Buying your first home is an exciting step but it’s also one of the biggest financial commitments you’ll ever make. The process doesn’t have to be stressful or confusing. By avoiding common mistakes and preparing properly, you can secure your mortgage with confidence and step into homeownership smoothly.
In this guide, we’ll cover the most frequent first-time buyer mortgage mistakes, how to avoid them, and how to improve your chances of mortgage approval from the start.
Introduction: Navigating Your First Mortgage
Navigating your first mortgage can feel overwhelming, but it’s also an exciting milestone for first time buyers. The homebuying process is filled with important decisions, from choosing the right property to understanding your mortgage agreement. With so many complex terms and potential pitfalls, it’s easy to make common mistakes that could cost you money or delay your move onto the property ladder.
That’s why working with a knowledgeable mortgage broker can make all the difference helping you secure the best deal, understand your monthly payments, and ensure you can truly afford your new home. By taking the time to learn about the process and avoid the most frequent first time buyer mistakes, you’ll be in a stronger position to make your dream of homeownership a reality.
1. Not Checking Your Credit Report Early
Your credit score plays a major role in your mortgage eligibility. Many first-time buyers leave this until the last minute or worse, assume their score is fine.
What to do:
- Check your credit report with all four major agencies: Checkmyfile, Experian, Equifax, and TransUnion.
- Look for any errors, outdated information, or defaults that could impact your application.
- Register on the electoral roll at your current address to boost your score.
- Review your existing credit accounts and avoid opening new ones before your mortgage application.
- Avoid taking out new credit or missing payments in the 6–12 months before applying for a mortgage. Keeping your finances in good shape will improve your chances of approval.
2. Underestimating How Much You Can Borrow
It’s common to miscalculate how much mortgage you can borrow. Lenders look at income, outgoings, credit history, and other debts when deciding how much to lend.
What to do:
- Speak to a mortgage broker for help setting a realistic budget and affordability assessment.
- Use a mortgage calculator as a rough guide, but rely on professional advice for accuracy.
- Consider joint applications if you’re buying with a partner to increase affordability. Make sure all relevant costs are factored into your calculations to avoid surprises later.
3. Overlooking Government Schemes and Incentives
Many first time buyers miss out on valuable government schemes and incentives designed to make getting on the property ladder more affordable. These programs can help boost your deposit, reduce your purchase price, or offer more favourable mortgage rates yet they’re often overlooked in the rush to buy.
What to look out for:
- Help to Buy: Offers an equity loan for new-build properties, reducing the amount you need to borrow from a mortgage lender.
- Shared Ownership: Enables you to purchase a portion of a property while paying rent on the remaining share, helping to keep monthly costs more affordable.
- Lifetime ISA: Lets you save for your first home with a government bonus of 25% on your savings.
- First Homes Scheme: Provides new-build homes at a discount for eligible first time buyers.
It’s worth checking your eligibility for these schemes early in the homebuying process. A mortgage advisor or broker can explain which options suit your situation and help you factor them into your overall budget. Taking advantage of these incentives can make a big difference to your upfront costs and long-term affordability.
4. Not Getting an Agreement in Principle (AIP)
An Agreement in Principle (also known as a Decision in Principle, or mortgage promise) shows estate agents and sellers that you’re serious and financially viable.
Why it matters:
- You’ll stand out in competitive property markets.
- You can move quickly when you find the right property.
- It gives you a clear budget range.
Most lenders can issue an AIP within 24 hours. Your broker can help you find the most suitable one based on your circumstances.
5. Forgetting About Additional Costs
Many first-time buyers focus on the deposit and mortgage payments, but forget about stamp duty (if applicable), solicitor fees, surveys, moving costs, and broker fees (if not free). There are often other fees involved in buying a house that can add to the overall cost. This can derail the purchase if funds run short.
Costs to budget for:
- Deposit (usually 5–15% for first-time buyers)
- Legal fees (£1,000–£2,000 on average)
- Valuation and survey fees
- Stamp Duty (if purchase exceeds £300,000 in England)
- Moving costs (van hire, removals, storage)
- Other fees such as property surveys, which are essential to avoid unexpected expenses after paying for your new home.
- Broker fees (if applicable many brokers, like us, offer fee-free advice for first-time buyers)
6. Making Big Financial Changes Before Completion
Avoid applying for new loans, credit cards, or changing jobs just before applying for a mortgage or during the process.
Why this matters:
Lenders recheck your credit and income right before issuing your final mortgage offer. A sudden change can lead to delays, reduced offers, or even a declined application.
7. Not Using a Mortgage Broker
Many first-time buyers go straight to their bank, thinking it will be simpler. But this can mean missing out on more competitive rates or better lenders suited to your personal situation.
Benefits of using a mortgage broker:
- Access to exclusive mortgage deals not available to the public
- Independent advice across high street and specialist lenders
- Help with tricky situations (zero-hour contracts, gifted deposits, self-employed, etc.)
- Guidance on the application, paperwork, and communication with solicitors and agents
A broker saves you time, reduces stress, and helps you avoid costly mistakes.
