First time buyer mortgages
With a wide range of lenders to choose from and Government schemes such as Shared Ownership, there are now many avenues to get your foot on the property ladder.
Get startedInitially first-time buyer mortgages can seem overwhelming but by speaking to us, we can explain everything involved with buying a property along with the process of buying one and run through the typical costs involved.
Getting started
To begin with, you need to establish not just what you feel you can afford each month, but also what a lender calculates is affordable for you. All lenders have their own affordability calculators, which will often come up with very different amounts to lend.
We will be able to advise you which lenders will consider your situation in the best possible way. Once you know this then, if you feel that this is affordable on a monthly basis, you can work out what price property you can consider buying.
Types of interest rates
Once you have reached a conclusion on the amount you are borrowing then you need to decide what type of interest rate you would prefer on your mortgage. The main ones to consider are:
Fixed rate
This is where the interest rate is fixed for a period of time, giving you security that your monthly payments will not alter for the period of the fixed rate.
Capped rate
This is similar to the fixed rate above, except that if rates drop during the capped rate period then your rate can reduce.
Tracker rate
This is where a mortgage is on a variable rate that is a margin above the Bank of England Base Rate, for a period of time. Then, if the Bank of England increase their rates, your interest rate will increase by the same amount. Conversely if Base Rates drop then yours will drop too.
Variable rate
This is where a mortgage is charged interest at the lender's variable rate, and any changes to this rate are then reflected in your rate.
Getting a Decision in Principle
As a first time buyer you need to get your mortgage approved. This involves giving your information to a lender for them to check and confirm they are happy to lend a certain amount to you.
Not only will this will give you peace of mind that the mortgage is available, but it is likely to be needed to be shown to an estate agent prior to viewing a property. It will show them that you are in a position to buy a property if you like it.
In most instances we can obtain this within half an hour, although if your situation is complicated this could take longer.
Applying for a mortgage
Once you've found a property you would like to buy, then you need to apply for your mortgage. To do this you will need to send certain documents to the lender, such as payslips and bank statements.
As mortgage advisors, we will help you through this whole process. We will calculate how much you can borrow, we will recommend the right mortgage and set it up the best way for your circumstances. Then, we will submit the application and paperwork to the lender, and liaise with yourself, the lender, the estate agent and the solicitor to ensure things move through to completion as smoothly as possible.
FAQs
How much deposit do I need?
Mortgages are generally available with only a 5% deposit, although increasing this to 10% or more will bring greater choices and generally lower rates of interest.
How much Stamp Duty (SDLT) will I pay?
As long as one of the purchasors has not bought a property previously, then you will be eligible for a lower Stamp Duty Land Tax, this is calculated on the following basis:
- Stamp Duty is exempt up to £425,000
- 5% Stamp Duty payable on the portion between £425,001 and £625,000
- If the purchase price is greater than £625,000, then you will be subject to the standard SDLT rates. The calculation is zero on the first £250,000, the next £650,000 is charged at 5%, 10% on the next £575,000, and 12% on any portion above that.
How much can I borrow?
All lenders have complex affordability calculators which take into account not just your income, but also among other things the number of people living in the property, the cost of any credit commitments and the length of time the mortgage is over.
There are many different calculators, meaning the amount a lender will consider lending will vary from one lender to another. Often these tend to work out around 4.5 to 4.75 times income, although there are some that will consider up to 6 times income.
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About us
In 2022 we celebrated 30 years of providing first-class whole of market mortgage advice to clients across the UK surpassing £2 billion pounds of client borrowing with the UK's most respected banks, building societies and specialist mortgage lenders.
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Premier Mortgage Services is an Appointed Representative of Stonebridge Mortgage Solutions Ltd which is authorised and regulated by the Financial Conduct Authority.
There may be a fee for arranging your mortgage and the precise amount will depend on your circumstances. Our initial consultations are free, always.
Your home may be repossessed if you do not keep up repayments on your mortgage.