Mortgage brokers for first-time buyers

This is totally up to you but due to the complexities involved in getting a suitable mortgage, It is usually better to get a first-time buyer mortgage broker to assist you as the whole process will likely be new to you and may seem overwhelming. You are also seeking out a huge financial commitment and it is always better to place the liability on the mortgage broker rather than yourself.

Your mortgage situation could further be complicated and difficult if you are:

Self employed
A director
Have bad credit
Live overseas temporarily
Recently moved to the UK
Don’t have sufficient mortgage deposit

The home buying process is pretty straightforward and your first-time buyer mortgage broker will be able to assist you throughout this process.

The home buying process goes like this:

Get a mortgage in principle: this lets you know what you can afford and what you will have to pay for your mortgage.

Find a property: You should find a property within your budget and submit an offer to buy the property.

Instruct a home valuation: It is important you instruct a home valuation because if the house is valued way lower than the advertised price it is likely the mortgage lender will only offer you a mortgage for the properties value. This may mean you will have to put a bigger mortgage deposit down to cover the deficit. There are different types of home valuation reports. Ensure you choose the one which fits your needs. Some valuations will come with a full home survey, some won’t.

Apply for your mortgage: Your first-time buyer mortgage broker will then apply to the mortgage lender for a formal offer. Your mortgage lender will ask to see the valuation documents and if everything is fine they could produce an offer within hours but at the most within 10 to 4 days.

Instruct a conveyancer: Your conveyancer will do the legal work on your home to ensure that the home you are buying is fit for purpose and that there aren’t any legal problems with it. Your solicitor will conduct various searches including local authority searches to ensure they aren’t going to build a motorway through the back garden anytime soon!), mining area searches, chancel searches to see if the house is part of a parish area. Conveyancers could cost anywhere between £200 to £3,000 depending on the property value.

Once everything is drawn up and ready you will then be able to exchange contracts. The two conveyancers involved will set a date for completion which is when you will receive the keys and be able to move into your new home.

For those of you who chose to buy new build houses offered through the government scheme or any other property developer you may come across the term “Off plan”. This simply means that the property you want to buy hasn’t been built yet.
Buying off plan means you will confirm everything aside from exchanging on the property. This means you’re not obliged to complete or move into the property but you may lose some of the money you may have already spent on conveyancers, mortgage fees, home valuations( which you may be required to do if the mortgage lender has to extend their offer past their usual terms)
New build properties may take 12 months or longer to complete and your mortgage lender will usually give you a mortgage offer that is valid for 6 months after which you and the property may have to be reassessed at a cost to you.
Some mortgage lenders offer specific off plan mortgages which allow you to continuously extend your mortgage offer as long as your personal circumstances haven’t changed.

In some cases a new build property which was bought off plan will increase in value before the original buyer completes on the purchase.
If this occurs some buyers will look to make a quick profit and offer the property at a price above what they were originally going to complete on it but at a discount to is current market value. This means that anyone who wants to buy this property could potentially buy it at a discount to what they would otherwise pay forit. A good deal for the seller and the buyer.
Buying a house on contract assignment does have some challenges as you may not be able to get a straightforward mortgage with it.
You should consult your first-time buyer mortgage broker for advice on this and seek legal advice if you see fit.

The best mortgage for a first-time buyer is not necessarily with any particular mortgage lender but rather it all comes down to how much you can put down as a deposit and what your total cost will be. If for example you get a first-time buyer government scheme for 15% of your property price and hae a 5% mortgage deposit the mortgage lender may then give you a mortgage with a loan to value(LTV) of 80%. This will may be a good mortgage but not necessarily the best. Your first-time buyer mortgage broker will be able to advise you on what the best mortgage available for you is.

Forna first-time buyer mortgage you will probably need a mortgage deposit of 5%. You could then get a government scheme for 15 or up to 40% if you are eligible for the governments help to buy scheme. With the average UK house prices a mortgage deposit of between £15,000 and £40,000 for 5% of the property price might be enough as a mortgage deposit. If you can’t afford to buy the home you could possibly use the shared ownership scheme if you are eligible.

For a first-time buyer to get a mortgage you will need to get a first-time buyer mortgage broker to see your eligibility for a mortgage you can then check your eligibility for first-time buyer government schemes to see if you could put a smaller mortgage deposit down or get any possible savings on the total cost of the property through schemes such as the help to buy equity loan scheme or the shared ownership scheme. Once you are done here your mortgage broker will give you a mortgage in principle which they they have obtained from the mortgage lender. At this point you can get a mortgage. Just seek advice from your mortgage broker and continue the process.

Yes, you can get 100% mortgages as a first-time buyer but you will usually be able to get these through specialist first-time buyer mortgage products such as the offset mortgage: which is where your family members or a family member puts money in a savings account for the first few years of your mortgage rather than you paying a mortgage deposit. There are also guarantor mortgages where a family member puts down some collateral such as their house, cars or valuables down as a guarantee for your mortgage. If you fail to make your mortgage payments or default your guarantor could lose their possessions. Your guarantor should seek independent legal advice before taking out a guarantor mortgage.

The income needed to qualify for a mortgage will depend heaving on the total mortgage you want take out. Most mortgage lenders work out your mortgage affordability based on an income multiple of between 3 and 5 depending on the mortgage lender. Your income will also need to be sufficient to cover your monthly mortgage repayments.

The amount of mortgage you can afford will depend heavily on your monthly disposable income as well as your yearly income. Most mortgage lenders will like to see that your current committed expenses are not more than 30% of your current income.
Mortgage lenders will also like to see that your monthly mortgage repayments can fit within your disposable income and leave you room to breathe.

As mentioned above you will be able to buy a house with no money down but this will require you to have a good credit score and a good mortgage affordability.
In most cases you will need a guarantor to put down some money in a savings account or put some collateral down. The barclays family springboard mortgage and the lloyds help a hand mortgage are two mortgages which allow you to buy a property with no money down.

Damp
Japanese knotweed
Building work in the local area
Bin collection times
Distance to prisons
Distance to hospitals
Check that the electrical work
Check that the pumbling works
Check that the old owner has paid the final gas meter and water bills
Check that the previous electricity bills have been paid
Check that the home has a gas certificate
Crime rate for the area
House price trends in the area
The current furniture in the house
The council tax for the area
The cost for home insurance
Check that the roofing is fine

There isn’t much more to know outside of what we have covered in this blog. As long as you have an experienced mortgage broker for first-time buyers then you should be fine.
Lifetime ISA- gives you a government bonus of £1,000 if you save the maximum £4,000 a year.
Help to buy ISA- gives a maximum bonus us £3,000 if you save the maximum allowed of £12,000. Before you get either you should consider which is better. Lifetime ISA vs Help to buy ISA.
Help to buy equity loan- gives you up to 40% as a 5-year interest-free equity loan. You begin to pay interest at 1.75 % after the fifth year and 1% plus RPI for every year thereafter.
Shared ownership- You can buy between 25% to 75% of the property initially with a shared ownership mortgage and then buy more using a staircasing mortgage.
Armed forces help to buy- similar to the help to buy equity loan but specific for the armed forces personnel giving them an increased chance of acceptance.
Rent to buy- This is the right to buy scheme on which this guide is currently discussing. A different marketing name is just used. Watch out for this when shopping to avoid missing out on eligible properties due to confusion.
Right to buy- allows you to buy your home at a discount price.
Preserved right to buy– same as above.
Right to acquire- same as above.