Buying a home in the UK is no easy feat, as property growth continues to rise across the nation. 

For first-time buyers, second-steppers or downsizers alike, there are some key mistakes which could cost thousands if ignored.

But what are and how can you avoid them?

In the very first episode of the Investing Insiders Podcast, I chatted with Financial Content Creator, Gabriel Nussbaum, to break it all down.

Here are four common mistakes that first-time buyers especially should avoid:

1) Not running the numbers 

It’s vital to work out how much you can afford and how long it will take you to reach your property goal. 

This is particularly important for first-time buyers who might need more time to build up a house deposit. 

Gabriel shared: “If you’re a prospective home buyer or thinking one day you’d like to buy a property, I would say, start running the numbers now. Awareness is your most powerful tool.”

Failing to work out how much you need could mean you don’t save enough to get on to the property ladder while costs still rise. 

2) Assuming the Lifetime ISA is right for you

First-time buyers looking to give their savings a boost might be tempted to use a Lifetime ISA for the government bonus. 

However, it’s vital to consider whether the product is truly right for the property being considered. 

Currently,  there’s a hefty 25% fee for using it to buy a property over a certain value, which could drastically eat away at anything built up in the account. 

Gabriel said: “I say to anyone that opens a lifetime ISA product right now, be 100 % sure that that property is going to cost under £450,000. Like that, simple as all you’re happy for the money to go towards retirement, of course, but really be certain.

“I think if I went back to 18-year-old me and said, are you 100 % certain that that money is going towards a £450,000 property? I would probably have answered by saying no.” 

3) Forgetting extra fees 

There are a lot more costs than meet the eye when it comes to buying a home. Forgetting to set enough money aside could catch a lot of buyers out. 

But it’s crucial to set money aside for key parts of the process, such as Stamp Duty, getting a house survey, legal fees, moving costs and even setting money aside for furniture once you move in.

These can all add up very quickly and take people by surprise if they’re not prepared.

Getting an estimate or quote for as many of these costs as possible will put you ahead of the curve and in a stronger financial position when purchasing a home.

4) Ignoring your credit history

Your credit history plays a fundamental role in the mortgage deals you can access and how competitive the interest rate is. (Which could affect the amount of debt they take on. )

Think of your credit history as a financial fingerprint that shows lenders how well you manage paying back money.

A good credit history can help you unlock competitive interest rates and mortgage deals, which could save you money in the long term.

So it’s important to check yours before applying for a mortgage. And where possible, take steps to improve it – particularly if you have a poor credit history or none at all. 

Simple steps that can help boost your score include registering on the electoral roll, using less than 30% of your total credit allowance and keeping up with your debt repayments. Even if it’s a mobile phone contract or insurance direct debits. Every little helps. 

Want to hear more?

Check out the full episode The Truth About Buying a Home with Gabriel Nussbaum on Spotify and Apple Podcasts.