MORTGAGES
First Time Buyer
Sub-Heading Text for Buy to Let – TBC -Sub-Heading Text for Buy to Let – TBC Sub-Heading Text for Buy to Let – TBC
First Time Buyer Mortgages - what you need to know
Buying your first home or property is an exciting step for any individual or family. However, it is undeniable that the process of getting an agreement in principle (aip), mortgage offer and understanding the implications of this choice is neither easy nor quick. Indeed, mortgages are not automatically granted, and the assessment takes place on a case to case basis.
So many factors can influence how likely you are to obtain a mortgage, including your salary, credit score, employment status, age and property type. Here are some of the questions that first-time buyers will have to deal with at some point!
Looking for Something Else
Talk to An Expert Now
Get in touch for your free initial consultation and no obligation advice
What Is a First-Time Buyer?
If you are buying your first residence, then you are a first time buyer. It is however, important to note that you can be a “first-time buyer” more than one time in your life.
- If you have not owned a home for three years or over
- Single parent who previously owned with a spouse
- If you have owned a residence that was not attached to a foundation – such as a mobile home
First-time homebuyers can benefit from certain government schemes that might make it easier for you to buy a home and obtain a mortgage.
How Is the Process Different for FTB's
First-time buyers can leverage some privileges offered by the government. Additionally, certain mortgage types are specifically designed for first-time buyers.
Generally, if you are a first-time buyer, you will need to understand how much you have saved up and what your deposit is. You will then need to check whether you can get a mortgage. This will give you an idea of what mortgage repayments are best for you and what your monthly payment is likely to be.
What Our Customers Say
How Much Can an FTB Borrow?
The mortgage deal you can obtain will depend on many factors. Firstly, the deposit you have put down for your home will determine how much more you need to borrow. Naturally, the larger your deposit is, the less money you will need to borrow, and you can even obtain access to better mortgage rates.
The amount you can borrow is then determined by the lender, who will assess your suitability. During the audit, your salary, properties, and assets will be compared with expenditures, debt, and credit score. When partnering with a mortgage provider to obtain this help, they will have an LTV (loan-to-value) ready, which is the maximum offer and the highest Mortgage you can get.
What Is an Agreement in Principle?
An Agreement in Principle is an estimation of what you will be able to borrow without having to go through with a full credit check. This can give you an idea of the value of the property to buy – so you can start looking for your home while the Mortgage application is being processed.
How Do I Know What My Credit Score Is?
You can check your credit score through multiple credit referencing agencies. Below is a link to Check My File.
How Do I Improve It?
Improving our credit score is something that we all strive toward. While it is not easy, you can improve yours by paying your bills on time, repaying your debt, keeping your credit card balance low, keeping unused credit cards open, regularly checking your credit report and ensuring that there are no inaccuracies.
Why Choose Us
What Help Is Available for FTB's
There are several schemes and initiatives that can help you buy your first home without compromising your finances. These include:
- Help to Buy – with a small deposit of 5% of the purchase price; you can get the Government help to borrow between 20% and 40% of the purchase price.
- Right to Buy – a discount to buy the home you have been renting
- Shared Ownership – you buy a portion of the home and rest the rest from the council or housing association.
- Joint Mortgage – use the help of a partner, family member, or others to increase the deposit and Mortgage.
- Guarantor Mortgage – obtaining a higher mortgage thanks to the services of the guarantor.
What Are Other Fees Involved When Buying a House?
Buying a home can be expensive, but there are also other associated costs that can significantly increase the overall cost you will need to pay.
- Mortgage & arrangement fees
- Valuation and Survey fees
- Broker fees
- Conveyancing fees
- Stamp Duty – currently on a nine-month stamp duty holiday that allows buyers to avoid this cost for homes up to £500,000. From £500,000 or more, you can pay a Stamp Duty that is between 5% and 12% (This comes to and end March 2021)
How Do You Go About Arranging a First-Time Buyer Mortgage?
