4 ‘costly’ mistakes first-time buyers make when applying for mortgage | Personal Finance | Finance

Making a house purchase is a big step in anyone’s life and a huge financial investment, so it’s important not to overlook these few things that quickly become common mistakes.

With so many moving parts involved in house buying, it’s easy for first-timers to fall into a trap of making costly mistakes. From deposits to credit checks and legal fees, there’s a lot to take in, and that’s why it’s important to be aware of the steps to take and save yourself money in the process.

James Mulvaney, Head of Digital at Clifton Private Finance, shared what he considers to be the most common mistakes first-time buyers make and advises on how best to avoid them. The biggest mishaps include:

Financial oversights

“One of the most common mistakes we see is buyers focusing purely on the deposit and forgetting about the other costs,” he explains. There are a number of key elements that are often forgotten about when it comes to budgeting.

These include:

• Solicitors’ fees

• Valuation charges

• Conveyancing fees

• Mortgage arrangement fees

• Removal costs

• Temporary renting costs (if your chain experiences a delay)

The expert explained: “We generally recommend setting aside around 15% of your new home’s value to cover any additional buying costs. According to Zoopla, the average additional cost when purchasing a home in the UK is around 5-7%, but a larger buffer ensures you’re prepared for anything unexpected.”

Credit score oversights

Another common mistake that people make when they first buy a house is not assessing their credit profile early enough. According to him, your credit score directly affects the rates and the products that become available to you.

He said: “Simple errors, like outdated addresses or missed payments, can be fixed, but only if you catch them early.”

Going straight to your bank

While loyalty is often used as a great marketing tool when it comes to banks, it’s important to remember that they are aiming to have as many customers as possible, using their in-house products. This means it may not be the best option for you, but it is certainly the most convincing, without looking around.

Mulvaney said: “If your bank advertises a loyalty rate, don’t overlook other lenders that might offer more competitive deals. Even a small difference can add up over time, leading to higher monthly repayments and potentially costing you thousands more over the course of your mortgage term.”

Giving up after the first rejection

It can feel disheartening when you’re rejected for a mortgage, but one no doesn’t mean that you’ll never get a ‘yes’ or are deemed ‘unmortgageable’. There are numerous reasons as to why you may face rejection, whether it’s meeting a lender’s affordability criteria or having a high debt-to-income ratio, or even potentially down to a low credit score.

He advises: “If this happens, it’s worth speaking to a broker to understand what went wrong and how to improve your chances next time.”

Mulvaney explained that first-time buyers also tend to underestimate how many stakeholders are involved. He said: “From agents and lenders to solicitors, surveyors, insurers, and inspectors,” which explains why many overlook the additional fees. Because purchasing a property is financially complex, even small details such as debt-to-income ratios or valuation discrepancies can derail an application.”

He further stated: “Some buyers can also be overconfident, assuming they can simply walk into their bank and secure the best deal. That’s rarely the case today, mainly as there are thousands of mortgage products on the market, and lenders’ criteria vary widely.”