First Time Buyer
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Taking on a Mortgage is one of the biggest decisions of your life, especially as a First Time Buyer. It will also be the biggest debt of your life, so if using a Broker, it’s important you pick somebody you can Trust, who has the Knowledge and the Experience.
We can only hope that our 35 plus years in the industry is enough experience.
Have a look at some of our recommendations to see if we can be your trusted Mortgage Broker.
Why use a Mortgage Broker as a First Time Buyer?
Firstly, you don’t have to use a Mortgage Broker. If you have the time and the knowledge you could do your Mortgage DIY. However, the main reasons people choose to use brokers are the service and value we provide.
With 70+ Lenders and 1000’s of products out there, all having very different criteria when assessing you for a mortgage, it is important that you only apply with a lender that will accept your application.
Many times we’ve had people come to us confused as they’ve been refused a Mortgage by their own Bank. Even having a Good Credit score!
Case Study
Scenario
We were approached by a couple who were looking for a Mortgage.
- New Purchase £575k
- Mortgage required £400k
Both Self-Employed with strong accounts and good Credit Scores. However, they had recently been refused a Mortgage from their Building Society. With whom they had held a Bank Account for 10 + years.
Problem
After analysing of all the documents, we noticed that whilst their Credit Score was good, one of the applicants had 4 Historic late payments on a credit card. The client was confused as he stated, ‘ he always sends them a Cheque on time for the end of the Month’.
Now whilst he was sending the cheques for arrival on the due date, it was taking the Credit Card company 3- 4 days to cash the cheque and allocate to the account. So these payments whilst made, were classed as ‘Late Payments’ .This was the reason for his bank refusing the Mortgage.
Solution
Armed with this knowledge, we were able to source a Lender that would accept the late Credit Card payments.
We submitted the application and soon followed a Mortgage offer for £400k. Customers went for a 2 year fixed rate, meaning in 24 months they will be able to Remortgage to a better rate.
So, a competent Mortgage Broker will make sure when you fill in the application form you get a mortgage, not refused because you do not fit the Lenders Criteria. This will save you weeks of work and heartache if things go wrong.
Case study is a fictional representation of some scenarios that we have dealt with previously. Eligibility will be assessed on specific individual, personal circumstances
What we offer to First Time Buyers
Knowledge and Insight
We live and breathe Mortgages. Doing them every day, and armed with the latest software makes us very good at our job, you could say experts.
We will give you options that you didn’t know you had. For example, many people believe that once your initial term has expired on a fixed rate, your only options are to:
- stay on the lenders variable rate
- move to another Lender
However, most Lenders have a Product Transfer option, whereby they allow you to move your mortgage to another product. This will not only save time but also additional fees, i.e. valuation & legal.
Another example is, when buying a home some applicants can be stretched in terms of cash and need to Qualify for a Maximum Mortgage on their Salaries. As Experienced Mortgage brokers we know which lender to go to for the maximum and which to avoid.
What is a First Time Buyer Mortgage?
A First Time Buyer Mortgage is exactly what is says on the tin. A mortgage for a person who as not had a mortgage before.
There are many Lenders that specialise in this market and with their understanding and expertise, they will be the Lender of choice for our First time Buyers.
However, some of these Lenders are not necessarily mainstream and a majority of First Time Buyers would not have heard of them.
Expert Tip – If you are buying as a couple and one of you have recently had a mortgage, some lenders will class you as a Second time buyer’s
How much deposit do you need as a First Time Buyer?
The amount of deposit varies from Lender to Lender.
It’s important to remember this Golden rule – the more deposit you have the lower the interest rate which means the Lower your monthly payments.
The lowest deposit you can get a mortgage for now is 5%, so you will be getting a 95 % mortgage. An ideal deposit is 15 %, so you get a 85 % mortgage and the rates will be very competitive.
Source of Deposit
There are a variety of source of deposit that are acceptable to a lender:
- Personal Savings
- Cashing in LISA (lifetime ISA)
- Cashing in other investments i.e. shares etc
- Gift from Parents, Family or Friends
- Inheritance
What ever the source of the deposit you will need to show proof of the amounts by providing copies of the relevant statements.
First Time Buyer Stamp Duty
Stamp duty (aka SDLT) is a form of tax on the purchase of a property and is paid by the purchaser.
The amount of Stamp Duty you pay will depend on the value of the property you are buying. Due to the constant changes to the property value thresholds and tax-free allowances we thought it is best to provide a Link to the govt website with the latest bands.
It’s a First Time Buyers responsibility to make sure that if any Stamp Duty is to be paid it has been budgeted for.
Please be aware that by clicking onto the above link you are leaving the Berks & Bucks Finance website. Please note that neither Berks & Bucks Finance nor (the Network) are responsible for the accuracy of the information contained within the linked site accessible from this page.
First Time Buyer Mortgage - Parent Help
This is a mortgage where you have help from your parents towards the deposit. So your parents are gifting you some money to help you get on the housing Ladder.
This type of gift is known as ‘Gifted Deposit’ and is regularly accepted by all lenders. Your parents will need to sign a Gifted Deposit Letter stating that the fact of the gift. We will be able to help you with this.
First Time Buyer Self-Employed Mortgage
Applying for a First Time Buyer Mortgage as Self-Employed is the same as applying for a mortgage being Employed. The rules are the same:
“You need to prove your income”
So yes, we can help Self-Employed get a First Time Buyer Mortgage.
First Time Buyer Mortgage Bad Credit History
We do understand that not everybody has a perfect credit history and unfortunately sometimes a life events happen that can mess up your credit history.
So whether you have had a historic CCJ or Defaults, we have lenders that will consider mortgages for First Time Buyers with bad credit. However, the deposit needed could be 10% and the rates will be higher.
Bad Credit Mortgages
Why Us
- Raising The standards of financial advice
- Making financial advice accessible to all
- Trusted & stress-free financial advice
- Friendly, personable advisors
our Mortgage Butler service
Help you to collate all of the documents you will need to apply for a mortgage
Complete and submit your application
Handle all the enquiries by the Mortgage Lender
Liaise with your Estate Agent
Help you to nominate a good & competitive solicitors
Work with all the parties to get you to Mortgage completion
Keep in touch with you on a yearly basis and help with your future needs
