First Time Buyer Guides

The Mortgage Scout goal is to make first-time buyers feel confident enough to ask our mortgage advisers absolutely anything to do with buying their first property. We’re here to take the hard work out of finding your money saving mortgage. Make a start with our first-time buyers’ mortgage guide.

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A 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:

What are your plans for the future?
What type of job do you do?
What's your income and pay structure?
What are your family circumstances?

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.

Help to Buy (HTB) is a government scheme. It allows first-time buyers of a new build to borrow up to 20% of the property's value (or 40% in London). The loan is directly from the government and you pay the capital back when you sell.

In 2015, the government launched the HTB ISA, a savings account designed specifically to help you save for the deposit on your first home. As long as you follow the scheme rules and can prove that you've completed on your purchase, the government will pay a 25% bonus on your saved capital once you close the ISA.

HTB Equity Loan - The HTB Equity Loan scheme is available for new build properties with a purchase price of up to £600,000. The government will lend you up to 20% of the cost of a brand new home, meaning you only need a 5% cash deposit and a 75% mortgage. The equity loan is interest-free for the first five years. From year six, the government charges a fee of 1.75%, then RPI plus 1% per annum.

Help to Buy ‐ London - If your dream is to own a home in the capital, an adapted version of the Equity Loan scheme could be for you. The Government introduced a London-only version of Help to Buy in February 2016, available across all Greater London boroughs. You're eligible if you have a 5% deposit to put down on your new home. This version has an upper loan limit of up to 40% of your purchase price rather than the standard 20%, and works the same as the nationwide scheme.

With Help to Buy ‐ London, you won't be charged loan fees on the 40% loan for the first five years of owning your home, apart from a nominal monthly £1 per month fee.

They are available if you're a first-time buyer or a homeowner who wants to sell up and move, and you want to buy a brand new home with a purchase price of up to £600,000. You don't qualify if you own any other property, including a second home or any rental properties.

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.

Mortgage Calculators

Moving forward with your mortgage plans depends on how much you can borrow. Whether you’re a first time buyer, moving home, remortgaging or buying to let, our industry standard mortgage calculators gives you a quick and reliable calculation of monthly repayments. There’s a handy tool for calculating stamp duty too. So once you have your answers, ask Mortgage Scout to find you a money saving mortgage that matches your maths – simple.

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