First Time Buyer Mortgage AdviceJumping on the property ladder may feel like a discouraging task and one that is out of your reach. Now while we are not saying that you can just walk right up and get a first time buyer mortgage on just about anything, it isn`t impossible, far from it and it could be the best decision you ever make. There really is no need to despair First Choice Finance will be with you every step of the way through your very first mortgage, in fact we can be with you every step of the way for all of your mortgaging needs, when you come to remortgage, when you want to move up the property ladder or even if you want a buy to let mortgage. We will be there the whole time giving you the best mortgage we can.
The first key piece of advice we can give you for a first time buyer mortgage or a home mover mortgage, is to save, save and save some more. The best way to secure a great deal is to have the biggest deposit you possibly can. The bigger your deposit the lower your Loan to Value and generally the better rate you can secure. To get a general idea of payments take a look at our repayment calculator for your mortgage or better still give us a call or fill in our on line enquiry form and see just how low the payments may be, they could even be lower than rent you are already paying.
Ownership Options for First Time buyersThere are many routes you can look into for first time buyer mortgages. One of which is considering different ownership options that may be available to you. If you can see the value of owning your own property but fear that the costs are just too high for what you need, well it may be worth seeing if there are shared ownership or shared equity properties that are better suited to your situation. We can organise the mortgage for you, all you have to do is find the property. First though, let us explain how they might be the cheaper option:
Shared ownership- They help people get there feet on the property ladder if you can`t buy a whole property alone. They allow you to buy a share in a property with another party (normally a housing association) and then you will usually pay them rent on their share of the property as you live in the house by yourself. They normally offer the option to increase your share in the property as time goes on so that eventually you can earn 100%.
Shared equity- Unlike with shared ownership, in shared equity the first time buyer owns the property, with as little as 5% deposit. The mortgage covers around 75% to 80% of the property and the rest, 15 to 20% is a shared equity loan to account for the rest of the deposit. The loan can be repaid at the sale of the property or as and when the homeowner can afford it.
There are also many home buy schemes available only to first time buyer mortgages that could reduce the cost of buying your first property. The government backed ones can involve you a new home builder and the government. Basically you put a small deposit of around 5% and take on a mortgage to cover about another 80% or so, the rest of the equity is held by the government until you sell. As you can see this has similarities to the shared equity mortgage structure. However, before you right off taking out a regular first time buyer mortgage as being too expensive, the various ownership options do not always work out cheaper. As if the different mortgage types available weren`t already confusing enough those available to first time buyers can be even more dumbfounding so it is best to seek out advice from somebody who is used to dealing with mortgages.
As a First Time Buyer how much can I Borrow?This question isn`t quite as simple as you may think. Lets break it down for you.
Firstly we need to know how much you have saved. Depending on what mortgage you go for the minimum deposit you would need is a 5% deposit plus some extra money for things like solicitors costs. Obviously the bigger deposit you can save, the less equity has to be mortgaged by the lender and the better rate you will be offered on your first time buyer mortgage. The lower the rate of interest you can obtain the more you can afford to borrow.
What is your financial position like? Lenders need to know that they are lending responsibly to a person or persons who can meet the mortgage repayments and as a result you will need to be able to demonstrate affordability, this is a key part of your First Choice Advisers role - they will help you get this area right.
If you come to First Choice for your first time buyer mortgage we can establish how much you can borrow and even provide you with an agreement in principle from the lender stating how much they are willing to lend to you subject to passing their criteria. As a rough guide some lenders will let you borrow up to a maximum of four times your gross income.
So I know how much I can Borrow, but what can I Afford?It is never wise to overshoot what you can afford on your first or any other mortgage; even if the lender is willing to lend you more money you should just borrow what you need to achieve your goal. We will do a thorough affordability check to help ensure you can keep up the repayments in normal circumstances. There are two main components:
- What is your total income?
- What are your detailed outgoings?
By asking the right questions and analysing the numbers you give us it can be quite straightforward getting through this part of securing your purchase mortgage.
Not only that but we will help you budget so as to be able to afford any extra costs. These range from booking fees to solicitors costs and can build up to thousands of pounds.
Once we have helped you to establish how much you can borrow and how much you can afford you have the perfect kit to go house hunting and be ahead of the pack. Or if you have found your home you can make an offer. We can assure you we will get everything in place first and then do everything we can to help you secure your first time buyer mortgage on the house you have chosen to be your new home. Give us a call on 0800 298 3000 (landline) or 0333 0031505 (mobile), if you want us to call you fill in our short online form and we can start the ball rolling; experience has shown us that it is never too soon to start the process.
THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME.
Established In 1988. Company Registration Number 2316399. Authorised & Regulated By The Financial Conduct Authority (FCA). Firm Reference Number 302981. Mortgages & Homeowner Secured Loans Are Secured On Your Home. We Advice Upon & Arrange Mortgages & Loans. We Are Not A Lender.
First Choice Finance is a trading style of First Choice Funding Limited of The Old Courtyard, 103 Buxton Road, High Lane, Stockport, Cheshire. SK6 8DX. Copyright protected.