First Time Buyers
Get the very best deal on your first time buyer mortgage with an expert, first time friendly service.
Buying your first home
Buying your first home is a big financial step, there are many things to think about and the process can seem confusing. We offer our clients a completely transparent service that is easy to understand and very first time friendly. We aim to take the stress out of the process for all of our customers and will go to every length necessary to ensure you are comfortable and confident that you're getting the right deal on your first time buyer mortgage.
The house buying process
A step by step guide to purchasing your first house...
1 - Mortgage assessment
The first step is to talk to a mortgage adviser about your eligibility in obtaining a mortgage and your potential borrowing. Consider your deposit size and potential government schemes.
2 - Find a property
Next it's time to find your dream home; if you've already got a property in mind, take some time to get to know the area and community before you make an offer.
3 - Make an offer
Once completely happy with your potential home, make the seller an offer and begin your negotiations. Remember, the bigger the gap between purchase price and mortgage amount, the lower the interest rate available to you.
4 - Arrange a solicitor
A solicitor is required to carry out the legal work of your house purchase; we can arrange a solicitor for you, you can find one yourself or depending on your mortgage product, your lender may offer a free legal service.
5 - Finalise your mortgage
By this point your mortgage should be ready to be packaged and submitted by your adviser, we will work closely with the lender and solicitor to ensure this process flows smoothly.
6 - Complete and move in to your new home
Once your mortgage is offered, your solicitor can take over and push through to completion, the lender will release your funds and you can begin moving in to your first home.
What can you afford?
Adjust the underlined figures to fit your situation and we'll give you a rough guide of what you could achieve.
Mortgages for First Time Buyers
Introduction to mortgages
A mortgage is likely the biggest financial commitment you're ever going to make, so naturally, there are a lot of things to think about and consider before diving in.
The mortgage market can be a busy and complex place, particularly for first time buyers, with such a diverse range of mortgages available and a massive amount of information out there, it can be hard to know what the right decision for you is.
That's where an independent mortgage adviser like us comes in, we're on hand to talk you through your potential options, explaining the pros and cons of each, and make a recommendation as to which path might be best for you.
On top of that, you can be sure you're getting the very best deal on the market because we're not tied to any particular lender, our software allows us to search hundreds of mortgage products at a time to find the cheapest one for you.
Getting a mortgage
There are a number of different factors that influence what your mortgage might look like. Firstly, you have your deposit, this needs to be a minimum of 5% of the purchase price of your first home and can come from either your personal savings or as a gift from a close family member. It's important to note that you cannot take out a loan to act as your deposit.
Next, the big question, how much can you actually borrow on a mortgage? Well, that's calculated based on your gross annual income. As a general rule, lenders will offer between 4 and 5 times the gross annual income of all applicants, so if you earn £20,000 a year, you could borrow between £80,000 and £100,000.
This obviously isn't an exact science, but it's a pretty good guide, just bear in mind that your affordability will also be affected by credit commitments and outgoings.
When it comes to getting the best deal as a first time buyer, going to a mortgage adviser is essential, it's our job to make sure you understand the types of mortgages available to you and also to get you the very best deal on the market.
Best mortgages for first-time buyers
Mortgages come in a number of different shapes and sizes, the main types of mortgages you'll be considering as a first time buyer are as follows:
Fixed rate refers to the interest rate of your mortgage loan, as the name suggests, it involves a guaranteed rate of interest for a set period of time, commonly 2, 3, 5 and even 10 years.
This can be a good option if you're looking for stability as it will guarantee your monthly payments for the course of the rate's term, then when the term is over you can just remortgage on to another fixed rate.
Typically, some of the lowest rates on the market can be found in the 2 year fixed range, making them the most popular among first time buyers.
A tracker rate is a form of variable rate, meaning the interest rate on your loan is dynamic and could change at any time, this type of rate gets its name because it tracks the level of another rate, commonly the Bank of England base rate.
To use an example of this type of scheme, you could get a tracker rate mortgage at 2% above base rate, meaning if the Bank of England base rate was 0.5%, you would have a rate of 2.5% on your mortgage, the Bank of England could then decide to increase their base rate and your rate would increase by the same amount.
Depending on market conditions this can provide you with a low interest rate, but it's always liable to change and won't offer you guaranteed monthly payments.
A discounted rate is another type of variable rate, it's usually set for a period of 2, 3 and 5 years at a time and tracks the movement of the lenders Standard Variable Rate.
An example of this type of scheme could be 2% less than SVR, so you will receive an interest rate that is exactly 2% less than the bank's standard variable rate for the term of your scheme.
Remember that the bank can change their SVR at any time and your interest rate will change in line with this.
A capped rate scheme is another type of variable rate, but one with a ceiling. It's liable to change similarly to the other schemes previously discussed, but you'll get the guarantee that your interest rate will never exceed a set threshold, so it offers a little more stability than other variable rates.
These rates aren't very common at the moment due to the historically low interest rates available on the market.
The best type of mortgage for you will depend on what your current and future circumstances are, your mortgage adviser will talk you through the pros and cons of each and make a recommendation for you.
First Time Buyer Schemes
There are a number of different schemes currently in place to assist first time buyers in their goal of getting on to the property ladder.
These range from savings boost schemes like the Help to Buy ISA and the Lifetime ISA, to schemes that actually help you out when you're purchasing the property like the Help to Buy Equity Loan Scheme.
To find out exactly what schemes you might be eligible for, the government has a very useful website called https://www.ownyourhome.gov.uk/schemes-all/ that can help you out.