8. Choosing the Wrong Mortgage Type
First-time buyers often default to the cheapest monthly payment without understanding whether a fixed-rate, tracker, or variable mortgage is the best long-term fit.
Key considerations:
- Fixed-rate mortgages offer stability and protect against rising interest rates.
- Tracker or discount mortgages can be cheaper upfront, but vary over time.
- Consider the length of the deal (2, 3, or 5 years) and early repayment charges.
Your broker will help match your lifestyle and goals to the right mortgage product.
9. Not Getting a Full Property Survey
Some buyers rely solely on the lender’s valuation, but this only assesses the property’s value not its condition. Ignoring property surveys to save money is one of the biggest mistakes first-time buyers can make, as it can lead to costly repairs down the line.
Types of surveys:
- Mortgage valuation (basic – required by lender)
- Homebuyer Report (more detailed, suitable for most standard homes)
- Full Building Survey (for older or unusual properties)
Investing in property surveys can help you avoid expensive surprises like damp, structural issues, or roof damage.
10. Overlooking Buildings Insurance and Protection
Arranging buildings insurance is a crucial step that many first time buyers forget until the last minute. Most mortgage lenders require you to have buildings insurance in place from the day you exchange contracts, as it protects your new home against risks like fire, flood, or structural damage. Failing to arrange this can delay your completion or even put your mortgage offer at risk.
Don’t forget:
- Buildings insurance is usually a condition of your mortgage agreement, your lender will want proof before releasing funds.
- Consider contents insurance to protect your belongings, and life or income protection to cover your mortgage payments if your circumstances change.
- Shop around for the best deal, and check what’s included in your policy, some lenders charge an arrangement or booking fee if you use their recommended insurer.
Protecting your investment with the right insurance and protection policies gives you peace of mind and ensures you’re covered for unexpected events from day one in your new home.
Assuming All Deposits Are Treated the Same
If you’re using a gifted deposit, lenders will require written confirmation of where the money is coming from. Failing to declare a gifted deposit can delay or collapse the mortgage offer.
What to prepare:
- A formal letter from the person gifting the deposit
- Proof of the source of the funds
- Bank statements showing the transfer
Your broker will walk you through these requirements ahead of time.
Rushing the Process
Buying your first home is exciting but rushing can lead to poor decisions. Taking the time to plan and work with professionals can save you money and hassle in the long run.
Tips for a smooth process:
- Get your documents ready: ID, proof of deposit, income evidence (payslips or accounts)
- Take time to research the local area, including recent sale prices, amenities, and public transport options. Consider all factors that could affect your enjoyment and the practicality of your new home.
- Be realistic with your budget
- Communicate regularly with your broker and solicitor
- Don’t panic if delays happen they’re common
Neglecting Your Long-Term Financial Stability
It’s easy to focus on getting your mortgage approved and moving in, but many first time buyers overlook the importance of long-term financial stability. Mortgage rates and your personal circumstances can change over time, so it’s vital to think beyond the initial monthly payment.
Plan for the future:
- Consider how an interest rates rise could affect your monthly payments and overall budget.
- Factor in potential life changes, such as starting a family, career moves, or changes in income when choosing your mortgage term and type.
- Make sure you have a financial buffer for extra costs, repairs, or periods of reduced income.
A mortgage advisor can help you assess your current situation and choose a mortgage that fits your long-term goals. By planning ahead, you’ll avoid common pitfalls and ensure your new home remains affordable for years to come.
Finalising the Mortgage: What to Expect Next
Once your mortgage application is approved and you receive your mortgage offer, you’re nearly at the finish line, but there are still a few important steps before you get the keys to your new home.
Here’s what happens next:
- Your solicitor will review the mortgage agreement, handle legal checks, and arrange for the transfer of funds.
- You’ll need to pay any outstanding fees, such as the arrangement fee, booking fee, or legal fees.
- Make sure your buildings insurance is in place and provide proof to your mortgage lender.
- Agree on a completion date with the seller and your solicitor.
- On completion day, your solicitor will transfer the purchase price to the seller, and you’ll receive the keys to your new property.
Staying in close contact with your mortgage broker, solicitor, and estate agents during this stage will help ensure a smooth and stress-free completion. With all the right steps in place, you’ll soon be ready to move into your first home and start the next exciting chapter of your life.
Make Your First Mortgage a Smart One
Buying your first home doesn’t have to be overwhelming. By avoiding common first-time buyer mistakes and seeking expert advice, you’ll navigate the process with clarity and confidence.
From understanding affordability and credit checks to choosing the right mortgage product and budgeting correctly, it pays to get it right from the start. Fully understanding the differences between leasehold and freehold properties is also crucial for making informed decisions.
Get help from an experienced mortgage broker.
You can speak to one of our specialist mortgage brokers who would be able to guide you through the process. They will advise if there is a lender available and the maximum loan amount based on your circumstances. We are a whole of market mortgage brokerage with access to all lenders. Call us on 01332 470400 or complete the form with your details for us to give you a call back.
