Mortgage advice for first time buyers
A helping hand with your first step onto the property ladder
A helping hand with your first step onto the property ladder
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Buying your first home is an incredibly exciting time
It can also be challenging and complicated as you discover everything that’s involved. Our advisers can help with the whole experience - helping you to navigate the world of mortgages and to making sure you get the deal that is most suitable for you. We’re here to guide you through the process - in fact, we’re here every step of the way.
Buying your first home
How much can I borrow?
How much you can borrow depends upon three points:
- Your income
- Your spending commitments
- How much you can put towards a deposit.
Our advisers will guide you through the details to help you understand your choices from the beginning.
Once a mortgage provider is chosen, they will go into more detail on the value of your new property and your credit score based on your credit history. The higher the score, the more likely you’ll be accepted for a mortgage – perhaps even a better rate.
How much do I need as a deposit?
Start by looking at the property prices in the area you want to live and work out how much you can afford to repay each month.
Mortgage providers have a maximum loan to value (LTV) they’re prepared to offer – this is the maximum amount you can take out as a percentage of the property value.
For example, if the property value is £200,000 and you’re offered a mortgage of £170,000, your LTV is 85% and you need a deposit of £30,000 (15%). A higher LTV ratio means more risk for the provider, so they may charge you higher interest rates and fees.
Buying your first home
How much you can borrow depends upon three points:
- Your income
- Your spending commitments
- How much you can put towards a deposit.
Our advisers will guide you through the details to help you understand your choices from the beginning.
Once a mortgage provider is chosen, they will go into more detail on the value of your new property and your credit score based on your credit history. The higher the score, the more likely you’ll be accepted for a mortgage – perhaps even a better rate.
Start by looking at the property prices in the area you want to live and work out how much you can afford to repay each month.
Mortgage providers have a maximum loan to value (LTV) they’re prepared to offer – this is the maximum amount you can take out as a percentage of the property value.
For example, if the property value is £200,000 and you’re offered a mortgage of £170,000, your LTV is 85% and you need a deposit of £30,000 (15%). A higher LTV ratio means more risk for the provider, so they may charge you higher interest rates and fees.
What type of mortgage do I need?
It can feel overwhelming to look at the different types of mortgages on offer. Our advisers are here to help you understand the different options and to help you find the best one for your circumstances.
But let’s take you through a few basic terms now to get you started:
What type of mortgage do I need?
A fixed rate mortgage means that, the interest rate you pay stays the same throughout the length of the deal – usually between two and five years.
The interest rate can change – usually linked to changes in the Bank of England base rate.
This the normal interest rate your mortgage provider charges – it varies based on changes to Bank of England base rate. If you have a standard variable rate mortgage, it will last the length of your mortgage or until you take out another deal.
The discount off the mortgage provider’s SVR and only applies for a certain length of time, usually two or three years.
The variable rate mortgage moves in line with another interest rate – normally the Bank of England’s base rate plus a few percent.
An offset mortgage links your savings and current account to your mortgage so that you only pay interest on the difference. You’ll still pay the mortgage as usual, but your savings act as an overpayment.
short list
This is just the short list! That’s why our advisers are here to talk you through the options and will work with you to find the best choice for you.
The cost of moving
When you’re thinking about buying your first home there are a lot of other costs to understand and plan for in your budgeting.
It all does add up but don't worry. Take a moment to look at all your expenses, so you can work out your budget plan.
And, as well as talking you through your mortgage options, our advisers can help you to understand the details and introduce you to other services, including valuations and conveyancing.
Stamp Duty
This is a tax you may have to pay depending on the property value in England and Northern Ireland. You’ll have to pay Land and Buildings Transaction Tax (LBTT) in Scotland and Land Transaction Tax (LTT) in Wales.
Valuation and Survey
Once you’ve made an offer on a new home, your mortgage company will want to have an independent confirmation of value and it’s a good idea for you to understand the condition of the building. The price will vary based on the type of survey and condition of the property.
Surveying and conveyancing are not regulated by the Financial Conduct Authority.
Conveyancing
The fees you pay to make sure the legal process completes properly to make you the legal owner of your first home.
Surveying and conveyancing are not regulated by the Financial Conduct Authority.
Removal fees
Even if this is the first property you’ve bought you may need to allow for costs to move from where you’re living now.