We understand that getting that first foot on the ladder can be hardso we have all the help you'll need to get that lift up.
Being a first-time home buyer can feel hard enough on its own, but, when you also have to learn about mortgages, it can seem even more difficult.
However, you may not necessarily be a first time buyer and you don't even realise.
Typically, you’re considered a first-time buyer if:
•You’ve never owned a residential property either in the UK or abroad,
•or You only own – or have only owned – a commercial property with no living space attached to it (for example, a pub with upstairs accommodation).
You’re probably not a first-time buyer if:
•You’re buying a property with someone who owns, or has previously owned, a home
•You’ve inherited a home, even if you never lived there and it’s since been sold
•You’re having a property bought for you by someone who already owns their own home, such as a parent or guardian.
When getting a first-time mortgage, you should start by finding out how much you’re able to use as a deposit, and how much you can borrow. When you apply for a mortgage, it will typically involve a review of your salary, as well as any other income or outgoings.
It may also include an affordability and eligibility review, which looks at your spending habits, so that your lender can be sure you’re responsible with money and can handle borrowing such a large sum.
Once you’ve found out how much you’re able to borrow, you’ll have an idea of the type of first home you can afford.
Every month you then pay this interest to the lender for the duration of the loan. The lender calculates your monthly repayments depending upon how the rate you have chosen is set. At the end of the loan period, the lender will expect the initial capital they lend you repaid in full by whatever means you have arranged.
Generally, a first-time buyer is expected to put down a deposit of at least 10% of a property’s purchase price. Lenders require a deposit to secure the loan, as well as offer reassurance that you’re reliably able to afford the financial commitment. It’s possible to have only a 5% deposit and still secure a 95% mortgage, but there are risks in having to borrow such a large mortgage.
The larger the deposit you can manage then the more equity you will hold in your new home, the better rates that will become available along with lower monthly payments.