First Time Buyer Mortgages
The Most Suitable Mortgage Advice
We understand buying your first home will be a daunting prospect and a big investment of your time and money. Where do you start looking for the right mortgage?
The prospect of trawling the internet or booking an appointment with the local high street lender will involve hours of research time and can often be confusing.
As a First Time Buyer you will want to ensure the purchase of your first home is in safe hands and the advice you receive is structured to suit your needs.
Think carefully before securing other debts against your home.
Consolidating debt may reduce your outgoings now, however you may pay more interest over your mortgage term.
Your home may be repossessed if you do not keep up repayments on your mortgage.
Where do you start?
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Frequently asked questions
1What is a mortgage?
A mortgage is a loan taken out to buy a property. The amount you borrow is secured against the value of the property and is paid back over the term of your mortgage – typically 25 years. The amount you need to borrow depends on the size of your deposit against the purchase price of your property.
2What is a first-time buyer?
If you've never owned a home, then you’re considered a first-time buyer. However, there may be occasions when one mortgage lender classes you as a first-time buyer, while another doesn’t.
Typically, you’re considered a first-time buyer if:
You’ve never owned a residential property either in the UK or abroad, or
You only own – or have only owned – a commercial property with no living space attached to it (for example, a pub with upstairs accommodation).
On the other hand, you’re probably not a first-time buyer if:
You’re buying a property with someone who owns, or has previously owned, a home
You’ve inherited a home, even if you never lived there and it’s since been sold
You’re having a property bought for you by someone who already owns their own home, such as a parent or guardian.
Always check with a lender if you’re unsure whether you qualify as a first-time buyer.
3How much can I borrow as a first-time buyer?
The amount a first-time buyer can borrow depends on a number of factors. A mortgage provider will work out how much you can afford to pay back each month by taking into account your credit rating and history, your income and expenses, and how much money you have for a deposit. As a first-time buyer, you’ll also need to consider how an increase in interest rates (see below) might affect your ability to pay back your mortgage.
4What is a loan to value ratio (LTV)?
Your loan to value ratio (LTV) is the amount you can borrow on a mortgage compared to the overall cost of a property. Mortgage lenders usually have a maximum LTV ratio they’re willing to offer you. For example, if you’re looking to buy a property worth £200,000 and the lender is only willing to lend you 90% of the property’s value, you’ll receive a mortgage of £180,000 and you’ll need a deposit of £20,000. As a general rule, the lower the LTV, the lower the rate of interest you might be charged.
