First Time Buyer Mortgages
If you are thinking of buying your first home in London or anywhere in the UK, you will want to find a mortgage that is right for you. With so many different deals on the market, it can be tricky to know where to start.
Here are our top tips for finding a great deal for first time buyer mortgages London:
1. Understand your options
There are a few different types of first-time buyer mortgages available, so it’s worth considering all of your options before you make a decision. For example, you could opt for a fixed rate mortgage, which would give you peace of mind knowing that your monthly payments will stay the same for a set period of time. Or you could opt for a tracker mortgage, which tracks the Bank of England base rate and usually offers lower interest rates. There are other types of mortgages available such as discount and variable or lifetime trackers. Speak to a broker to discuss what is most suitable to you.
2. Save up for your deposit
It goes without saying that the bigger your deposit, the better as you would have more available mortgage options, and your monthly mortgage payments will also be lower. Lenders requires at least 5% deposit from first time buyers and if you can put down a larger deposit, you may be able to access lower interest rates. However, for any First Time Buyer in London, due to the high property prices, the deposit is often the biggest challenge. So, it is worth planning your purchase well ahead, and save up as much as you can before you apply for a mortgage. You may be one of the few First Time Buyers London that can tap into your parents’ savings for additional help with the deposit. But there are also other options available such as the ability to get someone else’s income to help towards your own mortgage, whilst you will be the sole owner of the property. This is a specialist area, and you will benefit from discussing the options available with an experienced mortgage broker.
3. Consider all of your costs, including Stamp Duty.
When you’re buying a property, there are a lot of different costs to consider, such as stamp duty, legal fees. If you are a first time buyer in London or England and Wales, you do not pay stamp duty on properties worth less than £425,000
4. Don’t overstretch yourself
It is important to make sure that you can afford your mortgage repayments, so make sure that you know your monthly budget and how much you can afford to pay for your mortgage if interest rates will continue to go up. It is also a good idea to have a buffer in place in case circumstances change in the future and have an “emergency saving pot” to cover for at least 6 months of your total outgoing.
5. Get advice from an experienced mortgage broker
Choosing the right mortgage can be a complex process, so it’s always a good idea to get expert advice from an experienced mortgage broker. They’ll be able to help you compare deals and find the best option for your individual circumstances. A good mortgage broker will provide advice on available options and will also be there to guide and support you throughout the entire process of buying your first home, from liaising with estate agents, solicitors and of course with mortgage lenders, to ensure that all will go smoothly up to the point when you get the keys to your own property.
Get Guidance from an Expert on Your Journey to Become a Home Owner.
How our service could benefit you:
We help First Time Buyers to confidently step onto the property ladder. Buying your first home is one of the most exciting things you’ll do, but it can also be daunting.
There is so much to think about and plan, including finding the right first-time-buyer mortgage in London or across the UK. This is why you need an experienced mortgage broker to guide you and support along the way.
Your Mortgage Experts are here to help you at every step of the home buying process.
Ready to get a mortgage? We’ve got you covered! From understanding how it works to comparing the available rates on the market, we’ll guide you through the entire process to secure your next best deal.
Expert at your service
Make well-informed decision.
With 20 years experience in financial services and in the property market,
you will get the reassurance you need.
Save you money and time.
We will de-mystify the complexity of
mortgages for first-time buyer, and
navigate through the criteria and
options available to you.
A mortgage is a loan secured against your home. Your home may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it.
Some of our happy clients
Hear what our happy clients say about us. We have helped first time buyer just like yourself.
Learn More About First Time Buyer
Steps to becoming a home owner
Buying your first home is one of the most exciting things you’ll do, but it can also be daunting. There is so much to think about and plan, including finding the right mortgage. This is why you need an experienced mortgage broker. Your Mortgage Experts are here to help you at every step of the home buying process. Please check the information below on first time buyer mortgages, and click below to start online. You will be asked a series of questions about yourself, your background, that will help understand you so that we can advise you on the best available mortgage options tailored to your specific needs and circumstances.
