First Time Home Buyer Guide: Simple Steps to Your First Home

If you’ve just started thinking about buying a house, the whole process can feel like a maze. You’re not alone – most people stumble over the same questions: How much can I actually afford? Which loan is right for me? Do I need a huge deposit? This guide cuts through the noise and gives you clear, actionable answers.

How Much Can You Afford?

The first thing to figure out is your realistic price range. Lenders look at a few key numbers: your annual income, existing debts and the size of the deposit you can skin up. A quick rule of thumb is the 28/36 test – you shouldn’t spend more than 28% of your gross monthly income on housing costs and no more than 36% on total debt payments.

Say you earn £36,000 a year. That’s £3,000 a month before tax. Applying the 28% rule, you’d aim for a mortgage payment around £840. With current rates around 6‑8%, that translates to a loan of roughly £150‑£170k, assuming a 10% deposit. If your salary is higher, like £100k, the affordable range jumps to about £400‑£450k with a similar deposit.

Don’t forget the hidden costs: stamp duty, solicitor fees, survey charges and moving expenses. Adding a buffer of 5‑10% of the purchase price for these items helps avoid surprise shortfalls.

Financing Options Every New Buyer Should Know

There’s more than one way to fund a first home. The most common route is a conventional mortgage, but you might qualify for government‑backed schemes that lower the deposit needed.

Help to Buy equity loan lets you borrow up to 20% of the property value (40% in London) while you provide a 5% deposit. You’ll still need a mortgage for the rest, but the loan is interest‑free for the first five years.

Shared ownership lets you buy a share of a property – often 25‑75% – and pay rent on the remaining portion. It’s a good fit if you can’t swing a full‑price deposit yet want a foot on the property ladder.

If your credit score is the stumbling block, aim for at least 620 for most standard mortgages. A higher score (720+) lands you better rates and lower monthly payments. To boost your score, clear any outstanding credit‑card balances, avoid opening new accounts a few months before applying and check your credit report for errors.

First‑time buyers also benefit from regional down‑payment assistance. Virginia, North Carolina and several other states offer grants that cover part of the deposit if you meet income and purchase‑price limits. These programs don’t need repayment, making them a pure win.

When you’re ready to shop, treat the process like a job interview. Interview multiple lenders, compare interest rates, fees and the flexibility of early repayment. A lower rate can save you thousands over the life of the loan, but a lender that’s quick to respond and offers clear guidance can be just as valuable.

Finally, get a professional property valuation and a thorough home inspection. They protect you from overpaying and uncover any costly repairs before the deal is sealed.

Buying your first home is a big step, but with the right numbers, the right loan and a little patience, you can turn the keys on a place that’s truly yours.