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Getting onto the property ladder for the first time can be exciting! However, it can also be tricky if you’re unsure what to expect.
There is a wealth of help and advice available for first-time buyers, which means you should be able to get your foot onto the first rung of the ladder after just a few simple consultations with a mortgage advice expert.
However, there will also be a few things you’ll need to bear in mind when applying for your first mortgage.
You will need to consider fees, surveys, reports, application forms, etc. An advisor will help you get off the right foot by looking at the best possible deals and rates for your current situation.
Buying a house for the first time isn’t always simple. With the housing market always changing and plenty of first-time purchasers relying on a loan or two from Mum and Dad, each application will look slightly different.
Are you buying a house for the first time? Need help understanding how a mortgage works? We’re here for you.
Many people worry that the property market won’t favour first-time owners. This is hardly ever the case.
Several specialist products, deals and services can help get new owners onto the property ladder for the first time.
As the closest experts many people have in finding their ideal first mortgage, we are proud to be able to source and suggest fantastic mortgages for 1st-time buyers who fit a wide range of financial profiles.
There is no need to worry about buying a house for the first time. First-time buyers will likely have plenty of questions and concerns about their mortgage payments and mortgage deal.
We, therefore, offer an impartial, understanding service whereby we will consult with you on all the aspects of first-time buying that you may not be sure about.
Our mortgage and protection advisers know about the mortgage completion process and will happily compare monthly payments with you.
A first-time buyer is any UK resident that has never owned a residential property.
They must purchase the property to occupy it as their main residence, not sub-let.
What constitutes a first-time buyer will differ depending on the lender, as they will have their own eligibility requirements.
First-time property owners can access the First Homes scheme, which allows new homeowners to purchase a property for up to 50% less than its market value or purchase price.
To apply for this mortgage scheme, you must be 18 years or older and have a total income of no more than £80,000.
Housing developers may advertise new homes as part of the First Homes scheme, so keep your eye out.
You can also access the Help to Buy Equity Loan Scheme, which allows you to make lower deposits and secure an affordable mortgage.
There are several mortgages to consider as a first-time buyer, such as:
Fixed-rate mortgages give the borrower security, as their rates will be fixed for an agreed amount of time; they won't increase or decrease.
Other mortgage rates may vary depending on the lender's SVR or the Bank of England rate.
SVR mortgages are set at the lender's standard variable rate, which may vary.
The lender may change their rates if they please, so there is no security that your interest rates won't increase.
Tracker mortgages' interest rates vary depending on the Bank of England's base rate.
Your lender will set the rate and then increase and decrease following the BoE's rate.
Discount rate mortgages follow the SVR but will be set for a lower amount.
For example, if the SVR is 4%, you may receive a discount of 1%, so that you will pay 3% rates instead.
You can consider an offset mortgage if your savings account is also with your lender.
An offset mortgage lets you use your savings to offset your interest rates, allowing you to make lower monthly payments.
On average, lenders allow borrowers to loan up to 4 and 4.5 times their annual salary.
Some lenders may allow up to 7 times your salary; however, this will depend on your financial history and any risk.
On average, a first-time buyer must have a deposit of 10% of the property's valuation or purchase price.
You may be able to access a 5% deposit using the Help to Buy scheme; however, there are some risks to consider when applying for a 95% mortgage.
Help for 1st-time buyers is always available from our local team of advice experts.
We work with thousands of individuals, couples and families each year who are completely new to mortgages and what they entail.
However, one of the biggest pieces of advice we can offer to first-time buyers is that they make sure they are ‘mortgage-ready’.
That means ensuring their credit file is healthy and ready to face the scrutiny of lenders they may be applying to.
Here are a few great ways to ensure you are ready to take a home loan. Do be aware that this may take months of preparation!
Your credit rating will be your biggest asset in securing your first mortgage. Therefore, it makes sense to try and be as financially sensible as possible in the run-up to buying a property!
What are the best mortgage rates for 1st-time buyers? This is a question that isn’t so easy to answer.
That’s because rates can vary and depend on who is applying! Home loan rates can change with the wider market, and certain deals can be unlocked for certain people.
However, we always advise looking for the types of mortgage available to buyers which fall under ‘fixed' and ‘variable'.
Most mortgages, if not all, can fall under these umbrellas. A fixed mortgage offers you a monthly rate which is – of course – fixed for a certain period.
A variable rate can, again, fairly obviously, vary depending on lender interest rates.
While fixed-rate mortgages can give you peace of mind and security during your repayment schedule, they may often be levelled at a higher cost than what you expect from a variable loan.
Therefore, it is always worth discussing your needs and preferences with an advisor if you’re unsure which option to take!
HMRC does not have information on who is a first-time buyer. They assume every individual looking to purchase a home is not a first-time buyer.
Therefore, it is up to you to identify yourself as a first-time buyer to access helpful government schemes.
Our mortgage advisors will help you fill out a First Time Buyer declaration form.
First-time buyers are exempt from stamp duty if their property costs up to £300,000.
If your property costs between £300,000 to £500,000, then you will not pay any stamp duty on the first £300,000.
Are you interested in finding first-time buyer mortgage deals nearby or in your surrounding areas?
Speak to one of our mortgage advisers for first-time buyers today by completing our contact form. We can arrange a free consultation with a local expert at your convenience.
Getting on the ladder for the first time isn’t difficult! Let us support you.