We’re here to take the hard work out of finding your money-saving mortgage. Understand first time buyer mortgage requirements and the process with our guide.
The first step in the first-time buyer mortgage process is understanding how much you can borrow. As a first time buyer, you should get a calculation of how much you can borrow based on your income and how much you’ll expect to pay back each month. When you’re ready, we can talk about rates and applications.
To qualify for a first-time buyer mortgage, you'll need to meet your chosen lender's eligibility criteria. This usually includes passing affordability and credit checks, proving your income, and having a deposit, which is typically at least 5% of the property's value. Lenders will also look at your employment status, existing financial commitments and credit score.
Your home may be repossessed if you do not keep up with your mortgage repayments. There may be a fee for mortgage advice. The actual amount you pay will depend on your circumstances. The fee is up to 1%, but a typical fee is £499.
VIEW FULL FEE DETAILSA mortgage is a large loan that is secured against a property. The mortgage provider (lender) will lend you money which you will add to your deposit and this will allow you to purchase the property. The loan is held against the property until it’s paid off. You pay back the mortgage over time, in a manner that will depend on the specific mortgage product taken out.
It's much easier to navigate the mortgage process when you have a broker who really understands your situation and budget. The best mortgage brokers will pull together all the information you need, spending time with you to get everything perfect.
A broker will ask you questions like:
A broker will then research the mortgage rates on offer and look at the market to provide you with clear, relevant first time buyer mortgage advice you can use with confidence. That way, when you're ready to make a decision, you can do so knowing that you've got all the facts.
When buying a property, you will need to pay a deposit. This is a significant amount of money that goes towards the cost of the property you’re buying.The more deposit you have, the lower your interest rate could be.
When talking about mortgages, you might hear people mentioning “Loan to Value” or LTV. This might sound complicated, but it’s simply the amount of your home you own outright, compared to the amount that is secured against a mortgage. For example, with a £20,000 deposit on a £200,000 property, the deposit is 10% of the price of the property, and the LTV is the remaining 90%. The mortgage is secured against this 90% portion.
The lower the LTV, the lower your interest rate is likely to be. This is because the lender takes less risk with a smaller loan. The cheapest rates are typically available for people with a 40% deposit.
Yes, although it can be complicated and you should expect to pay a higher interest rate. There are mortgage lenders out there who specifically help people in a less than perfect financial situation and this is where professional mortgage services, like Mortgage Scout, can help you compare mortgage rates to find the most competitive deal.
Congratulations, you have just received your mortgage offer, however, there’s still some work to do! You should now be speaking to your broker about the necessary protection, such as Life cover & buildings insurance.
It is your solicitor who takes over from this point. The solicitor will have received a copy of your mortgage offer, and will be applying for your local searches, speaking to your seller’s solicitors and satisfying the conditions on the mortgage offer. Your solicitor will also be asking you to provide them with various documents.
