ends — moving onto your lender’s SVR by default is usually the most expensive thing that can happen to you post-purchase.
Don’t forget the costs beyond the deposit
Buyers consistently underestimate the extra costs stacked on top of the deposit:
- Stamp Duty Land Tax (England and Northern Ireland) — first time buyers get relief up to a certain threshold, but check current rates on gov.uk as thresholds change
- Solicitor/conveyancing fees — typically £1,000–£1,500+
- Survey costs — from under £300 for a basic valuation to over £1,000 for a full structural survey
- Mortgage arrangement fees — some lenders charge these upfront or add them to the loan
- Removal costs, buildings insurance from exchange, and the inevitable first-month costs of actually living in the place
Budget an extra 1–2% of the property price on top of your deposit for these, so you’re not caught short in the final weeks.
The bottom line
- Get your Agreement in Principle before you start viewing seriously — it tells you your real budget, not an aspirational one.
- Check your credit report at least 3 months before applying, and fix anything obvious.
- Compare mortgage deals on total cost over the fixed period, not just the headline interest rate.
- Budget an extra 1–2% of the property price for fees, surveys, and moving costs beyond your deposit.
- Set a calendar reminder a couple of months before your fixed rate ends, so you never drift onto your lender’s standard variable rate by accident.
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