Buying your first home is a big decision and it can be daunting. That’s why we have a first time buyer mortgage guide to help you understand the process better. We want you to make a smart choice, so please read the whole guide carefully before deciding. If you need more help or have any questions, please contact us. We’re here to help!
A Step-by-Step Guide to First-Time Buyer Mortgages in the UK
Who is a First Time Buyer?
If you’ve never bought a property before, then you are a first-time buyer. That’s right – this covers single people and couples who have never owned a home.
First-time buyers can benefit from mortgage terms that others don’t qualify for.
Schemes like Shared Ownership and other lender-based schemes can also help buyers get on the property ladder.
To start your homeownership journey, it’s important to research all possible options before deciding
First Time Buyer Deposit
Usually, you need a deposit of at least 5% of the property price you want to buy. For example, if you want to buy a home for £150,000, you need a deposit of at least £7,500 (5%).
The bigger the deposit, e.g., more than 5%, the more mortgage lenders you can access who may offer a lower interest rate.
Mortgage Advice..
Do you want a mortgage? Need advice on the best mortgage deal? Our expert team of mortgage advisors can help you with the advice and support you need. Contact us today for a free mortgage consultation and find out your options for a safe future. We know a lot about mortgages and we’ll make sure you get the right mortgage for you. Contact us now.
Mortgage for Adverse Credit for a First Time Buyer
It can be more difficult for first-time buyers with a history of credit issues to secure a mortgage. However, it is still possible. They may need to provide a larger deposit or accept a higher interest rate. Credit issues include missed credit card payments, outstanding debts, or court orders requiring payment.
If the issue occurred a long time ago, it may have less impact. For example, if it happened over six years ago. If it was more than three years ago, there may be good mortgage deals available. However, if the issue is recent, securing a mortgage will be harder. You may need a larger deposit or face higher interest rates.
Get an interest-only mortgage if you're a first-time home buyer.
An interest-only mortgage allows buyers to pay only the interest each month, keeping payments lower. Buyers need a plan to pay off the principal at the end of the term.
This option is often only available to high-income borrowers. Another option is to choose the longest mortgage term available, up to 40 years, lowering monthly payments but increasing overall interest paid.
First Time Buyer Mortgage Advisor
A first-time buyer mortgage advisor offers guidance throughout the home-buying process. They help buyers understand options, compare lenders and products, improve credit scores, save for deposits, submit applications, and review legal documents.
With their support, first-time buyers can gain knowledge and confidence in the home-buying process. This improves their chances of securing a suitable mortgage.
How a Mortgage Broker Can Help in Different Situations
First Time Buyer Mortgage Advice
If you are buying a house for the first time, follow these tips:
- Check your credit score to see where you stand.
- Research mortgage providers and choose one that suits your needs.
- Set a budget based on what you can afford to repay each month.
- Secure a mortgage agreement in principle to show sellers you are a serious buyer.
- Speak to a mortgage adviser to ensure you make informed decisions.
Following these steps will help you find the right mortgage with confidence.
Ensure you have enough money to pay your monthly expenses.
Nowadays, many mortgage calculators can help you work out how much you can borrow. Different lenders have their own criteria for approving applications. Some may overlook a missed utility bill payment from a couple of years ago, while others may not.
County Court Judgement (CCJ)
Even if a lender considers an application with a County Court Judgment, they may still need further details. This could include the amount, reason, and a clear explanation of the situation. Seeking advice from a qualified independent mortgage broker can save time and reduce stress.
A general rule for employed applicants with a clean credit record and at least 12 months in their current job is to expect a loan 4.5 times their salary. However, it is crucial to ensure the repayments are affordable each month, considering everyday expenses such as food, gas, and electricity. Planning a budget before starting the property search is always advisable.
What’s the Next Step?
If you’re a first-time buyer and want to purchase a home, you should start by researching the market and lenders. This will help you understand the different options you have for getting a mortgage.
You should also work out how much you can afford and be aware of any fees that come with buying a home.
Before you start looking for a home, you should get pre-approved for a mortgage so that you can be sure you have the money you need to buy a home. With these steps taken, you’ll be ready to find a home you love and start your journey to becoming a homeowner.
FAQ (Frequently Asked Questions)
If you’ve never owned property before, you can usually get a first-time buyer mortgage. But, some lenders may still consider you a first-time buyer if it has been many years since you owned a property.
To know if you can afford a mortgage, you need to consider your income, credit score, and other financial factors. Start by figuring out how much you can afford to pay every month for a mortgage, after you deduct your expenses from your income. To get more specific information about the type of loan you are eligible for and how much money you can borrow, talk to a mortgage advisor.
To get a mortgage as a first time buyer, you should do some research on different options and lenders. Get pre-approved for a mortgage before you start looking for properties. It’s a good idea to work with a mortgage advisor who can help you find the best terms for your needs.
Yes, a first-time buyer can get an interest-only mortgage. However, they will need to meet certain criteria to qualify for one. A longer-term repayment mortgage may be more suitable.
If you’re buying a home for the first time, you can choose from different types of mortgages like ones with a fixed rate, variable rate, tracker, or offset. Special schemes are available to help you get on the property ladder. Keep in mind that each option has its benefits and drawbacks, so it’s essential to research and learn about different types of mortgages before making a decision.
What next?
If you are looking for a mortgage solution that suits your needs and budget, we are here to help. Please visit our contact us page and fill out a simple form with your details and query.
We will get back to you as soon as possible with the best options for you. Thank you for choosing us as your mortgage partner.
