First time buyer mortgages
Embarking on the journey of purchasing your first home is an exciting milestone in life. As a first-time buyer, navigating the world of mortgages can feel overwhelming, but it doesn't have to be daunting. Understanding the basics of first-time buyer mortgages is crucial in making informed decisions that align with your financial goals and aspirations of homeownership. From exploring different types of mortgages to learning about down payments and eligibility criteria, this introduction aims to provide you with the essential knowledge needed to confidently step into the realm of first-time buyer mortgages. Let's embark on this exciting journey together!
1
Am I classed as a first time buyer?
A first-time buyer is someone who is purchasing a home or property for the first time. This could be someone who has never owned a home before or someone who has not owned a home in a certain number of years, depending on the specific criteria set by lenders or government programs
2
How Much Deposit Do I Need?
the minimum deposit most lenders will accept is 5% but this will need to be matched with a very good credit score. There is talk of new government schemes coming in the near future of 1% deposits meaning you can mortgage 99% of the house value - this is a huge step on helping first time buyers get onto the property ladder. If your credit score is not perfect don't worry as lenders could consider lending to you with a 10%-15% deposit.
3
I am being gifted my deposit, is that Ok?
Absolutely, this is very common in first time buyers as parents raise money from there homes to help their children buy for the first time. Most lenders are happy with this and will either need a letter from the parents confirming they are gifting the funds or some proof of where the funds are coming from, this could be bank statements of the person gifting the deposit.
4
How much can I borrow being a first time buyer?
This comes down to many factors but most lenders will lend around 4.5 times your income minus any expenses such as credit commitments, child care etc. There are some lenders that will lend 5 times your income but this tends to be for the higher earners (£75,000 per annum +)
Every lender is slightly different on how they assess affordability so this is where brokers play the vital role in finding you the best deal at the best affordability.