Buying your first home

These days most mortgage lenders calculate the amount they're prepared to lend based on affordability. So they'll look at your household income and take into account your regular financial commitments, such as credit card and loan repayments.

Your mortgage payment is likely to be one of your largest regular financial commitments so you'll want to make sure it's within your budget. Remember that when you buy a home you'll have other financial commitments as well – including council tax, utility bills and home insurance. Make sure you don't stretch your finances to the limit.

• Find out about the costs of a RBS mortgage

For many of us, our ideal home is the one that's just beyond our reach. We can always dream but most of the time home buying decisions are driven by what we need and what we can afford.

So think about the features that are essential to you: the number of bedrooms, off-street parking, access to work and transport links, and closeness to local amenities like shops and schools. And keep a separate list of features that are desirable, such as a garage or garden. When you see a house, give it a score based on your lists.

Remember, larger, older houses cost more to heat and might mean higher Council Tax. Newer houses are generally cheaper to maintain for the first few years.

Speak to as many local estate agents as possible and ask them to send you details of properties on a regular basis. You can also search yourself, using local newspapers and the Internet.

• More information of types of mortgages

When you take out a mortgage, you need to pay interest on the amount you borrow, and you have to pay back the initial loan.

It's a good idea to speak to your lender before you start looking for a home. Then you'll have an idea of how much you can borrow and what type of house you can afford.

Once you've found a place you like, get your mortgage arranged as soon as possible. It can take a few weeks to arrange a mortgage so don't delay or the seller might decide it's better to sell to someone else.

The size of the mortgage you're offered will depend on your income, employment status, your other financial commitments and the size of deposit you can provide. Mortgages come with features and conditions, so make sure you understand them before you make a commitment. These include:

• Early Repayment Charges – if you move lender or change product when you are still within the initial deal period, e.g. in year one of a two year fixed rate deal.
• Repayment holidays/underpayments – remember that interest will continue to accrue during any payment holiday or period of underpayment and your monthly payments may increase afterwards.
• Overpayments – pay more towards your mortgage to reduce your mortgage balance. There may be limits on the amount you are allowed to overpay, e.g. 10% of the outstanding mortgage balance per year.
• Cashback offers – some mortgages may include an incentive amount that is normally payable to you on completion.

• More information on types of mortgage

Because you're a first-time buyer, you don't have to sell a house before you can move. This puts you in a stronger buying position and could help speed up the buying process. But you'll still need a good solicitor, or conveyancer, to make sure that the property is legally yours.

Your solicitor will obtain all the legal documents, including a contract for sale and an inventory list from the seller. This tells you exactly what is included in the purchase price - such as carpets, curtains or kitchen appliances. A solicitor will also confirm the property's legal boundaries.

Once everything is in order, your solicitor will search local planning information to check there are no planned developments that could affect the property's value. Finally they will discuss the contract for sale with you and help you to arrange a date to exchange contracts and complete the sale.

Once you've found the property you want to buy, it's time to put in an offer, through the seller's estate agent. Remember, the asking price is how much the seller hopes to get for the property - not necessarily how much they realistically expect - and your first offer can be below the asking price.

Once you've made an offer, it's up to the seller to accept or reject it. Other buyers may be putting offers in at the same time, so it's a good idea to research the price of similar properties, or you may find yourself caught in a bidding war. If the seller rejects your first offer, you can always put in a higher one later.

If your offer is accepted, the estate agent will confirm it in writing. However, this is not legally binding and you could still lose the property if another buyer offers a higher price and the seller agrees to it. This is known as gazumping.

As a first-time buyer you have the advantage of not having to sell another property before you move into your new home. So you're not caught up in the 'chain', although you may be the last person in the chain. Many sellers want to sell their property quickly, and your situation will be very appealing to them.

Once your offer has been accepted, you'll need to arrange a property survey, to assess its condition and value. Your mortgage lender will arrange for a basic property valuation to be carried out. You'll have to pay for this. This isn't a survey, just an estimation of the property's value. You might want to arrange for a detailed survey, especially if you're buying an older house.

The basic survey, (Home Buyers Report) only covers the parts of the property that are easily accessible or visible. A full structural survey is more in-depth and can unearth problems that could be costly in the future. If the survey does reveal serious problems, you can withdraw your offer on the property.

Be prepared to budget for more than one survey during your home buying process, in case the first sale falls through. The Royal Institute of Chartered Surveyors or the Incorporated Society of Valuers and Auctioneers will be able to provide you with details of surveyors near you.

If the survey was satisfactory – to you and your lender – you can make a formal offer on the property. Before you do this, it's a good idea to read carefully through the terms of your mortgage, asking for an explanation of anything you don't understand.

Your solicitor should have already agreed the terms of the contract for you and the seller to sign. This contract is legally binding once you sign it, so make sure you're completely happy. On exchange of contracts, you normally need to put down a deposit of 5% to 10% of the house price. The date agreed for the actual sale will be inserted into the contract before exchange.

Once you've signed contracts you must insure the building, as you are now legally obliged to buy it.

Once the contract is signed, you're legally bound to pay for the property on the agreed date. All you have to do now is to arrange to move in.

Make sure you're fully prepared before you move, with your possessions boxed up and clearly labelled. You may want to hire a removal firm to help you.

Don't forget:

• Tell your old gas, electric, water and telephone suppliers that you're moving out
• Tell your new utilities suppliers that you've moved in
• Let the council know about your move so you don't pay Council Tax at your old address
• Think about having your mail redirected from your old address

Once you've moved in there are a couple of extra things that you should take care of. After the first month, check that you're paying the right mortgage repayment amounts at the right time. And make sure your important documents are carefully filed away. They're your main record of your purchase and your mortgage and you may need them in the future.