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First Time Buyer Mortgages

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How do I take out a first-time buyer mortgage?

A mortgage is simply a lumpsum you get from a lender to be able to pay for your home. You will need to pay back the lender with interest over a stipulated period.

To be able to get mortgage financing, the borrower is expected to put down a deposit. The amount required depends on the lending institution, your credit score and other aspects of your contract. Generally, the deposit can be as low as 5% or as high as 40% of the cost of the property.

The property you want to buy is the security for your mortgage loan. The interest of the lender is noted with the deed to the property at the land registry. This way, the lender can repossess the property if you default on your mortgage payment.

However, should your finance planning be in place and good order we expect defaulting on payments won’t be an issue. So now you can sit in the comfort of your own home, and allow us to take the time and effort to find the right mortgage product for you. Our panel of lenders is from the whole of the market, we provide a tailored best-fit recommendation that works for your personal circumstances and lifestyle.

What deposit do I need as a first-time buyer?

Typically, the minimum deposit lenders will accept is 5% of the property value. These are known as 95% mortgages. Whilst these are great if your deposit is on the smaller side, you do however tend to pay a little more on your monthly payments. Lots of our lenders ask for at least 10% of the property value as a deposit. However, a little known option currently being marketed as a 100% mortgage allows immediate family members savings or equity on their house to replace your deposit. Nevertheless, the more you can save up, the better the mortgage deals you’ll have to choose from – larger deposits and lower rates go hand in hand.

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When can't I qualify as a first-time buyer?

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Can I use a gifted deposit?

Yes, a gifted deposit is usually given by a family member and forms all or part of a deposit on a property for a first-time buyer. This comes in handy if you haven’t been able to save the minimum 5% deposit you need for most mortgages, or to help you increase your deposit to say 10% or 15% to secure a cheaper mortgage rate and lower monthly repayments.

How much can i borrow?

For single and joint applicants, lenders will usually lend in the region of four to five times your annual salary. Lenders also factor in your personal expenses, such as bills, debts, and childcare. It can also depend on the deposit you put down; a higher deposit might mean you are able to borrow more. With so many things to consider, using a mortgage broker is the best way to get a mortgage that works for you and your lifestyle.

I keep seeing SVR?

Standard Variable Rate is the lenders own variable rate. The SVR is not tied to the bank of England and varies completely lender to lender. Once they have come to an end, the vast majority of products will revert to this variable rate until a different product has been put in place.

What does freehold mean?

This is the tenure of which your property is owned. Freehold means that you own the property along with the land up to its boundaries in its entirety.

What are the outcomes of a DIP?

The lenders decision on the mortgage based on the initial information submitted and a credit check. Usually an ‘AIP’ submission is met with 3 answers; Accept – agreement to proceed subject to application, verification of the information provided & a satisfactory valuation. Referred – the lender requires more information on a specific parts of the application. Decline – based on the information provided and the lenders criteria, they are unwilling to proceed.