First Time Buyer Mortgages
Are you looking to get your first property? Deedle Finance can help you take the exciting step towards homeownership with the help of our dedicated experts.
Our mortgage advisers can help you get the best mortgages for first time buyers. So what are you waiting for? Get on the property ladder today!
How To Get A Mortgage As A First Time Buyer
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What Are Mortgages For First Time Buyers?
First time buyer mortgages are for those who have never owned a property before of any kind, in the UK or abroad, including shared ownership schemes. It is also possible to qualify if you own a commercial property if it does not involve a living space.
You may not be eligible if you have inherited a property or someone else is buying the property for you in their name. Likewise, if you are buying a property with someone else who has owned a residential property before then you may not qualify. Nevertheless, some lenders may be more lenient if you have not owned a property for at least 12 months.
What Costs Are Involved In First Time Buyer Mortgages?
First time buyers will need to pay a deposit towards their property. A 10% deposit is the typical amount to pay for a deposit and ensures solids rates. However, the government has introduced a 5% deposit scheme for first time buyers on properties up to £600,000.
They may also need to pay stamp duty. Whilst first time buyers in England and Northern Ireland are exempt from paying stamp duty on properties costing up to £425,000, if your property costs between £425,001 and £625,000, you’ll have to pay 5% stamp duty on the value above £425,000. There is no stamp duty relief for homes priced over £625,000.
Other potential fees to consider include lender application fees, valuation fees, solicitor fees and survey fees. You may also need to spend money on moving costs and purchasing furniture such as a table and chairs.
Different Types of First Time Buyer Mortgages Available
Fixed Rate Mortgages
A fixed rate mortgage allows borrowers to fix their mortgage rate for 2 to 15 years.
Repayments stay the same during that time.
You can usually overpay by 10% a year to reduce the total loan amount. Any more than this could lead to early repayment charges.
Discount Variable Rate Mortgages
Discounted variable rate mortgages mean that borrowers get a discounted rate for some time, usually between 2 and 5 years.
These mortgages tend to have the lowest interest rates and lowest monthly repayments.
However, interest rates and monthly repayments can go up or down.
Tracker Mortgages For First Time Buyers
Tracker mortgages follow the Bank of England’s base rate.
They are often a certain percentage above it, so they do not follow the same interest rate changes as fixed mortgages.
Monthly repayments can go up or down with a tracker mortgage.
Why Should I Get A First Time Buyer Mortgage With Deedle?
At Deedle, we understand how nerve wracking it can be buying your first property and so we are here to assist you with unlimited support. Our dedicated team of mortgage advisors will be with you every step of the way, from initial consultation to mortgage completion. We handle all the paperwork, liaise with lenders and ensure a smooth process, saving you time, stress and effort.
Whether you have poor credit, are self employed or even in retirement age, our team of experts are here to help you find the mortgage that you need. With many years of experience in the mortgage industry, we search through 1,000s of mortgage deals to find the right one for our customers’ circumstances and needs.
Where Can I Get A First Time Buyer Mortgage?
With Deedle, you can get a first time buyer mortgage from anywhere in the UK. Locations include but are not limited to:
What Should I Consider Before Applying For A First Time Buyer Mortgage?
Before getting a mortgage, you should make sure it is right for you. It should involve monthly payments you can afford, an interest rate you are comfortable with and clear terms so that you know if there are any additional fees and what the remaining balance to pay is.
It is also important to think about how you are going to pay off the loan at the end of your mortgage term. Option include selling the property, paying with investments, an endowment or taking out another mortgage.
What Is The First Time Buyer Mortgage Criteria?
There are a number of different first time buyer mortgage requirements and criteria that the lender will take into account. This includes:
- Your age
- Your income
- Your employment status
- Your employment history
- Your credit rating
- Any debts you might have
- The deposit amount
- The size of the loan
- Your monthly outgoings
What Documents Are Needed To Apply For A First Time Buyer Mortgage?
The following documents are usually requested and assessed in order for you to get a first time buyer mortgage:
- Proof of ID e.g your passport or driving license
- Proof of postal address
- Proof of income (usually the most recent three months payslips)
- Proof of deposit
- Current or most recent P60
- Your SA302 tax return forms if you are self-employed
- Proof of any bonuses or commission if applicable
Frequently Asked Questions About First Time Buyer Mortgages
Both new or old properties can work for first time buyers. There are advantages and disadvantages for both options. Whilst older properties may have more character or space than new builds, brand new properties tend to be much more energy efficient, modern and part of the government’s first time buyer schemes.
A 5% deposit, also known as a 95% LTV, is usually the minimum amount lenders will accept. Interest rates become more favourable once you reach the 10% deposit mark, and many even opt for 15% to reduce monthly payments further.
You can also get a mortgage with no deposit but they are less common. 100% LTV mortgages intend to help renters get onto the property ladder, and to be eligible you have to be a first time buyer with a good credit score and 12 months history of making rental payments on time.
Borrowers typically get a mortgage loan lasting over 25 to 40 years. Whilst the advantage of a longer term mortgage is the smaller monthly payments, it will end up costing you more overall as the longer the mortgage term, the more you will pay back in interest.
A guarantor mortgage is when someone close to you, usually a family member, takes on the risk of your debt should you be unable to make any monthly repayments. The guarantor will not be named on the deeds of the property or have any right to any share of the property. To be a guarantor, you have to pass certain eligibility with clauses ranging from their age to existing equity in their own property.
Yes, it is possible to get a mortgage if you are a first time buyer with a bad credit score. The lender may just offer you higher interest rates due to the larger level of risk involved.
Having bad credit does not mean you cannot get a mortgage. At Deedle, we will endeavour to support you and help find you the best solution possible.
Yes, there are many incentive schemes for first time buyers from both developers and the government. In particular, the government runs the shared ownership scheme that allows first time buyers to purchase a share of a property and pay rent on the remaining share. There is also the First Homes Scheme that offers newly built homes to local first-time buyers and key workers at a 30% discount, and the 95% mortgage scheme to help buyers purchase properties with a smaller deposit.