Buying your first home can be a daunting process, from the excitement of finding a property you love to the worries of waiting for your mortgage to go through and the long wait for the legal work to be completed.
Taking your first step on the property ladder is a journey, but we're here to help you navigate the twists and turns and help you purchase your first home in 2021.
This means that for a home costing £200,000, you'd need a deposit of £20,000 rather than £10,000.
You can use our deposit calculator below to discover how long it might take you to save enough to buy your first home.
Interest rates on savings are at rock bottom, but the government has an initiative in place to help you grow your deposit and buy your first home more quickly.
A lifetime Isa allows you to save up to £4,000 each year until you're 50. For every £4 you save, the government will add a £1 bonus to your savings. This means you could get an extra £1,000 each year.
Bear in mind if you make withdrawals before you're 60 for something other than buying a home, you'll face a penalty on the amount you withdraw.
We've looked at how much you might need to save, but the other crucial element is how much you'll be able to borrow when applying for a mortgage.
This means that if you're buying a home with your partner and you earn £40,000 a year between you, you might be able to borrow around £180,000.
As we mentioned earlier, the withdrawal of 95% mortgages is a big blow for cash-strapped first-time buyers, but the good news is that some of the biggest lenders have now relaunched their 90% deals.
If you'll struggle to save a 10% deposit, you could consider schemes such as Help to Buy or shared ownership (more on these shortly), or you could ask a family member if they will act as a guarantor for your mortgage.
usually involve a parent or grandparent using their savings or property as collateral, but other alternatives include joint mortgages or joint borrower, sole proprietor deals. It's worth taking advice from a , who can explain the pros and cons of these different types of deals.
Help to Buy and shared ownership are two of the most common options for first-time buyers struggling to save a house deposit - but both come with some pitfalls.
allows you to purchase a with a 5% deposit, by taking out a 20% loan from the government and getting a mortgage for the remaining 75%. Help to Buy has faced criticism for , but it is set to be from April 2021.
allows you to buy a share of 25% to 75% in a property (usually a leasehold flat) and pay rent on the remainder. It can be a good way of getting on the housing ladder in expensive cities such as London, but the combined costs can be very high, and there are of some blocks.
Getting your mortgage agreement lined up before you start looking at properties can be helpful for two reasons: it clarifies your budget, and it can prove that you're a serious buyer.
An 'agreement in principle' usually requires a 'soft' credit search and is essentially a statement from a lender of how much they'll be willing to let you borrow to buy a home. It's an important step but isn't a guarantee - your mortgage won't be locked in until you've had an offer accepted and formally apply.
Again, it's worth taking advice from a mortgage broker, who will be able to look at all the deals on the market and get you an agreement in principle.
Choosing your first property is one of the more exciting steps in the home buying process. Now you're armed with your agreement in principle, you can spy out the areas where you'll be able to afford a property. If you're buying in England, you can use our to learn more and compare different towns.
Do your research into the local property market and check out our (or our guide on if you're looking for a new-build) before heading to viewings to give yourself the best chance of sorting the wheat from the chaff.
After you've had your offer accepted, you can return to the mortgage lender to formally apply for your home loan.
Now, the boring bit. Once your offer has been accepted, you'll need to employ a to sort out the legal aspects of the move. You'll also need to have a done to ensure there are no significant issues with the property.
The conveyancing process can take a number of weeks to go through, especially in the current climate, so manage your expectations over when you'll be able to get the keys.
Once the process is nearing conclusion, your conveyancer will work with the seller's solicitor to set a date to exchange contracts and complete the purchase.