Mortgage for first time buyers

Made for first time buyers

Buying a home for the first time is an extremely exciting time for any first time buyer, however it can be a whirlwind full of questions and trials. Here we look at what it entails to obtain a mortgage for a first-time buyer and hopefully help you on the way to the first step on the property ladder.


Eligibility for a mortgage for a first time buyer


To be classed as a first-time buyer you must not have had a mortgage before, this applies to all applicants of the mortgage for example if you have not had a mortgage previously but you are buying with a partner who has you are not eligible for first time buyer mortgage status. This also applies if parents or grandparents are buying the property for you and they have had a mortgage.


What mortgages are available for first time buyers?


There are various mortgages available for first time buyers and our experts will be able to guide you on what is right for you and your affordability status. The main two segments that first time buyer mortgages can be split into are repayment and interest only.
Capital repayment mortgages for 1st time buyers are often slightly more expensive for your monthly payments but are advisable as you are actually repaying some of the loan you have taken. Interest only mortgages do not take any payments off the loan and simply pay the interest.  The best advice we can give is if possible and you can afford a repayment mortgage then to opt for this as it will in turn help you in the long run.

How much deposit do I need for a mortgage for a first time buyer?


Depending on the lender and the deal that is obtained for the mortgage for the first-time buyer sometimes as little as 5% of the property value is needed for a deposit. However, the bigger deposit that you are able to put down regardless of the mortgage deal obtained is best to ensure the best value deals and repayment options.
The reason for this is the more deposit that you are able to put down on the mortgage means there is less risk for the lender giving you more options when it comes to mortgage deals. The better the mortgage deal the less interest you will pay for the duration of the mortgage which is always for the best. 

How is affordability worked out for a mortgage for a first-time buyer?

When a lender is looking to agree a mortgage for a first-time buyer, they will do an affordability check on whoever is going to be named on the mortgage. When you are thinking of applying for a mortgage for the first time before you do so it is useful to use one of the online tools or to speak to one of our experts to check your affordability before you apply to save on unnecessary credit checks and to understand exactly what you can afford and the houses you are able to realistically look at purchasing.
It is not only the cost of the actual home you are looking to purchase that you need to take into account when figuring out mortgage affordability. Other things that you should take into account include:
  • Valuation costs
  • Estate agent fees
  • Legal fees
  • Surveyors’ costs
  • Moving costs
  • Home improvement costs
  • Maintenance and repairs
  • Ground rent
  • Insurance
  • Utility bills
  • Council tax


How can you improve your chances of being accepted for a first time buyers mortgage?

It has become increasingly difficult for mortgages to be agreed given the cost of living has increased and wages not so much. To improve your chances of obtaining a 1st time buyers mortgage it is important that you look after your credit score as this is a big thing lenders will look at. Make sure that you do not miss repayments on any credit agreements that you have and try to ensure that your outgoings are lower than your incomings. When you are looking to apply for a mortgage a good tip is to ensure that you are on the electoral register also as this will help. Payday loans and cash withdrawal from credit cards can hinder your credit score so always avoid this if possible. Overdrafts should also be only used if really essential and always make sure that you clear the overdraft and are in the green more than the red with your banking habits.
It may seem like a daunting task applying for a mortgage for a first time buyer but our experts are on hand to guide you through the process every step of the way and to help make sure this is an enjoyable and exciting time for you in the next stage of your life. Contact one of our friendly advisors today if you have any questions or of you are thinking of applying for a mortgage for the first time and we will be more than happy to help.
Disclaimer: As a mortgage is secured against your home, it could be repossessed if you do not keep up the mortgage repayments.

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