A first-time buyer mortgage is a type of mortgage specifically designed for individuals who are purchasing their first home. These mortgages often come with features and benefits aimed at making homeownership more accessible for those who have never owned property before. Here’s a detailed explanation:

• Purpose: This mortgage helps individuals who are buying a home for the first time by providing the necessary funds to purchase the property.
• Features: First-time buyer mortgages may offer more favorable terms compared to standard mortgages, such as lower deposit requirements or special government-backed schemes.

There are many benefits and mortgage deals for first time buyers:

• • Lower deposit requirements: Many first time buyer schemes help first-time home buyers by reducing the deposit requirement. Today, you can get up on the property ladder with as little as a 5% deposit.
  • Access to First Time Buyer government schemes: there are several government-assisted programs designed to help you buy your first home:
    • Shared ownership: You get a mortgage first time buyer loan for only a percentage of the property and rent the rest. You have the right to increase the share of your ownership at any time.
    • First Home: This is a new program where buyers can purchase their home at a discount (for example, 20%) while retaining 100% of ownership.
  • Favourable rates: You may get an introductory offer from lenders as a first time buyer.

To be a first time buyer, all parties looking to buy the property must never have owned (either through purchase or inheritance) a residential property before.

From there, lenders will consider these factors to determine if they will lend to you and how much:

• Income: Lenders will assess your income to ensure you can afford the mortgage payments.
• Credit score: You’ll want to have a great credit score, which shows you have a good history with repayments.
• Deposit: You’ll typically need a deposit, which is a percentage of the property’s purchase price. For first-time buyers, this can be lower than the standard requirement.
• Affordability: Each lender conducts their own affordability assessment to determine how much they’ll lend you.
• Property value: Lenders will run their own property valuation. If you put in an offer significantly over its value, you may not be able to get a mortgage to cover the cost, so be aware.

We’ve created a full how to get a mortgage first-time buyer guide for you. For now, know that you’ll need to go through these steps as a mortgage loan first time buyer:

• Pre-Approval: It’s a good idea to get pre-approved for a mortgage before you start house hunting. This gives you an idea of how much you can borrow and makes you a more serious buyer.
• Find a Property: Look for properties within your budget and meet your needs.
• Apply for the Mortgage: Once you’ve chosen a property, you’ll submit a mortgage application, including information about your income, expenses, and the property.
• Valuation and Surveys: The lender will conduct a valuation of the property to ensure it’s worth the amount you’re borrowing. You might also choose to get a home survey for additional assurance.
• Mortgage Offer: If approved, you’ll receive a formal mortgage offer outlining the terms and conditions.
• Completion: After all legal and financial arrangements are in place, the mortgage funds are transferred, and you complete the purchase of your new home.

There are several costs associated with buying your first home. Some are the mortgage rates for first time buyers have access to, and others are tax-related. In total, you can expect to pay these costs:

• Deposit: An upfront payment towards the property’s purchase price.
• Arrangement Fees: Some mortgages come with fees for setting up the loan.
• Valuation Fees: The cost of valuing the property, often paid to the lender or a third-party surveyor.
• Legal Fees: Costs for a solicitor or conveyancer to handle the legal aspects of buying the property.
• Stamp Duty: A tax on property purchases, which varies by country and property price.

Rest assured, as an independent first time buyer mortgage advisor, we’ll connect you with lenders offering the most suitable first time buyer mortgage rates.

• Easier Entry: Lower deposits and government schemes can make it easier to get onto the property ladder.
• Lower Costs: Reduced fees and competitive interest rates can make buying a first home more affordable.
• Support: Various government programs offer additional support and incentives for first-time buyers.

In summary, a first-time buyer mortgage is designed to help new homebuyers enter the property market with features that accommodate their specific needs. It often includes lower deposit requirements and potential benefits from government schemes. Understanding the application process, associated costs, and eligibility criteria can help first-time buyers make informed decisions and find a mortgage that suits their financial situation.

We’ll provide expert advice and guidance throughout every stage of the mortgage application process to make your first time buying a property a breeze. We’re here to answer any question. Not sure where to begin? Have a look at our top questions for first time home buyer to ask mortgage broker.