When buying a home most of us need to borrow money. This loan is secured on the property you are buying and should you fail to stick to the terms agreed it’s possible that the mortgage lender will take possession and then sell the property to pay off what is owed.
First-time buyers are new to the housing market and as such it’s generally recognised that they need some help either with raising a deposit or by way of a reduced rate of interest in the first few months or years.
The UK government offer various schemes including a help to buy scheme aimed at those buying their first home or a new home as well as various savings schemes including the Help to Buy ISA Scheme.
First Time Buyer Mortgages usually fall into two categories, namely;
- The repayment mortgage. This is usually a loan taken over say 25 years and repaid (with interest) in equal payments month-on-month. As the sum owed reduces the interest charged slowly reduces meaning that whilst the first few years will see little reduction in the outstanding sum owed, the last 10 years will see large amounts of capital being repaid. At the end of the loan period you will have repaid your loan and own your home outright.
- The Interest-Only Mortgage. This type of loan is, as the name suggests, a loan that you don’t repay until the end of your mortgage term. This reduces your monthly repayment but, at the end of the loan, you will need to repay the loan either from savings, a pension lump sum or even through the sale of your home! The advantage of low initial repayments should be balanced against the fact that you pay more interest over the term of the mortgage as the average outstanding debt remains much higher.
Many mortgage companies and lenders offer first-time buyers incentives and assistance including reduced interest rates and low arrangement fees. Contact Mortgage Required to see how we can best serve your needs today on 01628 507477.
Related articles:
Download our Free First Time Buyers Guide
Recent posts
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
Call: 01628 507477