First Time Buyer Mortgages

Obtaining a mortgage as a first-time buyer can have both advantages and challenges. First-time buyers may benefit from various programs designed to make entering the housing market easier, such as lower deposit requirements and government incentives. However, they might face challenges related to proving creditworthiness and income stability, especially if they have a limited credit history or are self-employed.

Yes, first-time buyers are eligible for mortgages from high street banks. Banks often have specific mortgage products tailored for first-time buyers, including those with lower deposit requirements or boosted affordability. Eligibility may depend on credit score, income, and other financial factors.

First-time buyers benefit from reduced stamp duty rates or exemptions to make homeownership more accessible. You can utilise our Stamp Duty Calculator to identify what your Stamp Duty could be.

The difficulty of securing your first mortgage can depend on various factors, including your credit score, income, and the size of your deposit. While employees with steady income and good credit scores might find it easier, self-employed individuals and those with fluctuating incomes may need to provide more comprehensive proof of earnings.

Lenders typically offer to lend around 4 to 5.5 times your annual income, but this can vary based on your overall financial situation. You can utilise our mortgage calculator to establish an idea of your borrowing potential. It’s essential to consider not just how much you can borrow but also how much you can afford to repay, taking into account other homeownership costs.

HMRC define a first-time buyer as “a purchaser must not, either alone or with others, have previously acquired a major interest in a dwelling or an equivalent interest in land situated anywhere in the world”. For mortgage lenders, individuals can regain first-time buyer status if they haven’t owned a property for a certain period, typically three years or more. Specific criteria for regaining this status can vary by lender.

The journey to purchasing a property generally takes between three to six months after an offer is accepted, navigating through critical milestones like the exchange and completion stages.

Exchange confirms the purchase with a formal agreement and a deposit (usually 10% of the property’s price), making the transaction legally binding.

Completion, following a week or two later, involves finalising the payment, transferring legal ownership, and receiving the keys to your new home.

A Freehold property, you own the building and the land it’s built on for as long as you want.

A Leasehold property, you own the property for a set period, but not the land it’s built on.

A property survey acts like a building health check, identifying potential costly issues before proceeding with a purchase. Discovering serious problems may lead you to renegotiate the price or reconsider your offer.

The choice of survey depends on the property type, desired detail level, and budget.

If you are purchasing a new build, an RICS condition report is often suitable, especially when the property is protected by a Buildmark or NHBC Certificate, ensuring a focused assessment tailored to the property’s condition and warranty coverage.

Shared Ownership offers a pathway for first-time buyers and those without a current home to own a portion of a property.

Buyers can finance the owned share through a mortgage and pay reduced rent on the remainder to a housing association. This arrangement typically requires a smaller deposit than buying a property outright.

Owners can gradually increase their ownership stake through ‘staircasing’ and potentially own 100% of the property, eliminating rent payments and only covering the mortgage, service charges, and ground rent.

A Joint Borrower, Sole Proprietor mortgage is a financial arrangement where multiple individuals can be responsible for a mortgage, yet only one of them holds legal ownership of the property. While both parties contribute to the mortgage payments, only one name appears on the property title.

This arrangement offers a more accessible path to homeownership, enabling clients to combine incomes for the mortgage application, potentially making it easier to qualify for a loan and purchase a property.

Guarantor mortgages are simply a mortgage that is guaranteed by another party, normally a parent or relative without being named on the ownership of the property.

Guarantors are assessed similarly to borrowers, with their income considered during the application process.

These mortgages are particularly beneficial for first-time buyers or those with lower incomes, enabling them to buy properties beyond their immediate financial reach.

Finding a property you like and having a mortgage in principle are great first steps.

Essentially, this is sufficient for the initial stages of purchasing a property.

Before you can proceed with a formal mortgage application, you must have an accepted offer on a property, as lenders use the property as security against the loan.