11 common home buying mistakes and how to avoid them

1. Using up all your savings for a deposit 

A larger deposit can help you to access lower loan-to-value mortgages (which often come with more competitive interest rates). But squeezing your savings can have a big impact later down the line. 

It’s no secret that buying a house is expensive. You’ll need to factor in lots of different costs, from estate agent and solicitor fees right through to Stamp Duty and moving costs. And that’s before you start thinking about the expenses you’ll face after moving in, such as everyday bills, potential renovations or repairs. 

Stretching your finances can be risky, so you’ll need to work out a buying budget that covers all the associated costs - not just the deposit.

2. Waiting until you’ve got a 20% deposit

Many home buyers - particularly first-time buyers - believe they must save up at least 20% deposit before they can even think about buying a house. That’s not the case. Plenty of lenders offer higher loan-to-value mortgages with several 90% mortgages on the market. 

3. Overestimating your budget 

Get your property search off to a good start by understanding your budget. A mortgage in principle (MIP), often referred to as an agreement or decision in principle, tells you how much a lender may be willing to offer you. While a MIP is not a guaranteed mortgage offer, it does give you an idea of whether you’re likely to be able to borrow the money you need.

Understanding how much you might be able to borrow can help you to narrow down your property search. After all, falling in love with a home that you can’t afford is a bad move. You’ll either end up wasting time viewing properties you can’t afford, or try to significantly stretch your finances which can cause financial strain in the future.

4. Not looking beyond the look

It’s easy to get swept away by a home’s aesthetics and stunning decor, but you need to think carefully about the practicalities too. You’ll be living there every day for years, if not decades, so it’s important to make sure the property (and the area it’s in) suits your lifestyle. Take into account local amenities, crime rates and commuting times to make sure you’re happy with the area beyond your new home’s four walls. 

Look out for your future self, too. You’ll need to make sure the property will suit your long-term goals to avoid outgrowing it. For example, is there scope for extending the property in the future? Or is there currently enough room for any future additions to your family? While it’s important to find a home you love, it’s equally important to be realistic - allow your head to rule alongside your heart here!

5. Settling for the wrong property 

You’ll need a lot of patience if you’re moving home! And if you’re in a rush to buy (for example, you’re renting and coming up to the end of your fixed-term tenancy) you may be tempted to buy somewhere you know isn’t really right for you. 

It can be an expensive mistake if you then decide to sell up and move sooner than planned. For the average mortgage size (£234,292), mortgage exit fees could range up to £11,715 (5% of your remaining mortgage balance), and selling the property could add another £6,739 to the bill. 

You may find it helpful to press pause on your house hunt in order to recharge your batteries. Don’t worry too much about your mortgage in principle expiring - it should be quick and simple to get another one as long as your financial circumstances don’t change too much in the meantime.

6. Choosing a property a lender won’t like

Not many first-time home buyers are aware that some lenders won’t offer you a mortgage for certain properties. It’s well worth making sure you select a property that is most likely to be acceptable to lenders (or do your research to make sure your preferred lender is happy to offer mortgages on certain property types) to avoid hassle later down the line. For example, you may find it trickier to get a mortgage on:

• Properties above a shop or commercial premises (sometimes known as mixed-use properties)

• Homes of non-standard construction 

• Some types of flats (such as studio flats, high-rise flats or flats with short lease terms) 

• Properties that are uninhabitable or have severe structural defects (which might be desirable to buyers looking for a renovation project) 

• Properties with major development works planned nearby

• Ex-local authority housing

• New-build properties 

• Homes smaller than a minimum size (usually 30 square metres)

While it’s not impossible to get a mortgage on these types of properties, it could be significantly more difficult. You may well need the support of a mortgage broker if you’re considering buying a more complex type of property.

7. Rushing your property viewings

A property viewing gives you a chance to have a look around and imagine yourself living in the space. While it’s important to get a general feel of the home, now’s also the time to get stuck into the nitty gritty:

• Check for any signs of damp (such as peeling wallpaper or mould on the walls and ceilings)

• Test taps, showers and toilet flushes for any indications of plumbing problems

• Look for any immediate signs of damage to the roof and guttering (such as cracked tiles)

• Check the electrics work

• Inspect under counters and inside cupboards 

• Ask about the age of the central heating system

• Check windows and doors lock efficiently 

• Watch out for any condensation on the window panes that doesn’t wipe away easily

• Look out for natural light - plenty of natural light can make all the difference to a home, but it’s not something people often consider looking for during property viewings

Finally, think practically. Is it big enough to fit your furniture? Will the space suit your day-to-day needs? For example, the kitchen might look pristine and chic, but if there’s not enough room to fit a dining table, you could miss out on being the host with the most.

8. Forgoing a property survey 

It’s a common misconception that a basic property valuation covers any issues you need to know about when buying a home. However, a lender’s property valuation is pretty basic - the main goal is to make sure the property is worth what you want to buy it for. 

Only a full property survey will uncover all the issues you need to know about - but you’ll need to pay separately for this. The most comprehensive Level 3 Survey could cost up to £1,500 to complete. It could be worth its weight in gold though should the house survey highlight any problems (such as damp or dry rot). You may be able to ask the current seller to fix them in advance of you taking on the property or ask for a reduction in price. In some extreme cases, you may even decide to back out of the sale altogether which, while disappointing, may still be preferable to buying a home with significant defects. 

Of course, you’ll be able to ask questions about the property during your viewing (such as how old the property is, why the property is being sold and if previous owners carried out any major renovations) but it’s well worth getting a professional opinion too. 

9. Denting your credit score 

As well as assessing your affordability, a lender will look at how you’ve managed debts in the past to get a feel for how risky you might be as a borrower. 

It’s fairly standard advice to check your credit report in advance of applying for a mortgage, to make sure there are no errors or mistakes. But the importance of maintaining your credit score is often overlooked. 

Sure, you might be able to get a MIP or even a mortgage offer. But your lender could change or even rescind their mortgage offer right up until completion so it’s important to make sure your financial situation doesn’t change during the process.

10. Choosing a lender without comparing your options 

Applying for the first mortgage you find, or simply getting a mortgage directly from your bank or building society, might feel like the easiest route… but you could be missing out on a much better deal. 

There are lots of things to consider when getting a mortgage, including what mortgage type to choose, which deals come with arrangement/ product fees and how long to fix for. Speaking to a mortgage broker can help you compare your options and find the most suitable deal for your personal circumstances. 

11. Moving out before moving in

The home buying process can test your patience - particularly if you’re part of a chain. If you’re renting, it can be a good idea to aim for an overlap between moving out of your current home and buying your new one. This might mean you’ll be paying both your rent and mortgage payments for a month or two, but this could be a better option than needing to move out of rental accommodation before your property sale is complete. 

Remember, nothing is guaranteed. Your solicitor might give you an idea of an exchange date, but this can be delayed and could push back completion. Give yourself some breathing room so you’re not left without a plan B.