First‑Time Homebuyers: What You Need to Know Before Buying

Buying your first home feels like a huge milestone, but it can also feel like stepping into a maze. The good news? You don’t have to figure it all out on your own. Below you’ll find straight‑forward answers to the biggest questions most new buyers ask – from how much cash you really need for a deposit to what credit score will get you that $300k loan.

Understanding Down Payments

Most people assume a 20% deposit is the rule, but in reality the minimum can be as low as 5% for many government‑backed loans. If you’re eyeing a house around £200,000, a 5% deposit means £10,000 up front – a figure many first‑timers can reach with disciplined saving or help from a family gift.

Some lenders even let you put down less than 5% if you qualify for a shared‑ownership scheme. Those programs let you buy a share of the property (usually 25‑75%) and rent the rest, cutting the deposit requirement dramatically. Just remember, the smaller the deposit, the higher your monthly mortgage payments will be.

Another myth is the ‘10% down’ rule. It’s not set in stone. You can go lower, but you’ll pay for mortgage insurance, which adds to your monthly cost. Weigh the insurance premium against the benefit of moving in sooner.

Boosting Your Credit Score

The lender’s first look is at your credit score. For a typical £300,000 house, most banks want a score of at least 620, but the sweet spot is 700+. A higher score can shave a few percentage points off your interest rate, saving you thousands over the loan term.

Quick ways to improve your score: pay down any credit‑card balances, avoid opening new accounts a month before you apply, and correct any errors on your credit report. Even a 20‑point bump can make a difference.

If your score is lower than you’d like, consider a government‑backed Help to Buy or a low‑deposit mortgage that is more forgiving on credit. These options often have stricter income checks, so be ready to show steady earnings.

Speaking of earnings, many think a £30k salary is too low to own a home. That’s not always true. By targeting a modest‑priced property, using a 5% deposit, and factoring in any local assistance programs, you can still qualify for a mortgage. The key is to keep your debt‑to‑income ratio below 45% and budget for all monthly costs, not just the mortgage.

Finally, don’t overlook the extra costs: stamp duty, legal fees, moving expenses, and a small emergency fund for repairs. Add these to your savings plan early so you don’t get hit by surprise bills after you get the keys.

Bottom line: start by figuring out how much you can realistically save, check your credit score, and explore both traditional and shared‑ownership routes. With a clear plan, the first‑time buyer journey becomes a series of manageable steps rather than a scary leap.