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Author: Elliott Culley - Director & Mortgage Adviser of Switch Mortgage Finance
As a first-time buyer, purchasing a home can seem like an overwhelming process. However, with the right guidance and support, buying your first property can be a rewarding experience.
As a mortgage broker our aim is to provide you everything you need to know about first time buyer mortgages.
Do I Qualify As a First Time Buyer?
A person is generally classified as a first time buyer if they’re buying their main residence, and have never owned a property in the UK or abroad.
If you are purchasing with somebody who already owns a house, you will not be classed as a first time buyer.
When Should I Apply For a First Time Buyer Mortgage?
It is never too early to start preparing for your first time buyer mortgage. In fact, it’s recommended to start preparing several months in advance.
This can include improving your credit score, reducing debt, saving for a deposit and finding out how much you can borrow.
We recommend that you apply for an agreement in principle before you start looking for properties. That way you can find out how much you can borrow and make sure you are looking at the right properties. By doing so, you’ll be in a stronger position to secure a first time buyer mortgage when the time comes
How Do First Time Buyer Mortgages Work?
A first time buyer mortgage is a loan used to purchase a property. The lender uses the property as security for the loan, and the buyer makes monthly repayments over a set term. There are various mortgage options available for first-time buyers, including fixed rate, variable rate, and tracker mortgages. It’s important to consider the different options and find the right mortgage that fits your needs.What Help Can First Time Buyers Get?
Various government schemes are available to help first-time buyers onto the property ladder. These include:-
- Lifetime ISA (LISA)
- Help to Buy ISA
- Help to Build Loan
- Mortgage Guarantee Scheme
- First Homes Scheme
- Shared Ownership
- Guarantor Mortgage
- Joint Borrower Sole Proprietor Mortgage
How Much Deposit Do First Time Buyers Need For a First Time Buyer Mortgage?
The deposit required for a first time buyer mortgage can vary, but typically ranges from 5% to 20% of the property value. A larger deposit will not only make you a more attractive candidate for a mortgage, but it may also result in a lower interest rate.Speak to an Expert!
Contact us today for expert advice and guidance on your unique mortgage and property needs. We will work with you on a one-on-one to basis to help you find the right solution for your needs.
With our experience you can rest assured that you are in good hands when it comes to securing the financing you need for your property.
Can a First Time Buyer Get a First Time Buyer Mortgage With a 5% Deposit?
Yes, some lenders offer first time buyer mortgages with a 5% deposit. However, keep in mind that the larger your deposit, the more options you’ll have and the better your chances of being approved for a mortgage.How Much Can I Borrow For a First Time Buyer Mortgage?
The amount you can borrow for a first time buyer mortgage will depend on various factors, including your income, outgoings, and credit history. The amount you can borrow varies between lenders, but the average mortgage lender will offer 4.49x your annual salary. However, some factors can reduce the total figure you can borrow, for example if you have any debts or if you have dependents. Some lenders will apply a higher figure than 4.49x, but this is dependent on other factors such as: These include:-
- Credit Score
- Annual Salary
- Deposit Size
- Any debts you have
Is It Easy for First Time Buyers to Get a Mortgage?
Buying your first house can be daunting experience and you are bound to have many questions. Obtaining a first time buyer mortgage can be easier than you think, but this depends on your overall profile.
How Can I Increase My Chances of Getting a First Time Buyer Mortgage?
If you are worried that you might not be approved then there are some steps you can take to increase your chances of being approved for a first time buyer mortgage. To increase your chances of getting a first time buyer mortgage, you can follow these steps:
- Register to Vote
- Manage your available credit carefully
- Close any inactive accounts
- Pay your bills on time and stay out of your overdraft
- Avoid applying for credit shortly before submitting your mortgage application
- Make sure you have all your documents prepared
By improving your credit score, demonstrating stable employment and income, and saving a larger deposit, you can increase your chances of being approved for a first time buyer mortgage.
Do First Time Buyers Pay Stamp Duty?
First Time Buyer are exempt from Stamp Duty on properties up to £425,000 and pay 5% on the portion between £425,001 and £625,000.
First Time Buyers who buy a property up to £625,000 will pay no Stamp Duty on the first £425,000 and only pay 5% on the remaining amount.
If the property costs more than £625,000, normal rates will apply.
Can I Get a Buy To Let as a First Time Buyer?
Yes, as a first-time buyer, you can purchase a buy-to-let property. However, keep in mind that getting a buy-to-let mortgage may require a larger deposit and have different eligibility criteria compared to a standard first time buyer mortgage.
Do First Time Buyers Pay Stamp Duty On Buy To Let?
In England and Northern Ireland, first-time buyers purchasing a buy-to-let property will pay stamp duty on the entire purchase price, regardless of the value of the property.
Why Choose Switch?
Becoming a first time homeowner is an exciting journey, and with the right guidance and support, the process of getting a first time buyer mortgage can be straightforward. If you have any questions or need further assistance, don’t hesitate to contact us for expert advice.
Why Switch Mortgage Finance
- Raising The standards of financial advice
- Making financial advice accessible to all
- Trusted & stress-free financial advice
- Friendly, personable advisors