Getting on the property ladder is a big milestone, and when it comes to mortgages it feels like there’s a lot to learn.
We help First Time Buyers at every step – making sure you understand the process, setting your property budget, finding a home and getting a good mortgage deal.
What is a First Time Buyer?
A First Time Buyer is a term that describes anyone who is buying their first home. You can choose from all mortgage types, such as fixed rate, variable rate, repayment or interest-only mortgages. Most mortgages last 25 years, but shorter or longer mortgage terms are available.
Each mortgage type has its pros and cons. A qualified mortgage adviser will help you explore the options.
How much can I borrow as a First Time Buyer?
The first step to buy a property is to find out how much you could borrow. That will set your property budget so you can start looking at flats or houses.
You can usually borrow around four to five times your salary, and you will also need to put down a cash deposit.
It’s not always easy to get on the property ladder so the Government has introduced various initiatives to support First Time Buyers. Visit the Own Your Home website to explore shared ownership schemes, equity loans and the mortgage guarantee scheme.
How much deposit will I need?
Putting down a cash deposit is a crucial step in buying a home. While you can get some mortgages with just 5% of the purchase price in a deposit, we recommend saving at least 10% if you can.
The bigger your deposit, the smaller your monthly mortgage payments will be. Putting down a higher deposit will usually get you a wider choice of mortgage deals and better interest rates.
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What criteria do I need to meet?
Every mortgage lender will set slightly different criteria for a mortgage loan. You will only be accepted if you meet all these criteria. Typical requirements are that you have a decent credit score, you’ve been in your current job for a certain length of time, you don’t have too much debt and you meet the minimum requirement for a deposit.
One of the advantages of using a Mortgage Broker is that we help you narrow down the mortgage options to make sure that you match all the criteria.
How do I find out my credit score?
Your credit rating is one of the first things a lender will check when they consider you for a mortgage. It helps them understand how reliable you might be in repaying the loan. A bad credit score will not usually stop you buying a home, but it often means higher mortgage rates.
It’s easy to check your credit rating online, and if you work with a broker like Rebus, we’ll look at your credit score as part of the introductory meeting.
You can improve your credit rating by keeping your bank account in credit, paying all bills on time and clearing the balance on your credit card. Staying at the same address for 12 months or longer can help too.
What fees are involved when buying a house?
In addition to your deposit, there are various other fees and costs to plan for when buying a house. The good news is that Stamp Duty, a property tax, does not apply to First Time Buyers, up to a limit of £300,000. Most mortgages will charge a product fee, however, and you will also need to budget for legal fees, searches and property surveys.
Another important area is mortgage protection, including life insurance, income protection and home insurance, some of which may be required as part of your mortgage contract.
How can Rebus help me as a First Time Buyer?
Buying a home can be stressful, so Rebus is here to support and help you at every step. We’ll help you set your budget, explain the types of mortgage you can choose from and use a mortgage calculator to explore what your monthly payments might be.
We’ll get you a mortgage Agreement in Principle, which will help you make an offer on a property, and when you’re ready to apply for a mortgage we’ll help you through the full mortgage application process.
Just see us as your First Time Buyer guides – we’re here for your questions at any time, Monday to Friday. Contact us by telephone or email for a chat about how we can help you.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP WITH YOUR MORTGAGE REPAYMENTS