First Time Buyer Mortgages
What you need to know
While the myriad of financing options available to first-time homebuyers can seem daunting, it can save you a considerable amount of time and money to take the time to research the fundamentals of property financing.
A mortgage is a loan given to someone to help them buy a property if they do not have enough money to buy it outright.
A good mortgage broker will be with you every step of the way during your home purchase.
There are many rates available from fixed, tracker and variable rates. Which one suits you depends on your circumstances.
How to start with a mortgage?
While the myriad of financing options available to first-time homebuyers can seem daunting, it can save you a considerable amount of time and money to take the time to research the fundamentals of property financing.
A mortgage is a loan given to someone to help them buy a property if they do not have enough money to buy it outright.
You’ll need to save a deposit, which is the amount you put towards buying your home. Deposits vary, depending on the type of property you would like to buy, as well as other factors.
A good mortgage broker will be with you every step of the way during your home purchase. They will advise on which mortgage to take and process the application holding your hand every step of the way until you move into your new home.
The first thing you need to get as a First Time Buyer is an “Agreement in Principle”. This lets you know how you can afford to borrow. You’ll usually find that estate agents want you to have an agreement in principle before you can make offers on property.
There are many rates available from fixed, tracker and variable rates. Which one suits you depends on your circumstances.
It's worth having a chat!
We know it gets confusing!
That is exactly why we’re here to explain your options and how to make it work for you!
....so, in a nutshell...
First Time Buyer mortgages recap
There are a whole bunch of benefits to reap from a first time mortgage, but it’s important to choose the correct one for your circumstances and any potential developments you plan in the near future.
With so many variables in play, it’s a great idea to work with a broker so that you can make as informed a decision as possible.
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A mortgage requires a certain amount up front
Most lenders require you to have a deposit. You can get a mortgage without a deposit from several lenders but they have certain caveats to that. It’s always best to try to get a deposit and the larger the deposit the lower your interest rate. A deposit of 5% of the property value is normally required.
There are schemes to help First Time Buyers.
There are various schemes, soley available to first time buyers, that could help you in getting onto the property ladder. For example, the ‘Help to buy’ scheme has assisted many families find their new home together.
The ‘First Steps in London’ scheme has helped families stay close together, as young couples take their first steps together.
There are various schemes available to first time buyers that could help you onto the property ladder. Although Help To Buy is no longer available you may qualify for another scheme such as Shared Ownership.
Costs and fees
There are various costs and fees throughout the process and it’s helpful to know these so you can plan ahead.
- Stamp duty – This is a fee paid to HMRC to purchase Uk land and property, First Timer Buyers may be eligible to pay no or reduced stamp duty.
- Solicitors fees – this varies from solicitor to solicitor
- Lender arrangement fees – Fees charged by the lender which sometimes can be added to the mortgage so you don’t have to pay it up front
- Valuation fees – A fee you pay the mortgage company for a basic survey on your new property.
- Broker fees – some mortgage brokers charge a fee for their services.
You borrow in relation to your income
The lender will want to analyse your finances when you apply for a first mortgage.
They’re going to need to know how much you’re making, your monthly outgoings, and the cost of living. How much you will be able to borrow will be worked out by the lender.
Usually, a sum of five times your salary would be the total mortgage you’ll be given. But it may have been lower than this depending on how much deposit you have. Each mortgage offer is made on an individual basis.
Our role is to help you make an informed decision
There are many aspects to all types of mortgage and we understand that you need to make the best decision.
You will undoubtedly have many more questions, so please feel comfortable enough to arrange a free, no-obligation chat!
Frequently Asked Questions
Here are a few of the questions we regularly answer for those who are wondering if this is the correct choice.
Just remember, we’re ready to chat and answer many more!
You usually need a 5% deposit but some lenders do offer special deals to First Time Buyers where no deposit is required.
The loan-to-value is the percentage of your property which has a mortgage on it expressed as a percentage.
There are many types of mortgages for first-time buyers such as fixed rates and tracker rates. The type you choose depends on what you want. If you are someone who wishes to know what they are paying every month and do not want fluctuations in payments, then a fixed rate may be more suitable for you.