How much can I borrow as a first-time buyer
The amount of money that you can borrow will depend on factors such as your income, your outgoings, your credit score, and your ability to make mortgage payments also as interest rates rise.Furthermore, each mortgage lender has their own lending affordability assessment calculation, and they may be prepared to lend you different amounts.Our mortgage calculator will give you an indicative amount that you may be able to borrow
Deposits for first time buyers
The minimum deposit for a first time buyer is typically 5% of the total property purchase price. However, the more money you have for a deposit, the better – as with a larger deposit the Loan-To-Value ratio (or LTV, which is the ratio between the mortgage amount and the value of the property) will be lower. And with a lower LTV, you will be able to access the cheapest mortgage interest rates. The deposit will typically come from your own savings. However If you are lucky enough to receive help from parents or family, you can use any gifted money towards your deposit.
How much will my mortgage cost?
Your mortgage is probably going to be your biggest outgoing each month, so it is important that you budget for it. The monthly re-payment will depend on three things:
- The amount borrowed
- The number of years you wish to borrow the money for (the mortgage “term”)
- The interest rate
Please remember that interest rates can go up, and therefore your monthly re-payment could be higher in the future. The choice of mortgage term is important, as well as finding the most cost effective mortgage product and interest rate. Check the mortgage calculator to see how much your mortgage monthly payments will be. We are here to help you find the best first-time buyer mortgage deals in London and from across the UK.
Stamp duty for first time buyers
Stamp Duty Land Tax (SDLT) is a tax which is payable when you purchase a property above a certain value. It is important that you budget for it, as it can be a substantial amount of money, depending on the value of the property, and on where the property is located. The good news is that many first-time-buyers do not have to pay stamp duty on residential property purchases, depending on the purchase price. As tax rates are regularly reviewed by the government, it is important that you seek professional advice. Please feel free to contact us for guidance and support. You may also wish to use the stamp duty calculator, provided by HMRC to work out the SDLT payable– by clicking here, or go straight to our mortgage calculator to quickly check the stamp duty payable. Please note that by clicking on the link above you will leave Your Mortgage Experts’ website. Your Mortgage Experts has no control or responsibility for the pages you are about to access, or to where any subsequent links may take you.
Mortgage in Principle
A Mortgage in Principle, or Agreement in Principle (AIP), or Decision in Principle (DIP), or Mortgage Promise, is a preliminary statement from a mortgage lender indicating what you might be able to borrow.It is generally a good idea to get a mortgage in principle when you set off to look to purchase a property, so that you will have more confidence in the amount that you may be able to borrow with the mortgage. Furthermore, estate agents may ask you for one, as it is a way to qualify you as a potential credible buyer.
What mortgages are available to first time buyers?
When choosing your first mortgage, there are a number of thing that you need to take into account:
- First, how much you can borrow. The amount that you can borrow will depend on your income and outgoings, as well as the deposit you have to put down. Mortgage lenders will also apply “income multiples”, that will limit the amount they are prepared to lend you as a multiple of your earned income.
- Secondly you need to allocate your available deposit. A typical deposit will be at least 5% of the property’s value. However, if you have a higher deposit, you will be able to access mortgages with competitive rates as you’ll be considered a lower risk.
- You want to take into account all costs involved. Alongside saving for a deposit, you’ll also need to save up for other costs – including stamp duty that may apply, legal fees and moving costs.
- Importantly, budget for your mortgage monthly repayments. You will not want to stretch your monthly budget, and a mortgage has to ultimately be affordable. One way to reduce the monthly mortgage payment is to choose a longer mortgage term. However, the longer your mortgage term, the more interest you’ll end up paying over the term of the mortgage.
Checking your credit score
Mortgage lenders will check your credit profile at the credit bureaux, such as Equifax, Experian or TransUnion.It is a good idea to check your credit score by contacting directly one of those main credit bureaux and obtain your credit report.If you have a good credit score, you would generally qualify for the best available mortgages in the market. If your credit score is not good, you may be rejected by mainstream mortgage lenders; however, there are specialist mortgage lenders that could still consider you, depending on your specific circumstances.
Importance of the voters roll
It is very important that you are registered to vote, as this is one of the main ways that mortgage lenders verify your identity and address. Please also make sure that you are registered at your current address; if you are unsure, please double check you’re not still registered at a previous address. If you are not a UK, EU or qualifying Commonwealth national – and therefore can’t register to vote, please let us know as there would be other requirements and information to provide in order to verify your identity and address. You can easily register on the elector roll at the link here. Please note that by clicking on the link above you will leave Your Mortgage Experts’ website. Your Mortgage Experts has no control or responsibility for the pages you are about to access, or to where any subsequent links may take you.
