If you’re in the market to buy a new house, it’s much more than just browsing property listings and looking for one that’s within your budget. You need to build a strong financial foundation so you can move with confidence when you finally find the perfect property. If you get organised early, it can save you months of stress and prevent costly surprises. From deposits and credit scores to legal fees and documentation, here are the practical steps you need to take to position yourself for a stronger mortgage application and a smoother buying journey toward the home of your dreams.
Calculate and build your deposit
If you’re like most first-time buyers these days, pulling together the deposit will be your biggest hurdle. Most mortgage lenders require at least 5–10% of the property price (though if you can put down more, you can secure better interest rates). Work out your target based on typical property values in the area you want to live in, then build an automated monthly savings plan so you can ‘set and forget’ as your down payment builds up. And if you’re under the age of 40, check whether you’re eligible for a Lifetime ISA (LISA) – it offers tax advantages as well as a generous government bonus on contributions toward your first home.
Optimise and maintain a strong credit score
Your credit score heavily influences the mortgage rates that lenders will offer you, which in turn can lower your overall mortgage cost. Review your credit file with each of the major credit companies and immediately resolve any inaccuracies or missed payments. If you need to build up your credit profile, consider using a credit card builder to boost your score ahead of your mortgage application. All you need to do is make a couple of small transactions (a few grocery items, for example) and pay them off in full each month to demonstrate reliability.
Lower your DTI by reducing high-interest and unnecessary debt
It’s also important to cut any costs that undermine your borrowing power. Mortgage lenders will assess your debt-to-income ratio (DTI) to see how much of your gross monthly income goes to debt. A high DTI makes you look like a risky bet, so lower it by quickly paying off high-interest debts such as credit cards or personal loans.
A mortgage application is also a notoriously paperwork-heavy process – requiring extensive documentation of your income and overall financial stability. Start assembling all this information early to make the process smoother. You’ll need payslips, P60s, bank statements (the last six months), and proof of any variable or self-employed income.
Legal fees and moving costs: Budget for extra expenses
The deposit and remaining purchase price of your new home is not the only expense you need to prepare for. You will also need to pay legal fees to a conveyancing solicitor, survey costs, removals and mortgage-related charges. Set aside an extra 3–5% of the property price for these costs.
Prepare your money now for a smooth property purchase
Buying a property is a stressful journey even at the best of times. But it’s far less daunting if you structure, document and future-proof your finances in advance. By saving consistently, strengthening your credit profile, reducing expensive debt and planning for hidden costs, you can house-hunt with a clear head and secure the home you really want.