First Time Buyer

Get in touch

[]
1 Step 1
keyboard_arrow_leftPrevious
Nextkeyboard_arrow_right

Email communications are not secure and for this reason, Better Financial Services Ltd cannot guarantee the security of the email, its contents or that it remains virus free once sent.

We will use your name, email address and contact number (‘personal information’) to contact you about the services you have requested or respond to an enquiry you have submitted, which will require us to share your personal information with our advisers. For further information on how your information is used, including disclosure to third parties, how we maintain security of your information and your rights in relation to the information we hold about you, please see our Privacy policy

What is a First time buyer

Anyone looking to buy their first home is a first time buyer. The process is no different than for other mortgage applicants, although it’s more difficult to find a lender who will accept you. 

Getting onto the property ladder in the UK has become increasingly difficult for first time buyers in recent years. Partially due to the economic collapse and by no means helped by the onset of coronavirus, lenders are more cautious than ever to approve mortgages.

The key to a successful application is knowledge and preparation. Below are some important points to consider before you apply for your first mortgage.

What is an Agreement Principle?

An agreement in principle (AIP) is a conditional mortgage offer from a lender. You can obtain this prior to choosing your property and it sometimes helps to persuade the seller that you are a serious buyer.

The conditional offer will be based on a first look at your financial situation and credit score. Once you decide to go through with the application, you have to provide proof of income and financial reliability.

How much can a FTB Borrow

With regards to the amount that you can borrow, this will be calculated by the lender based on your financial circumstances. For example, your income, outgoings, credit score and whether the application is joint or single. The fact that you are a first time buyer in itself, should not affect your loan amount.

How do I Know what my Credit Score is – How do I Improve it?

As you will need to have a good credit score to have your mortgage application accepted, it’s important to improve low scores ahead of time. There are a range of things you can do to prepare your credit rating for your application:

  • Make sure you are on the electoral roll
  • Check all open accounts and ensure your current address is correct on them
  • Stay within 50% of your available credit limits for the 12 months prior
  • Make sure all payments are timely in the period prior to your application.
  • If you’ve never had credit, you can use a special credit builder credit card to help improve your score.

What Deposit is Needed for a FTB?

How much deposit you require will depend on the type of mortgage deal you decide on. A standard residential mortgage will typically expect a first time buyer to provide 10%-20% of the property price.

There are a range of government backed schemes designed to help first time buyers, however. If you choose one of these options, you will not usually need such a high deposit, with some accepting as low as 5%.

What help is available for FTB’s

Help to Buy

The help to buy scheme is only available to those wanting to purchase a newly built home. It offers you an equity loan from the government to cover up to 20% of the total value of the property. This reduces your deposit amount to just 5%.

Shared Ownership

This scheme allows you to purchase a share of the property, rather than the whole property. You therefore only have to pay the deposit for the share of the property you’re purchasing and lower mortgage payments. You also pay rent on this type of mortgage, usually to a local authority, who owns the remaining share of your home.

Right to Buy

If you’re a tenant in a local authority or housing association property, you may be able to purchase it. Local authority and housing association properties are often sold at a large discount.

WHAT HELP IS AVAILABLE FOR FTB’S

A number of costs are involved with applying for a mortgage on top of deposit and interest rates. These include arrangement fees, charged by the lender as well as valuation and legal fees, by your solicitor.

When you purchase a UK home, stamp duty is usually charged by the government. This fee is based on the cost of your home and varies depending on the size and value of your home. There is currently an extended stamp duty holiday, however. In order to take advantage of this, you can purchase any property under £500,000 before 31 March 2021.

How can a Mortgage Broker Help if you are a First Time Buyer?

There’s a lot to consider when you purchase your first home. As a first time buyer, there are a wide range of options available and it can be an overwhelming burden to choose the best one for you.

A mortgage broker can help you to find the best mortgage rates available to you. They have a whole market view, which allows them to see offers from lenders that you may not have considered.

Experienced mortgage brokers can also help strengthen your application. They know which lenders are most likely to accept and can ensure you fully meet their criteria. This will save you time, money and potentially, disappointment.

Socials

What is an Agreement in Principle (AIP) and do I need one?

An agreement in principle (AIP) is a conditional mortgage offer from a lender. You can obtain this prior to choosing your property and it sometimes helps to persuade the seller that you are a serious buyer. This is particularly true if you are a first time buyer.

The conditional offer will be based on a first look at your financial situation and credit score. Once you decide to go through with the application, you’ll have to provide proof of your income and financial reliability.

Am I a first time buyer?

Anyone looking to buy their first home is a first time buyer. The process is no different than for other mortgage applicants, although it’s more difficult to find a lender who will accept you. 

Getting onto the property ladder in the UK has become increasingly difficult for first time buyers in recent years. Partially due to the economic collapse and by no means helped by the onset of coronavirus, lenders are more cautious than ever to approve mortgages.

The key to a successful application is knowledge and preparation. A mortgage broker can help you to better prepare for your mortgage application.

 

A mortgage is a loan secured against your home. Your home may be repossessed if you do not keep up repayments on your mortgage or any other loan secured on it. 

First Time Buyer
First Time Buyer

USEFUL LINKS

First Time Buyer

Why Choose Us

Podcast Interviews With The Better FS Team