Getting in touch with us and let us help you gain access to the right mortgage for you.
If you are a first-time buyer, doing it all yourself is not recommended
How it Works
The Award-Winning Matrix Mortgages Process – Easy as 1,2,3! Follow Our 3 Simple Steps to Securing Your Dream Home
1
Enquire
Complete our quick and easy contact form, email, call or WhatsApp us to get started
2
Apply
We handle all the necessary paperwork and help manage your entire mortgage process
3
Complete
All done. Sit back, relax, and feel great about your decision to work with us
Explore some of our other pages
FAQ
A mortgage is a loan from a bank or building society that allows you to purchase a property. The loan is repaid over several years with interest dependent on your personal financial situation.
A mortgage can be between one or more people. However, if you do not keep up your repayments, the lender can repossess your property.
All mortgage lenders have their own requirements. The following factors take a part in whether you will be given a mortgage offer, and how much the lender is willing to borrow you:
- Amount you wish to borrow
- Size of your deposit
- Employment status and income
- Credit rating
- Outgoings
- Existing debt
- Your age
- Length of the mortgage term
- Your credit status
- If you are applying solely or jointly
To be accepted by a lender, you need to assure lenders that you can repay your mortgage. One main aspect lender’s look at is your credit report to check your repayment history. Your credit file will include current and existing records on items such as credit cards, loans, overdrafts, mortgages, mobile phone/s, some utility payments and all accounts that have been open in the last 6 years. If your credit report shows arrears, defaults, CCJs, debt management plans or bankruptcy in the past, there are mortgage options available which we can help you with.
To get a mortgage you will need to save a deposit of at least 5%, but the more you save, the better your mortgage rate will be. If you have an existing property you own, you can use the equity in your property for this. Our skilled mortgage advisors can talk and guide you through the benefits and the difference in your monthly payments by increasing your deposit.
As soon as you have found the property you want to buy, our mortgage brokers will evaluate your personal needs and situations and recommend a mortgage product that is right for you. They will compare a wide variety of mortgage quotes, including products that cannot be found on the high street or comparison sites. This guarantees that you get the right deal at a right price.
If you agree to the mortgage product your advisor suggests, you will receive your Agreement in Principle (AIP). This will provide you with an estimated total of how much the lender is willing to borrow you and allows you to put an offer in on your ideal home.
If your offer is accepted, you will need to arrange a solicitor to deal with searches, surveys and contracts, which we can arrange for you. We manage the entire mortgage application process through to completion, liaising with your solicitor and lender to make sure your application is successful.
There are different mortgage options such as a remortgage. In this case we would recommend looking for a new mortgage deal approximately 3 months before your current deal expires. By beginning the mortgage process early it will allow you to prepare ahead of time to compare all the available mortgage products and submit your application. Do not worry if your mortgage is approved early as we will ensure that the completion date corresponds with your current deal’s end date.
A lot of mortgage lenders will lend you up to five times your salary. However, this all depends on several factors including your age, number of dependants and current financial commitments. Lenders will work out how much they will lend you based on what you can reasonably afford each month after you have paid your bills, credit cards, loans etc.
In addition, our mortgage advisers will assess your individual needs and situations to see how much you can realistically borrow before an application or credit search is completed. If you choose to continue with the application, our advisers will understand which mortgage lenders to approach to ensure you get the required loan amount.
In order to buy a property with a mortgage, you will need to save a deposit of at least 5%. However, the more you can save, the better your rate will usually be. There are a few exceptions to this as follows:
- If you already own a home, you can use the equity from your property for the deposit
- If you are a council tenant and are looking to buy your current home under the Right to Buy scheme, most mortgage lenders will now accept your Right to Buy discount as a deposit.
As property prices increase, first time buyers are struggling to save enough money to buy a home. In cases like this the government has therefore introduced ‘Help to Buy’ to allow first time buyers to get on the property ladder.
Our expert mortgage advisors are aware of various mortgage deals available and can help you decide which mortgage deal best fits your needs.
