Tips for First-Time Buyers 💡
Navigating the mortgage process as a first-time buyer can be smoother with the right preparation. Here are practical tips to improve your chances of success in 2025.
Boost Your Credit Score
Pay off credit card balances, avoid late payments, and register on the electoral roll. A score above 800 (on Experian’s scale) can secure better rates—say, 4% instead of 4.5%, saving you £100 monthly on a £200,000 loan.
Save a Larger Deposit
.Aim for at least 10%—£25,000 for a £250,000 home. A 15% deposit (£37,500) can unlock rates as low as 3.8%, reducing your payments by £50 a month compared to a 10% deposit.
Use a Mortgage Broker
Brokers have access to deals not available directly, like exclusive rates from smaller lenders. They can also negotiate on your behalf, potentially saving you thousands over the mortgage term. Expect to pay £500-£1,000 for their services, though some offer fee-free advice.
Explore Government Schemes
A Lifetime ISA can boost your deposit with a 25% government bonus—save £4,000, get £5,000 total. Shared ownership reduces the deposit needed, ideal for high-cost areas like London.
Budget for Extra Costs
Set aside 1-3% of the property’s value for fees (e.g., £2,500-£7,500 for a £250,000 home). This covers legal fees, surveys, and moving costs, ensuring you’re not caught short
Lock in a Rate Early
With interest rates fluctuating in 2025, securing a fixed-rate mortgage (e.g., 5 years at 4%) protects you from potential rate hikes, giving you payment certainty.
These steps can make the difference between a rejected application and moving into your dream home.
Case Study: A First-Time Buyer’s Journey in Manchester
Meet Sarah, a 28-year-old teacher earning £35,000 annually, looking to buy her first home in Manchester in 2025. She had £15,000 in savings and used a Lifetime ISA to get a £1,000 government bonus, bringing her deposit to £16,000. Sarah found a two-bedroom flat listed at £200,000 and made an offer of £195,000, which was accepted.
With her income, Sarah qualified for a mortgage of £175,000 (5 times her salary), covering a 90% LTV mortgage with her £20,000 deposit (after adding some extra savings). She opted for a 5-year fixed-rate mortgage at 4.2%, resulting in monthly payments of £835. Her lender charged a £999 arrangement fee, which she added to the loan, and a £350 valuation fee. Legal fees and searches totalled £1,800, and since the property was under £425,000, she paid no stamp duty.
Sarah worked with a mortgage broker who found her a deal with a high-street lender, saving her 0.3% on the interest rate compared to going direct. The process took six weeks from application to completion, and she moved into her flat in March 2025. Sarah’s story shows how preparation—saving for a deposit, using government schemes, and getting expert advice—can make homeownership a reality, even in a competitive market like Manchester.
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Disclaimer
The Content above is for guidance purpose only. While we make every effort to keep the information current and correct, we do not make representations of any kind. Professional advice should be sought, before entering into any legal contract and purchasing a property.