Can I Get a Mortgage as a First-Time Buyer?

Buying your first home is a major milestone, but securing a first-time buyer mortgage can feel overwhelming. The good news is that lenders want to work with first-time home buyers, and there are steps you can take to improve your chances of approval. This guide will walk you through what you need to know, what might cause issues, and how first-time buyers differ from other mortgage applicants.

 

What Makes First-Time Buyers Different?

Unlike existing homeowners, first-time home buyers don’t have a property to sell, which can be a major advantage. Sellers and estate agents often prefer first-time buyers because they don’t have a chain, making transactions quicker and less likely to fall through. However, first-time buyers also face challenges, such as needing to prove affordability without a history of homeownership.

Lenders assess first-time buyer mortgage applicants much like other borrowers but may scrutinise spending habits more closely. With no prior mortgage history, they rely heavily on income stability, credit history, and financial behaviour.

 

Steps to Maximise Your Chances

 

1. Build a Strong Deposit

While some lenders offer 95% mortgages, a bigger deposit improves your options. If you can save at least 10%, you will have access to better mortgage deals with lower interest rates. Those able to put down 20% or more get better rates.

How Klink Can Help: Klink’s home goal feature allows you to plan deposit savings, set a timeline, and track progress while identifying areas where spending could be adjusted to reach your goal faster.

 

2. Improve Your Credit Score

Lenders assess your credit history to determine whether you are a reliable borrower. A strong credit score helps secure better first-time buyer mortgage rates.

Key Steps:

• Check your credit report with Experian, Equifax, or ClearScore

• Ensure you’re registered on the electoral roll

• Avoid missed payments on credit cards or loans

• Keep credit utilisation below 30%

• Don’t apply for new credit just before a mortgage application

How Klink Can Help: Klink’s mortgage readiness tool flags potential issues in your banking conduct that could impact your mortgage application.

 

3. Reduce Your Outgoings

Lenders analyse bank statements to understand your spending habits. High discretionary spending, frequent use of overdrafts, and Buy Now Pay Later schemes may raise concerns. Three to six months of sensible spending before applying can make a significant difference.

How Klink Can Help: The app provides insights into spending habits using open banking, helping users adjust finances before applying for a first home mortgage.

 

4. Secure a Mortgage in Principle

A Mortgage in Principle (MIP) gives you an estimate of how much you can borrow and reassures estate agents that you are a serious buyer. This is usually a soft credit check and does not commit you to a lender.

 

5. Choose the Right Mortgage Type

Many first-time home buyers opt for fixed-rate mortgages, providing stability with set monthly payments. Other options include:

• Tracker mortgages - following the Bank of England base rate, meaning payments can fluctuate

• Discounted variable mortgages - offering lower initial rates but changing over time

 

6. Consider Government Schemes

First-time buyers can benefit from schemes such as:

• Lifetime ISA (LISA): A savings account offering a 25% government bonus

• First Homes Scheme: Discounted new-build homes for eligible buyers

• Shared Ownership: Buy a percentage of a home and pay rent on the rest

 

7. Prepare for the Application Process

Lenders require documents to verify income and spending, including:

• Payslips or tax returns (for self-employed applicants, requirements vary depending on the lender)

• Three to six months of bank statements

• Proof of deposit

• Identification documents (passport or driving license)

 

What Could Cause Issues?

Low Credit Score

Missed payments, defaults, or high credit utilisation may lead to higher interest rates or rejection.

 

Unstable Income

Self-employed applicants may need to provide additional proof of income, with many high-street lenders requiring two years of accounts. However, some specialist lenders accept one year of accounts or alternative forms of income verification.

 

Too Much Debt

Outstanding personal loans, car finance, and credit card balances can reduce how much a lender is willing to offer.

 

High Living Costs

Lenders will assess your regular outgoings, so childcare costs or student loan repayments could impact borrowing power. High gambling spend or other regular lifestyle expenses could also cause further issues.

Read more: 10 Surprising Reasons Your UK Mortgage Application Got Rejected and How to Fix Them

 

Ready to Take the Next Step?

Getting a first-time buyer mortgage doesn’t have to be daunting. With careful planning, responsible financial habits, and the right tools, you can improve your chances of securing the best deal.

Download Klink today to track savings, analyse spending habits, and ensure you’re financially prepared for homeownership.