Buying a home is, for most people, the biggest financial commitment of their lives. As prices have boomed across Britain over the past three years, the costs – and stress – have increased in equal measure. Homes in some parts of the country are now three times as expensive as five years ago.

How much can I borrow?

The amount you will be able to borrow is at the discretion of the lender. Traditionally, you could borrow 3 to 3.25 times your earnings if you bought on your own; 3 to 3.25 times the main income plus 1 times the second income if you buy with someone else; or 2.5 to 2.75 times the total of your joint earnings if you buy with someone else. These multiples have increased as property prices have soared across the country, with some lenders offering up to five times an individual’s salary.

Self-certification mortgages have also been introduced. You do not have to provide proof of your earnings to a mortgage company, making them a suitable product for the self employed and freelancers, but research has shown that in a rising market buyers are being tempted to borrow much more than the recommended 3.25 times limit. Be warned that interest rates are at their lowest level for around 50 years, and could always go up, so don’t exceed your ability to repay your loan.

Are there hidden extras?

Yes. Buying a home will inevitably cost more than you think. As well as the mortgage, you need to put money aside for:

• Legal fees - from £400
• Land registry fee - £100
• Other searches - £70
• Local authority search fee in London - £100
• Rest of England and Wales - £60
• Stamp duty – homes sold for less than £60,000 - nothing
• Homes sold for more than £250,000 - 3% of purchase price
• Homes sold for more than £500,000 - 4% of purchase price
• Survey – mortgage valuation survey - £170
• Homebuyers’ survey - from £200
• Full structural survey - from £270

You also need to be aware of your home's running costs. You will have to pay for buildings insurance, gas and electricity bills, council tax and water rates, perhaps service charges and ground rent.

Can I find a bargain?

That depends on your point of view. Don’t be swayed by emotion. If you find a place you like, ask to see it again, and go round with someone you trust to get a second opinion. On the second visit be methodical and take notes if you like. Don't be sidetracked by colour schemes or furnishings - these are superficial and can be changed. If you want a wreck that you can restore, or do large scale building work in, be realistic about how much this will cost. Get an expert to go with you and quote. Check if there is central heating. Be aware that a house with no furniture can look deceptively large. Ask the seller how much council tax bills are, and if there are any service charges.

How do I put in an offer?

Opening offer determines final selling price, so work out where you want to finish before you start. If the house is selling for £90,000 and you can afford to pay £85,000, offer £80,000. If the bid is refused, add £1,000 more at a time until you reach an agreed price. If, however, you think the house is a steal or undervalued, or in a housing hotspot when several people could be after the property - act fast. Say then and there that you want it, on condition that the seller takes the house off the market. This makes gazumping - when another buyer comes in with a higher offer - less likely. Say you'll buy it on condition that a survey is done and the property shows no serious faults. But don't let emotion get in the way. If you can't strike a deal at a price you want - walk away.

Where do I go for a mortgage?

It really pays to shop around. Beware of estate agents who offer you financial services or agree to set up a mortgage for you. They will be tied to a life insurance or mortgage firm and will only be offering products from that company. They might not be suitable for you, and you'll also have to pay the salesman a hefty commission.

What happens next?

You need a solicitor to do conveyancing. This means checking the legal aspects of the sale: that the seller has the legal right to sell the property, that no one has right of way over it and that there are no land disputes. Your solicitor also undertakes the local authority search to ascertain if future development is planned that could affect the property. Personal recommendation is the best way to find a solicitor.

Which type of survey should I choose?

Your mortgage company needs to know that the property is worth what you're paying for it. You want to know whether your home has problems that could cost you thousands to put right in the future, for example, subsidence, dry rot or a decaying roof.

There are three types of survey. A mortgage valuation will cost you about £150. This is a cursory affair and simply tells the lender that if you were to default on the payments it would be able to sell the property and get its money back. It won't spot major faults.

A homebuyer's survey is far more thorough. This will cost about £300 and should reveal any serious defects. It can even save you money, as one in four people who have a homebuyer's survey go back and renegotiate the price. Nearly half save more than £1,000.

The third option is a full building survey, which goes into the condition of your property in even greater detail. This is recommended for older properties or unusually designed ones. It costs from £250 to £1,000. Be prepared for a lot of technical jargon in the survey, rather than any hint that you are making a brilliant buy. If the survey suggests big problems, you could ask for the house price to be cut. But if it is OK, your lender should then be prepared to give a formal mortgage offer.

The next steps...

When contracts are exchanged between you and the seller - a process carried out by lawyers - both parties are committed to the deal. If you pull out, for whatever reason, you will lose your deposit (which could be anything from a few per cent of the property’s value to 50%). Conversely, the seller cannot accept a higher offer. This is also when the completion date - when you get the keys and can move in - is set. Typically, this is four to eight weeks later, but could be as little as a few days.