First Time Buyers...
We’re with you every step of the way
We’re with you every step of the way
Buying your first home is an exciting time – but there’s a great deal to think about and do. We’re here to support you through the whole process, every step of the way, from saving for a deposit right through too often forgotten costs.
You will be pleased to know we do not charge a fee for first time buyers, we figured you have enough costs to consider and every little helps.
Buying a home for the first time will probably be the most expensive purchase you will make and once you have decided to buy, you will need to consider the pros and cons of each option before you start the home buying process and remember to factor in the ongoing costs of maintaining the property once, it’s yours.
If you have decided that purchasing a house or flat is the right option for you, you will need to work out your budget. This means spending some time on your finances.
We don’t expect you to know what deal is best for you, that’s our job. Working with you and understanding your circumstances and needs we ensure we recommend the best mortgage to suit you.
Here is the general flow that you will need to know, the process usually takes between 10 to 18 weeks.
• Save the deposit
• Consider first-time buyer schemes from the Government
• Consider any Stamp Duty and factor in any costs
• Other associated costs such as legal and surveys
• Find a property
• Apply for a mortgage in principle with us
• Put in an offer
• Apply for a full mortgage acceptance
• Exchange contracts and complete
• Move in to your new home
A mortgage is a loan from a bank, building society or lender that lets you buy a property, either to live in, rent out or use as a second home. You then pay back the amount you have borrowed plus interest over an agreed period of time often around 25 years, although you can take them out over longer or shorter terms. The mortgage is secured against your property until you have paid it off in full.
You’ll usually need to put down a deposit for at least 5% of the property value, and a mortgage allows you to borrow the rest from a lender.
There are two main mortgages
Whether you are taking out a new mortgage, or considering changing your mortgage repayment type, it’s important to understand the differences between interest-only mortgages and repayment (capital and interest) mortgages, in terms of both how they work, and how much you’ll have to pay each month.
Interest-only mortgages have the advantage of lower monthly payments, but that’s because your payment only covers the interest being charged on the amount borrowed. The actual mortgage balance, or capital, doesn’t reduce over the mortgage term, but is repaid in full at the end or by lump sum reductions throughout, usually by means of a repayment vehicle such as an endowment policy, ISA or other investment plan. Lenders are not as keen on interest only mortgages recently and therefore the criteria is generally that you will need more than 40% deposit or equity in the property to gain one. That said lenders change their products pretty often, so it always best to check with us what is available and at what terms.
A repayment mortgage has a higher monthly payment than an equivalent interest-only mortgage, and that’s because each month a portion of the debt is being paid off, so by the end of the agreed mortgage term the balance has been reduced to zero. Because the mortgage capital is always reducing, this also means that you will typically pay less total interest over the overall mortgage term in comparison to an interest-only mortgage.
Mortgage interest rates vary with market conditions – at any given time there might be hundreds of different mortgage products on the market – and can also depend on factors such as the amount of deposit you’re able to put down, and your credit score.
Independent of the Bank of England Base Rate, enders set their own interest rate. Your payments can go up as well as down and are dependent on any changes in interest rates. An SVR is generally the lenders rate you will be moved on to, when an introductory fixed rate, tracker or discounted deal has completed.
A fixed rate mortgage has an interest rate which stays the same for a set period of time, generally 2, 3 or 5 or even 10 years Fixed rates provide you with peace of mind, as you know exactly what your monthly payments will be for the fixed term of the mortgage.
There is no fluctuation of interest rates for the fixed term and at the end of the period the fixed rate reverts to the lender’s standard variable rate (SVR). However, you can do a product transfer to another fixed rate and we will always advise you near to your end date to discuss what is available to you.
A discounted rate allows you to benefit from a reduction in the lender’s SVR. If this increases or decreases, the discounted rate does too. While different periods are available, either two, three or five years, usually the shorter the discounted period, the larger the discount for you.
A flexible mortgage as the name suggests, gives you flexibility around your payments. It allows you to overpay, underpay or even take a ‘payment holiday’. This provides you with the opportunity to pay your mortgage off early and save money on interest. However, because of this ability, flexible rate mortgages are usually more expensive than conventional ones. The different features for these types of mortgages also tend to differ, according to the lender chosen.
Tracker mortgages are usually linked to the Bank of England bank rate, which means they will change if this does. Other tracker rates follow the London Interbank Offer Rate (LIBOR).
Tracker rates are usually at a margin above the rate they follow. They can be for an introductory period or for the whole period of your mortgage. If you choose a tracker rate your mortgage will usually transfer to the SVR or an alternative tracker rate (with an increased margin) at the end of the initial term.
The best thing to do right now if you are looking for your first property is contact us, we are your experts and will explain everything to you as your guide through the whole journey