How do I choose a solicitor to buy my home?
A solicitor or conveyancer will handle all the legal aspects of buying the property for you, such as handling the contracts, carrying out local council searches, dealing with the Land Registry, and transferring the funds to pay for your property. Authorised solicitors will be members of the Law Society of England and Wales/ Law Society of Scotland and a member of the Law Society’s Conveyancing Quality Scheme. Conveyancers must be members of the Council for Licenced Conveyancers, and they would need to be accepted on the mortgage lender panel.It is an important decision, and you would want to choose someone that can provide a good level of service in what could otherwise become a stressful process.
Will I need a survey to buy my property?
When you buy a property, the mortgage lender will instruct a valuation of the property to ensure that they are happy to lend against it. This valuation is carried out by the lender’s surveyor, it will only be a “basic” valuation, and it will be done solely for the benefit of the mortgage lender. For your own peace of mind, you may also wish to instruct your own survey. There are different types of survey:
- RICS Condition Reports
- RICS HomeBuyer Reports
- RICS Building Survey
- Building or full structural survey : You should ensure that your surveyor is a member of a recognised governing body such as the
- Residential Property Surveyors Association (RPSA) or Royal Institution of Chartered Surveyors.
- You can find a surveyor on the RPSA or RICS websites.
Please note that by clicking on the links above you will leave Your Mortgage Experts’ website. Your Mortgage Experts has no control or responsibility for the pages you are about to access, or to where any subsequent links may take you.
Do I need life insurance with a mortgage?
Life insurance is not compulsory, when you remortgage or get a new mortgage. It is taken for peace of mind that your loved ones will not have to struggle financially in the event of your death, as the lump sum paid out at your death can extinguish an outstanding mortgage commitment and/or help out your dependants financially. You may already have life insurance through your employer, which is known as death-in-service policy. In which case, you should review the arrangement and check if this is sufficient to cover your mortgage. As life insurance becomes more expensive with age, it may make financial sense to take out a policy early in your life, and certainly at the start of a new mortgage, if you do not have an adequate policy in place already.
Shared ownership mortgages
Help to Buy: Shared Ownership is another government scheme, that can be used with either a newly built home or with an existing one through resale programmes from housing associations. Through the scheme you buy a share of your home (minimum 25% and maximum 75% of the home’s value) and pay rent on the remaining share. Later on, you could buy bigger shares of the home when you can afford to, through a process called staircasing. In England you could be eligible if:
- Your household earns £80,000 a year or less outside London, or your household earns £90,000 a year or less in London
- You are a first-time buyer, you used to own a home but can’t afford to buy one now or are an existing shared owner looking to move.
You will need to take out a mortgage to pay for your share of the home’s purchase price, or fund this through your savings. Shared Ownership properties are always leasehold. Remember for Shared Ownership, in addition to any maintenance and service charge costs, you will need to pay the rent on the proportion of the property you do not own. The rent is usually 3% of the unsold equity. To find out of shared ownership is available in the area you would like to live, you can speak to the Housing team in the local council, or housing association. Not all lenders will give a shared ownership mortgage, but many of the major lenders will do so. Please get in touch to discuss further and we will be happy to help.
Help to Buy mortgages
The Help-to-Buy equity loan scheme is due to close in March 2023.If you’re buying a new build property in England, you may be eligible for the government’s Help to Buy equity loan scheme.
You will only need to put down a 5% deposit. The government will lend you a further 20% (or up to 40% in Greater London) of the property price interest-free for the first five years, so you’ll only need a mortgage for 75% of the buying price (or a mortgage of 55% in Greater London). Equity loans are available to first time buyers as well as homeowners looking to move. The home you want to buy must be newly built with a price tag of up to £600,000.
You must not own any other property at the time you buy your new home with a Help to Buy: Equity Loan. This scheme is available in England only. Other schemes are available in other parts of the UK. For more information, please visit the government website by clicking here.
Please note that by clicking on the link above you will leave Your Mortgage Experts’ website. Your Mortgage Experts has no control or responsibility for the pages you are about to access, or to where any subsequent links may take you.