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If you are a first time buyer, no doubt you will have several questions in mind. How much can I borrow? Which lender shall I go for? What is the best mortgage product for first time buyers? What options are there for me?
The best mortgage rates available for first time buyers are the ones with a high LTV (loan to value) ratio. This means that you pay a deposit as high as 40% to get the cheapest deal (around 4%) and bear in mind that usually you will incur early repayment charges with the lower rate mortgage deals. Getting a mortgage on a lower deposit will cost more but in most cases this is the only way as it takes quite a bit of time to get a high deposit. According to moneyfacts.co.uk, “As more people are struggling to afford the substantial deposits required to take that first step on property ladder, it is common place for the mortgage advance to represent at least 90% of the property value for many first time buyers”. So if you cannot afford much on a deposit, not all hope is lost!
If you are employed with a regular monthly income and are a first time buyer, it may pay to play it safe with a fixed rate mortgage for a term of at least 2 years till you get a handle on your mortgage.
The best tip is to speak to mortgage advisers in banks and building societies and don’t just stick to one or two banks. Get several quotes from lenders to help you get a good understanding and a suitable mortgage deal.
If you are employed with a regular monthly income and are a first time buyer, it may pay to play it safe with a fixed rate mortgage for a term of at least 2 years till you get a handle on your mortgage.
The best tip is to speak to mortgage advisers in banks and building societies and don’t just stick to one or two banks. Get several quotes from lenders to help you get a good understanding and a suitable mortgage deal.
There are plenty of first time buyer mortgages out there these days and the mortgage products include Shared ownership, guarantor led mortgages, 100% or zero deals and even 120% mortgages. If you are a key worker (e.g. fireman, nurse, policeman) you may be able to buy a house with a Housing Association lead mortgage.
As a first time buyer it is important think about how much you can afford to spend on your a mortgage and associated costs before you even start looking at buying. If you have a family it always pays to work out how much the bills and required household out goings will be. Never think of taking on a mortgage that you cannot afford as the risk of losing your home can be very high incase your income deteriorates or you have a period of low income.
As a first time buyer it is important think about how much you can afford to spend on your a mortgage and associated costs before you even start looking at buying. If you have a family it always pays to work out how much the bills and required household out goings will be. Never think of taking on a mortgage that you cannot afford as the risk of losing your home can be very high incase your income deteriorates or you have a period of low income.
First time buyers