First time buyer mortgages
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First time buyer mortgages
There’s no denying the excitement that comes with buying your first home and if you’re thinking about taking the leap into property ownership, you’re probably already experiencing the buzz that comes with it. But, the process can be daunting, especially when it comes to financing your purchase. Unless you have a bottomless savings pot – and let’s face it, who does? – you’ll need to secure a first time buyer mortgage.
At Everest Mortgages, we make the process of finding the right first time buyer mortgage simpler, faster and a lot less stressful, so you can focus on finding the perfect property.
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What is a first time buyer mortgage?
Before you get too far into your property buying journey, you’ll need to get a first time buyer mortgage. There are a range of first time buyer mortgage options available – including fixed rate mortgages, flexible mortgages and no deposit mortgages – and they’re all designed for people who haven’t owned a residential property before.
If you currently own or have previously owned a property, or if you’re buying a property with someone who has previously owned a home, you might not be considered a first time buyer and some lenders might rule you out. This is why it’s a good idea to work with an expert mortgage broker, like Everest Mortgages, as we can ensure you’re on the right path.
What makes first time buyer mortgages different?
First time buyer mortgages are designed with new homeowners in mind, with the aim of helping people get onto the property ladder. This means they often have lower deposit requirements and special incentives, in the hope of drawing you in and giving you a better shot at getting on the property ladder.
With house prices rising and deposits feeling impossible to save, these specialist mortgages can make your first home more affordable. That’s why a number of first time buyer mortgages fall into the 100% mortgage or 95% mortgage category, meaning you only need a small deposit.
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Choosing the best mortgage as a first time buyer
There’s no shortage of first time buyer mortgages out there, which can make it hard to narrow down your options and find the best one for you. Here are some of the key things to consider:
- Your deposit – The size of your deposit will have an impact on the mortgages that are available to you. If you have a large deposit, you’re likely to feel as though the world is your oyster. But, if you only have a small deposit, you might be limited to 100% mortgages and 95% mortgages.
- Fees and incentives – There are various costs to pay when you buy a home, including mortgage fees, but some lenders will offer reduced fees and incentives to help first time buyers.
- Your credit score – Lenders will take a close look at your credit report and credit score to determine your eligibility for a first time buyer mortgage, and they will also use this to decide the rate you’re offered. If you have good credit, you’ll usually be offered a better deal.
- Mortgage type – It’s important to compare all of your mortgage options. Decide whether a fixed rate mortgage, variable rate or flexible mortgage suits your financial situation and long-term goals best, and then see what lenders have to offer.
What about family gifted deposit mortgages?
A family gifted deposit mortgage is designed for first time buyers who receive a financial gift from a family member, and that gift is being used to help cover all or part of their deposit. This approach tends to be used as a way to help buyers get onto the property ladder sooner.
To secure a family gifted deposit mortgage, you will usually have to confirm to lenders that the money is a gift and that the person gifting it doesn’t have a claim on the property. These mortgages are especially beneficial to buyers who may otherwise struggle to save a large deposit on their own.
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Here’s how getting a first time buyer mortgage works
As a first time buyer, getting a mortgage is probably a completely new experience, and the entire process can feel complicated. Luckily, once you have a good understanding of how the process works and the Everest Mortgages team working alongside you, everything becomes a lot simpler.
Save for a deposit
Before you do anything else, you’ll need to save up a deposit. For first time buyers, this is usually between 5% and 20% of the property value, but no deposit mortgages and family gifted deposit mortgages are available.
Find a mortgage Broker
This step is key to the process. You might be excited to get on Rightmove and search for a property, but you need to know what you can afford by searching over 100 lenders. That’s where we come in.
Receive a mortgage agreement in principle
Once your documents have been received, a mortgage agreement in principle can be obtained, which confirms how much the lender is willing to let you borrow.
Search for a property
Once you’re armed with a deposit and agreement in principle, it’s time to hit the property market and find a home that fits your budget, lifestyle and location.
Agree to purchase
It won’t be long before you find the home of your dreams, and then you can submit an offer and (hopefully!) have it accepted.
Find a solicitor
With a solicitor, you’ll be guided through the legal requirements by knowledgeable experts.
Compare first time buyer mortgages
There’s a number of first time buyer mortgages to choose from, so be sure to assess rates, fees and incentives to find the best one for you.
Submit your application
It’s then time to submit your mortgage application, which needs to include proof of your income, your credit history and proof of ID.
Complete a property survey and valuation
This step ensures the property is worth the purchase price, and the sellers aren’t trying to hide any structural issues from you.
Confirm the legal side of things
Your solicitor will check for planning issues, boundaries and anything else that needs to be cleared up, so you can go into the sale fully informed about what you’re buying.
Complete the sale
The final stage of getting a first time buyer mortgage and buying a home is to sign the paperwork, exchange contracts and receive the keys to your new home.
Frequently asked questions
Can a first time buyer get a 95% loan to value mortgage?
Yes, and a lot of first time buyers do. With a 95% loan to value mortgage, your deposit only needs to be 5% of the property value, making it easier to save up for your first home.
What costs are involved in buying your first home?
Along with the deposit, you’ll also need to cover the cost of solicitors, mortgage fees, valuations, property searches, removal costs and any renovations needed once you’re the owner.
How long does it take to get a first time buyer mortgage?
First time buyer mortgages take around the same amount of time as other mortgages. There’s a lot of legalities involved in buying a property, so the entire process usually takes a few months.
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