Getting A Mortgage As A First Time Buyer

Buying your first home comes with a mixture of emotions. Owning a property is a really exciting prospect, but the practicalities associated with actually buying a property can be quite daunting. Understandably, most first time buyers feel quite overwhelmed when they start looking into getting a mortgage and there is a lot to get your head around. In an attempt to help anyone who is completely new to homeownership, below we have put together a guide covering the basics you need to know about getting a mortgage as a first time buyer. 

The pros and cons of being a first time buyer 

There are a number of advantages to being a first time buyer, so let’s get the disadvantages out of the way first - although there really aren’t many of them. One thing that you may notice as a first time buyer is that your credit score could do with some improvement. Previously having a mortgage can actually help to increase your credit score, when you make all required repayments on time, and having a good credit score can help you get a competitive mortgage. 

Thankfully, there are things you can do as a first time buyer to boost your credit score before you apply for your first mortgage and you can still get a good mortgage deal. It is beneficial to find out what your current credit score is and then spend some time trying to increase this, doing so could help to improve the mortgage offers you receive from providers. 

On to the benefits of being a first time buyer. Alongside benefits such as; not having a chain to worry about or a property to try and sell, there are lots of financial benefits to be aware of too. As a first time buyer, you might qualify for a number of different Help to Buy Schemes that aren’t available to other buyers. Not to mention, you might also be exempt from paying Stamp Duty Land Tax (SDLT) as well, saving yourself thousands of pounds. 

An example of a brilliant Help to Buy Scheme is the new 2021 scheme from the Government. This equity loan scheme allows first time buyers to purchase a new-build property with only a 5% deposit. A mortgage provider will then lend you up to 75% Loan to Value (LTV) and the Government will provide the missing 20% as an ‘equity loan’. This can be incredibly useful when you’re struggling to save for a 10% deposit on a property. 

Mortgage options available for first time buyers

There are lots of different types of mortgages available and when you plan on living in the property you purchase yourself, two of the most commonly sought after mortgages are; residential mortgages and shared ownership mortgages

Residential mortgages

As the name suggests, a residential mortgage is designed specifically for residential properties. So, when you’re buying your first home, it is highly likely that you will require this type of mortgage. When taking out a residential mortgage, you will need to borrow enough money to pay for the whole property, minus the deposit you’re putting down yourself. 

Shared ownership mortgages 

This type of mortgage is slightly different from a residential mortgage and it is a great way to get your foot on the housing ladder. Shared ownership mortgages tend to be available for either new homes or second-hand homes through housing associations. When you have a shared ownership mortgage, you will only own part of a property, often between 25% and 75% and you will therefore need to borrow less money from a mortgage provider. 

Speaking to an expert about a first time buyer mortgage 

If you’re at a stage in your life when you’d like to purchase your first home, don’t hesitate to contact our mortgage advisors in Maidenhead. At Mortgage Required, we really enjoy helping first time buyers purchase their first homes and we will gladly provide you with the comprehensive mortgage advice you need. Our team of mortgage brokers will cut through the jargon and search the whole market to find the best product for your individual needs. We can even assist you with the application process and we can usually get your mortgage agreed in principle within 30 minutes. To find out more about how our independent mortgage advisors in Maidenhead can assist you, explore the rest of our website today. 

Your home may be repossessed if you do not keep up repayments on your mortgage.

There will be no fee for Mortgage Advice. There may be a fee for arranging a mortgage. The precise amount will depend upon your circumstances, but we estimate it to be £399.

Mortgage Required Ltd, Finance House, 5 Bath Road, Maidenhead, SL6 4AQ is authorised and regulated by the Financial Conduct Authority reference 573718 at www.fca.org.uk.

The Financial Ombudsman Service is an agency for arbitrating on unresolved complaints between regulated firms and their clients. More detail can be found on their website: www.financial-ombudsman.org.uk