Mortgages For First-Time Buyers

Finding the best mortgages for first-time buyers

A mortgage for first-time buyers is like any other mortgage, but, it is crucial to discuss budgeting. This will ensure that applicants are aware of the ongoing costs associated with owning a home, which includes utilities, taxes, insurance, and living expenses.

By examining income and expenses, advisers can help establish a realistic budget for the mortgage. Renters have some experience with these costs.

a man and a woman laying on the floor next to some moving boxes

First-time buyers often have many questions and worries about buying a property and getting a first-time mortgage. These concerns arise because of  unfamiliarity with the process. The main concern is usually about how to make the purchase possible.

Talk to our team to get answers and guidance, so you can move forward confidently.

First-time buyers should seek assistance from a mortgage broker when purchasing a house. They can help with finding the best mortgage deals for first-time buyers along with the most suitable lenders and rates. A broker can also assist in finding you a new deal when the mortgage rate finishes.

Mortgage brokers can offer exclusive interest rates and terms in addition to what mainstream lenders provide.

These rates and terms may not be available elsewhere due to exclusive deals provided to intermediaries by lenders.

Typically, when purchasing a property, you need to provide a minimum deposit of 5%. Sometimes, if the property is cheaper, you can pay a smaller deposit however, the minimum deposit amount will always stay at 5% of the total mortgage amount.

The size of the deposit will affect interest rates and mortgage options. Deposits can come from personal savings, investments, or gifted deposits. The amount borrowed must still fit within the lender’s affordability calculations.

When applying for a mortgage, it is important to establish an affordable monthly budget. Lenders no longer calculate lending based on a multiple of income, as individual circumstances vary. Lenders use affordability calculators to determine how much borrowers can borrow based on their income and known commitments.

A detailed breakdown by specialists will determine the maximum mortgage amount available. However, this amount may be more than you are comfortable with, so establishing a monthly budget is crucial. The deposit amount may also affect the borrowing limit.

Buying your first home is exciting but it can also be uncertain and stressful. With an overwhelming amount of information, it can be difficult to know where to start. Many people have the requirement to secure a home loan, which brings with it various uncertainties, such as:

  • What is the maximum amount I can borrow?
  • What will be the total expenses?
  • How will my monthly payments be impacted if the interest rates increase or decrease in the future?
  • How does the duration of the loan affect my monthly payments?

Other questions you may look to find answers for:

  • How much Stamp Duty will I have to pay?
  • What are the other costs involved and what is their total amount?
  • I have a history of bad credit, what chance do I have of getting a mortgage?
  • What interest rates are available?

Use our mortgage affordability calculator to find tailored answers for your affordability. If you are unable to locate the solutions, reach out to us for help.

Try our mortgage affordability calculator

When buying a house, first-time buyers often question the amount of money they can borrow. In the past, lenders determined the amount based on an income multiple, but now they also consider other factors.

In addition to income, lenders now take into account several other factors when making decisions. These include:

  • The length of time the loan can be repaid based on the applicant’s age.
  • The amount of deposit or equity available.
  • The number of dependants.
  • Any outstanding credit commitments.
  • Childcare expenses.
  • Pension contributions and other deductions from salary.
  • Council tax.
  • Travel costs.
  • Any ground rent or maintenance payments for leasehold properties.

Calculating what you can borrow for a mortgage is now more complex than before. Lenders have different rules and calculations, but most distinguish between first-time buyers and home movers. Lenders rarely exceed borrowing more than 5 times your income.

Lenders have online calculators, but they may not be accurate. Speak to a lender or mortgage broker first to make sure the calculations are correct before getting a mortgage.

First-time buyers need to pay a deposit, stamp duty, legal fees, Land Registry fees, and potentially other fees. They may also need to pay for a survey/mortgage valuation and a mortgage adviser. Additional fees may also be required depending on the mortgage.

When applying for a mortgage, lenders will assess your finances, including income, expenses and commitments. They will also check your credit history and address history. When applying for a mortgage you must show proof of income, bank statements, ID, address and deposit.

Lenders review your credit and finances to determine if you are eligible for a mortgage. This applies to both first-time homebuyers and those who already own a home. Getting a mortgage with bad credit as a first-time buyer isn’t impossible. It can be useful to present your situation positively and get advice from a mortgage adviser.

Checking your credit reports is also a great place to start if you’re worried about your credit rating.

First-time buyers can access the same mortgage rates as everyone else. Some lenders have special rates with extra benefits like free valuations, cash back, and help with fees. Speak to one of our experienced advisers to see what first-time buyer mortgage rates may be available to you.

A mortgage with a Guarantor is an option for borrowers with a low income who expect it to increase. A third party agrees to cover monthly repayments if the borrower fails to do so. The Guarantor does not own the property but signs a legal document confirming their responsibility.

Bear in mind that the mortgage lender may require the Guarantor to provide additional security. This could be:

  • A Legal Charge for a savings account that pays interest in a single sum. This could be for the same amount of extra funds that are allowed to be borrowed. However, the borrower can only use it if their income is enough to cover the mortgage.
  • A Legal Charge placed on the Guarantor’s residential property as collateral. If they fail to pay back what they owe, the lender could take away their property to pay off the debt. The lender will check if the Guarantor has a house, good credit, and can pay the monthly instalments. Independent legal advice is crucial.

Buying a home is exciting but it can also be stressful and unfamiliar. An aspect that applies to almost all people purchasing a home for the first time is the mortgage.

When buying a house, many people seek help and advice. They want assistance in choosing from the numerous options available and understanding the complex terms involved.

You can find advice from a variety of sources, including:

  • Relatives and close friends – An invaluable resource for first-hand and truthful insights into owning a home. Their understanding of the mortgage sector determines the reliability of the information they provide.
  • The internet – An immense volume of knowledge accessible around the clock. Lots of information can make it hard to know where to start and find what you need.
  • Lenders – Expert guidance customised to your specific requirements. However, there may be certain constraints to this viewpoint. They can only suggest what they can provide or do for you.
  • Mortgage advisers – Comprehensive guidance specifically tailored to your unique requirements. Our mortgage specialists will make every effort to locate the ideal mortgage for individuals purchasing their first property, considering their individual circumstances.

A broker with many lenders has more choices than one with only one bank. Additionally, there might be a fee that needs to be paid.

At IMC Mortgage Brokers, we have access to what is known as the ‘Whole of Market’ for mortgage products. This means we are not limited to the lenders we can use to help you. If a lender is available on the market, then IMC Mortgage Brokers is likely to have access to them. Our mortgage advisers will try their best to find the right mortgage for first-time buyers based on your situation. Contact us to discover how our assistance can benefit you.

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