When buying a home, you will need to save enough money to pay for other factors and not just your mortgage deposit. This also includes paying for your mortgage fees, moving costs and legal expenses. We have listed below all the possible purchase and moving expenses you may have to pay, to help you with your budgeting. The exact fees and amount you will pay, is dependent on the value of the property you are buying and your chosen mortgage lender.
Mortgage booking fee: Some mortgage lenders will charge this to secure a fixed-rate or tracker deal.
Cost: £99 – £250
Mortgage arrangement fee: Some mortgage products will incur a mortgage arrangement fee, in addition to the mortgage booking fee. This fee is either paid upfront or added to your mortgage debt. If you chose to add it to your mortgage, the cost will increase over the lifetime of your mortgage.
Cost: £1,000 – £2,000
Telegraphic transfer fee: Needs to be paid to the lender to transfer the amount you are borrowing for the mortgage to the seller’s solicitor.
Cost: £25 – £50
Mortgage broker fee: If you use a mortgage advisor to arrange your mortgage for you, you will need to pay a fee or commission, depending on the value of your mortgage.
Cost: £197- £597. However, this may vary if you need to use a specialist lender
Valuation and survey fees: Charged by the lender to value the property you are buying. The cost varies according to which survey you choose:
Home condition survey: Most basic and cheapest of all the surveys and often used for new-builds.
Cost: £250
Homebuyer’s report: More in-depth survey, assessing the inside and outside of the property, and also includes a valuation.
Cost: £400
Building survey: A complete survey generally used for older or unconventional properties. Although they are the most expensive, they are certainly worth considering, as it could potentially save you a lot of money if any structural problems are found with the property.
Cost: £600
Higher lending charge: Can be charged by lenders if you borrow most of the value of the property.
Cost: Approximately 1.5% of the amount you borrow
Searches: Your solicitor will arrange for the local authority to check whether there are any issues that could affect the property’s value. The local council can charge a fee for carrying out these searches and may also request that a drains search be done at the same time.
Cost: £250 – £300
Legal costs: You will need to instruct a solicitor to carry out the necessary legal work for you.
Cost: £850 – £1,500 plus VAT
Stamp Duty Land Tax (SDLT): Charged on all purchases of UK land and property over £125,000. However, the amount you will pay is dependent on the purchase price of the property you are looking to buy, and whether you have owned a home before as follows:
First home: First-time buyers are exempt from paying SDLT on the first £300,000 of the purchase price of a property up to the value of £500,000. All purchases in excess of £500,000 will pay the standard stamp duty rates as follows:
- £0 – £300,000: 0%
- £300,001 – £500,000: 5%
Next home: If you are currently or have previously been a homeowner, you usually pay SDLT on increasing portions of the property price:
- £0 – £125,000: 0%
- £125,001 – £250,000: 2%
- £250,001 – £925,000: 5%
- £925,001 – £1.5 million: 10%
- £1.5 million+: 12%
Second property: If you are looking to buy an additional property, you usually have to pay 3% on top of the normal SDLT rates as follows:
- Less than £125,000: 3%
- £125,001 – £250,000: 5%
- £250,001 – £925,000: 8%
- £925,001 – £1.5 million: 13%
- £1.5 million+: 15%
For example, if you buy a next home for £275,000 the SDLT you owe is calculated as follows:
0% on the first £125,000 = £0
2% on the next £125,000 = £2,500
5% on the final £25,000 = £1,250
Total SDLT = £3,750
Information correct as of October 2021 – Source: www.gov.uk/stamp-duty-land-tax
Removal costs: Paid to the removal firm (if you choose to use one) to pack, transport and deliver your possessions to your new home.
Cost: £300 – £600
Latest News, Blogs and Content
Keep up to date on the latest news in the mortgage industry with our Blogs and great tips in our Vlogs from our experienced mortgage advisers along with our ever buzzing socials
How Much Can You Borrow? Let’s Discuss Your Options Today
