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Mortgage For First-Time-Buyers

Mortgages For First Buyers

Buying your first property is exciting as it can be scary, with the overwhelming amount of information online it sometimes can seem harder then it actually is but we’re here to simplify the process as much as possible.

Over the last couple of years, there have been many schemes put in place to help first-time buyers get on the property ladder such as – help-to-buy ISA, help to buy equity loan, shared ownership etc.


Help to Buy

Help to buy is a government-backed scheme created to help FTB get on the latter, it covers up to 20% of the cost for new build homes, meaning you’ll only take out a 75% mortgage with a 5% deposit which does make a difference if you’re having trouble saving for a deposit.

if you don’t have a lot of savings or the bank of mum and dad then help to buy could be a good option, the average loan for a FTB (First-time buyers) is just under £175,000, whereas a regular mortgage loan is about £220,000


How Much Can You Borrow?

Heres the big question, how much can you actually borrow on the mortgage and how is it calculated, prior to house hunting I would advise finding out how much you earn to avoid any disappointments.

Typically lenders will calculate the amount you can borrow based on your salary, it varies from lender to lender, typically you could be looking at 4x-5x your salary. Over recent times lender have tweaked their criteria slightly and now not only base it on your earning but also take your expenses into consideration. Have a look at the Nationwide Mortgage Calculator it will be able to give you an idea about affordability https://www.nationwide.co.uk/products/mortgages/our-mortgages/mortgage-calculators/mortgage-affordability-calculator

One thing to also bear in mind that your mortgage isn’t solely based on your salary and outgoings its also based on your credit, so the better the credit the better it works in your favour when applying for a mortgage.


Your Deposit

Cash is king! Ever heard that before? If not its something you’ll want to remember. Your deposit is very important, when buying a property as a first-time buyer you’ll typically need to be able to put down 10% of the property price as a deposit. for example, if the property is £150,000 they’ll expect you to put down, £15,000 in some cases depending on a few factors you may be able to get 5% deposit on your first property.


Fixed or Variable Mortgage

When applying for a mortgage you have a choice between choosing a fixed rate for a certain period of time or having a variable rate that can change at any time inline with the bank of England’s interest rate. For more information have a look at the link https://www.clearscore.com/mortgages/fixed-vs-variable-rate-mortgages

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