- Passport & Drivers Licence,
- Proof of address (utility bill dated within the last 3 months),
- Last 3 months payslips (if employed),
- Last 3 months bank statements showing salary credits and bills being paid,
- Last 2 years Accounts (if you are a Limited Company Director),
- Last 2 years Tax Computations (if your self employed),
- Last 2 years Tax Year Overviews (if you are self-employed)
Yes, getting a joint mortgage means you could borrow more and make the repayments easier to afford.
There are several rates available to First Time Buyers. They are Fixed, Tracker, variable, offset and discounted rates to name a few.
Here are a few of the questions we regularly answer for those who are wondering if this is the correct choice.
- Passport & Drivers Licence,
- Proof of address (utility bill dated within the last 3 months),
- Last 3 months payslips (if employed),
- Last 3 months bank statements showing salary credits and bills being paid,
- Last 2 years Accounts (if you are a Limited Company Director),
- Last 2 years Tax Computations (if your self employed),
- Last 2 years Tax Year Overviews (if you are self-employed)
You usually need a 5% deposit but some lenders do offer special deals to First Time Buyers where no deposit is required.
The loan-to-value is the percentage of your property which has a mortgage on it expressed as a percentage.
There are many types of mortgages for first-time buyers such as fixed rates and tracker rates. The type you choose depends on what you want. If you are someone who wishes to know what they are paying every month and do not want fluctuations in payments, then a fixed rate may be more suitable for you.
Yes, getting a joint mortgage means you could borrow more and make the repayments easier to afford.
There are several rates available to First Time Buyers. They are Fixed, Tracker, variable, offset and discounted rates to name a few.
Who can get a first-time buyer mortgage?
First-time buyer mortgages are available to those looking to take their first steps on the property ladder. Often coming with low deposit requirements, they are designed to help people with the purchase of a first home.
Are deposits for first time buyer mortgages larger than standard mortgages?
Deposits for first time buyer mortgages are normally around 5-10% of the property value. This is fairly similar to what is expected of those already on the property ladder. If you can put down a larger deposit, you may find a wider range of first-time buyer mortgages available to you.
How much could I borrow on a first-time buyer mortgage?
Deposits for first time buyer mortgages are normally around 5-10% of the property value. This is fairly similar to what is expected of those already on the property ladder. If you can put down a larger deposit, you may find a wider range of first-time buyer mortgages available to you.
Can I still get a first-time buyer mortgage if I have bad credit?
Yes. You may find that the number of lenders is a little more limited, but some specific lenders specialise in bad-credit lending. These products may come with higher interest rates and require a larger deposit. Speak to our team at Mortgage Saving Experts and see how we can help you find a suitable lender.
Are there any fees for a first-time buyer mortgage?
Yes. You will need to pay arrangement fees, valuation fees and legal fees for a first-time buyer mortgage although some lenders may offer incentive-based deals that cover some of this expense. Most lenders do offer slightly higher interest rates with no arrangement fees or offer free valuations.
Is there help for first-time buyers?
Yes. Shared ownership schemes, for example, allow first-time buyers to purchase a smaller portion of the property whilst renting the rest of it. This means less deposit is needed as you’ll only be buying a percentage of the house rather than needing a mortgage to help you secure 100% ownership.
Can first-time buyers still get a help to buy mortgage?
No. The help-to-buy scheme ended in 2022. Homeowners already on a help-to-buy mortgage can still remortgage though. If you are on a help-to-buy mortgage and you have questions, get in contact, we can help.
Should I look for a fixed rate, tacker or variable first-time buyer mortgage?
Much depends on the interest rates and how the market is moving. Unfortunately, nobody can predict the future. Choosing a fixed rate term keeps your interest rate set for a specific length of time. Potentially avoiding rate rises that affect those on variable deals. However, a variable rate could mean your costs fall and if you are stuck on a fixed deal, you’ll miss out on that saving. Our team of mortgage experts can help, why not give them a call?
Can Mortgage Saving Experts help me find an affordable first-time buyer mortgage?
Yes! It is what we specialise in. We have many years of experience working with a host of the biggest lenders in the country. We can help you find the ideal first-time buyer mortgage fast! And should you require help with equity release, remortgaging or buy-to-let mortgages, we can help with those too!
Is Mortgage Saving Experts regulated?
Yes. We are fully authorised and regulated by the FCA. Our FCA number is 779662.
