First Time Buyer Mortgages

A home buyer who is taking on the property market for the first time, will be classed as a first time buyer and thus eligible for a first time buyer mortgage. If you have previously been a homeowner, but have been out of the property market for a while, some mortgage lenders may still consider you to be an acceptable applicant for a first time buyer mortgage.

If you are not a first time buyer, but are living with a partner who does qualify for this type of mortgage, you may be able to jointly apply for a first time buyer mortgage.

First of all, your first time buyer mortgage journey will start by having your deposit saved and ready to put down on a property you have set your heart on. The minimum deposit is typically 5% of the property purchase price, though it can be higher. Your mortgage lender will then loan you the required amount, handled by your solicitors, to complete the purchase of the property.

From here, you will begin monthly payments of capital (the loan) and interest combined (unless you opted for an interest-only mortgage), to repay the mortgage lender for the loan they have given you. There will typically be an introductory period, which you can set, prior to falling onto your lenders Standard Variable Rate (SVR). This is a higher rate of interest that the mortgage lender sets themselves, often being more costly.

Just before this occurs, we will be back in touch (usually around 6 months before) to get the ball rolling on your remortgage, hopefully opening you up to even better mortgage deals.

A loan to value ratio, is the amount of funds you are able to borrow, at a percentage of the properties purchase price. With the minimum deposit for a property purchase generally being 5%, this means you would have a 95% loan to value. If you put down a 10%, you would have a 90% deposit, and so on.

As a general rule of thumb, the more deposit that you are able to put down, the lower your LTV will be. This in turn will hopefully lower the rate of interest of which you will be charged on your first time buyer mortgage, saving you money overall.

In order to buy your first home, you will first need to have saved up a suitably sized deposit and be eligible to take out a first time buyer mortgage, allowing you to continue with the rest of your purchase. You will also need to appoint a conveyancing solicitor to carry out the legal proceedings that come with purchasing a property.

As a first time buyer mortgage broker, we are here to help home buyers who are new to the mortgage world, every step of the way. From checking your eligibility and obtaining you a suitable first time buyer mortgage right through to you getting the keys to your new home, we've got your back.

As an experienced, long-standing mortgage broker, this is one of the questions we are most frequently asked by those looking to apply for a first time buyer mortgage. The answer to this is, typically, 5% minimum, giving you a 95% mortgage. This can be from your savings, a gifted deposit, or a combination of the two.

It is important to remember, however, that putting down a deposit larger at say, 10% of the purchase price, will widen your mortgage options and open up better deals. If you happen to have a poor credit score, whether that be to a lack of credit history or any debts in your name, you may be required to put down a higher deposit.

Well first of all, there is of course your deposit that you will need to have saved up. This will be the biggest outgoing at the start of your process, unless you have been gifted your deposit. On top of this, you will also have conveyancing and solicitors costs, property surveys, broker fees and mortgage arrangement fees.

You may also have Stamp Duty to think about, as well as any insurances (to protect either your home, contents or financial security) that you might want to take out.

Your dedicated mortgage advisor will be able to run through all the potential costs with you in more detail during your free initial first time buyer mortgage appointment.

There have been various government first time buyer mortgage schemes introduced that serve the purpose of helping new home buyers to get onto the property ladder. The most popular of these options have been the Help to Buy Equity Loan Scheme & the Right to Buy Scheme.

The Help to Buy Equity Loan Scheme is the most popular of these, consisting of a government loan of up to 20%, bringing your deposit total to 25%, helping you to access a better deal. You are required to have at least 5% of your own deposit, though you can put down more. If you put down 10% of your own, they'll give you 15% and so on.

Whilst this is a great option, please remember that it is purely a government loan and will need to be repaid. It will also only apply to new build properties. Another option, if you are a local authority property renter, could be the Right to Buy Scheme. This allows eligible tenants to purchase their rental property, potentially at a discounted price.

Other useful schemes you may be able to use include the Armed Forces Help to Buy Scheme, the Help to Buy Shared Ownership Scheme and a Lifetime ISA. To learn more about the first time buyer mortgage schemes that may be available to you, please get in touch with one of our mortgage advisors and they will run through your options with you.

There are a variety of first time buyer mortgages that you may be able to take out, with each of these varying in their purpose and how they work. The most commonly encountered first time buyer mortgage is a fixed-rate mortgage. Here you fix in your interest rates for a length of time, usually 2-5 years. This means that if interest rates rise, you'll be sitting comfortably knowing your payments will stay the same.

Another option is a tracker mortgage. This sits at an amount above the Bank of England base rate, meaning if the base rate goes up, so too does your interest rates. If the rate goes down, then it will do that also.

Discounted variable rates can be another option, sitting below your mortgage lenders Standard Variable Rate (SVR). These can be cheaper and allow you to stay with the same lender, however, if their SVR changes, your interest rates will change also.

Last of all, there may be the option for an offset mortgage. This allows eligible homeowners to utilise an interest-free, flexible savings account alongside their mortgage, offsetting their savings against the mortgage balance. This means if you have more in your savings, you will have less interest to pay on your mortgage, whilst also allowing you to freely access those savings if you need to.

It is important to note that taking out any savings from an offset mortgage, will increase your balance again. To learn more about the different types of mortgages available to you and to find out which one is the most suitable, please book online and speak to a qualified mortgage advisor.

As expert providers of mortgage advice, we are able to search 1000s of first time buyer mortgages to find you the most suitable deal for your circumstances whereas a bank will be limited to their own products.

The bank used to be a popular choice, as the local manager knew your finances inside and out and would take this into consideration when offering mortgage products. Nowadays, this is not relevant and it’s simply a case of finding the cheapest available deal.

Using the services of a mortgage broker, whilst it may incur a fee, can often get the process completed a lot quicker, with a lot less stress and you have a lot more choice. Here at UK Moneyman, we have access to a large panel of lenders, so we can tailor your mortgage to your personal circumstances.