First Time Buyer Specialist Mortgages

This may vary depending on your circumstances, however, for many lenders, your deposit should be at least 5% of the property’s value.

Remember, if you can save more and put down a larger deposit, then typically you should be able to get a lower interest rate on your mortgage.

There are government buying schemes available to get your first home, however, you and the house you are buying must meet certain criteria. Whilst we can still help you, take some time to understand the Help to Buy schemes in more detail, before getting started on your journey. Our advisers are also specialists in helping people use the Help to Buy scheme, and can guide you through the whole process. 

How much you could borrow would depend on your circumstances. For instance, lenders will undertake affordability checks, with your deposit, and credit history factoring into the decision.

A joint mortgage is when you take out a mortgage with someone else. This could be a spouse, partner, friend or family member. Both people on the mortgage will be responsible for payments. Joint mortgages are usually for two people, although some lenders will allow more. Bear in mind that the more people who are on the mortgage, the more people become liable for repayments.

LTV stands for loan-to-value ratio, and it is the amount of money you can borrow on a mortgage versus the overall worth of your property. For example, if the property you want to buy is worth £200k, and the lender will lend you 90% of its value, the mortgage will be £180,000 and your deposit will need to be £20,000. Most lenders will have a maximum LTV that they are willing to offer.

If this is your first time buying a house, you’ll probably come across the terms freehold and leasehold quite a lot in your search. 

Freehold means you own both the property and the land it sits on. Most houses you buy are freehold. Leasehold means that you will own the property but not the land it is on, and it remains this way for the length of your lease with the landowner. Most maisonettes and flats will be leasehold, meaning you will have to pay fees, such as service charges and ground rent.

There are pros and cons to each, which you should consider carefully before making a decision. It can be difficult for properties with short leases to sell on, and some lenders won’t consider a mortgage if the lease has less than 70 years left.

You may have come across the term ‘guarantor’ if you have rented in the past. A guarantor is someone who makes repayments if you can’t; in this case, they will repay your mortgage. A guarantor mortgage can be worthwhile exploring if you have no deposit or a very small one, are struggling to find a lender, or want to buy a more expensive house. Of course, you will need someone who is willing to sign as your guarantor. 

Asking someone to be your guarantor is a big commitment on their part, as they will be liable for your monthly mortgage payments if you can’t pay them. If they are then unable to pay, your home may be repossessed. Before committing to a guarantor mortgage, you and your potential guarantor should both seek legal advice.

If buying a home is out of your range at the moment, then a shared ownership scheme may make the prospect more affordable. Shared ownership involves buying a share of a house, then paying rent on the remaining share. If you are able to in the future, you can buy the remaining share.

Shared ownership should be considered carefully before committing. Splitting the ownership of a home may limit who you are able to sell to in the future, and any improvements will need to be approved in advance.

As with any financial commitments, always seek legal advice before becoming tied into a mortgage.

Although it will make up the bulk of your payment, your deposit isn’t the only expense you have to consider when buying a home, for the first time or otherwise.

Valuation fee – A valuation is carried out by the lender to determine if your house is worth the amount they are willing to lend you. The fee for a valuation varies between providers.

Survey fee – A survey is different from a valuation because it looks at the structure of the property along with any potential issues. This could include structural or building problems, or restrictions on planning permission. The cost of a survey can vary depending on the level of detail you require.

Arrangement fee – This is the fee you pay to take out a mortgage, and the price will vary among providers. Most will let you add the arrangement fee onto the mortgage itself which, although it sounds better than an upfront payment, means more interest in the long run.

Legal fees – This is the cost for solicitors to handle all the conveyancing involved with your purchase, and can range from £500 to upwards of £1,500.

Broker fees – This is a fee payable if you use a broker to secure your mortgage. Many brokers will earn their fee through a commission with the mortgage provider. Using a specialist mortgage broker can help you get access to more lenders and more favourable rates.

Stamp duty – This is a tax that is payable on any property purchase over £125,000 – or £300,000 if you’re a first time buyer. The rate increases as the value of your property goes up.