First Time Buyer Mortgages

  • Specialist Mortgage Advisers
  • Thousands of Mortgage Products Available
  • See if we can help you find the right deal.

Get in touch for a, no-obligation chat with an adviser about how we might be able to help. 

Your home may be repossessed if you do not keep up repayments on your mortgage

Table of Contents

Get advice

1 Step 1
The internet is not a secure medium, and the privacy of your data cannot be guaranteed.

First Time Buyers

How is the mortgage process different for First Time Buyers?

There is no main difference really, although there are some specialist products for First Time Buyers that may have additional benefits.

The type of conversation you have with a broker will be different for First Time Buyers too. You will often have more questions to ask because you’ve not been through the process before.

That’s where there’s a benefit in coming to a broker. If you go directly to a lender they’ll often give you a very quick five or ten minute conversation, where you probably come away with a lot of unanswered questions. A mortgage broker will have the time and insight to go into more depth for you. So really, the difference is down to the client’s level of knowledge rather than within the mortgage process as such.

What is an agreement in principle?

That’s where we go to a lender to get an idea of how much you could borrow. The lender will do an initial credit check, look at your level of income and your current situation and confirm what the borrowing potential will be.

The thing to stress is that it’s potential. It’s not an absolutely certain number. Changes can occur between a client getting an agreement in principle and then being ready to apply. So it’s important to understand that it’s just a guide.

How much can I borrow and what deposit is needed?

It really depends on your income and existing outgoings. Lenders will have a maximum income multiple above which they will not go. The amount you can borrow will be determined by your circumstances, including your age, how long you have until retirement, whether you have any dependents and your monthly outgoings.

When we look at getting your agreement in principle, it’s important to be sure that the information we provide is correct, to give you as accurate a figure as possible.

Some lenders have enhanced calculations for First Time Buyers, which means you will be able to borrow as much as a home mover or someone remortgaging. There are also different schemes to help First Time Buyers with affordability.

The minimum deposit needed is 5% and in fact your borrowing potential can be determined to some extent by your deposit. Some lenders will offer more lending if there is more deposit. That’s down to the risk levels for the lender. If it’s less of a risk because there’s a higher deposit, that can benefit your borrowing potential.

How do I know what my credit score is and how do I improve it?

One of the things we do that’s quite unique is that we ask for a reasonable amount of information from the outset. Part of the information we ask for is your credit report.

That gives us a really good understanding of your previous borrowing and your commitments. Your credit file does have a credit score, but lenders do their individual scores as well, that aren’t just down to your credit rating. They might also look at how long you’ve been at your current address, whether you’re registered on the electoral roll and how long you’ve been in employment. They might also look at your job type and your age.

So it’s a bit of a myth that there is a universal credit score. Each lender has their own algorithms and their own priorities as to the type of client they want to lend to.

To improve your credit score, it’s important to make sure that all your utilities and contracts have your latest address, so there’s no ambiguity about where you’re registered to vote or where you’re living.

Make sure you don’t have any late payments or missed payments. People often miss payments because they’re a bit disorganised or they’ve forgotten to set up a direct debit. Even the odd missed payment here and there can affect the availability of mortgages for you.

So try and keep things as tidy as you can. If you’ve got an overdraft, try not to use it – or at least make sure you keep within the limit. It doesn’t matter if you’re not paying your credit card balance off every month, but do make sure you’re covering the minimum payment.

What is a First Time Buyers ISA?

This has a few different names but is essentially the same thing. There used to be the Help to Buy ISA where you could save up to £200 a month and get up to 25% of the amount you’ve put into it added as a bonus by the government each year. If you already have one of those you can continue to pay into that until November 2029.

Although they are no longer available for new savers, there is a very similar product called a Lifetime ISA. If you’re using a Lifetime ISA towards the purchase of a property you can still get up to 25% added per year by the government, depending on how much you’ve put in.

Full details of that are on the government website. The basic point of these ISAs is to encourage people to save regularly, but It’s effectively free money from the government which is a rare thing. So if you’re able to avail yourself of that, it’s definitely worthwhile.

Speak To an Expert​

Whether it’s your first time, moving home or just looking for a better rate we would love to hear from you.

What other help or schemes are available for First Time Buyers?

The Help to Buy Equity Loan scheme is now closed (as of October 2022), but there are other great schemes still available, such as Shared Ownership where you’re part renting, part purchasing the property. That can be very helpful if you have a lower deposit – it can help you get the property that you’re after.

Another helpful option is the Bank of Mum and Dad – where you can get a gifted deposit. We’re seeing a lot of this at the moment: parents are helping out.

You could also look at a Joint Borrower Sole Proprietor mortgage. It has a complicated name, but what it basically means is if you want to buy a house but you don’t quite earn enough for a mortgage, mum or dad or another family member can come onto the mortgage with you.

They contribute their income as part of the affordability assessment to help you get your first home. Joint Borrower Sole Proprietor literally means that there are two people on the mortgage and one person owning the property.

The extra person on the mortgage may not necessarily want to be an owner of the property. If they have their own home already, buying a second property means they will have to pay stamp duty. So they don’t want to be named as an owner.

An important consideration with this is that the parent coming onto the mortgage may have their own mortgage as well – their own commitments could impact the affordability calculation. Their age could also matter if they’re close to retirement. But in general it’s
a very useful way of helping people get their first home.

What fees are involved when buying a house?

First Time Buyers benefit from zero stamp duty up to £425,000 (as it stands at the time of recording this episode). The rate is reduced for a purchase of up to £625,000 and you don’t pay for the initial £425,000.

With regards to mortgage fees, there can be arrangement fees with the lender which is determined by the type of product you take out as well as by provider. These can vary quite considerably.

Then you need to pay for legal searches, where you instruct a solicitor to look at local drainage and environmental records. There’s an initial upfront cost and then overall legal costs.

You also have surveys and there are different types of these. I always explain this to First Time Buyers as being like having a friendly mechanic take a look at a car you’re planning to buy. Or, you could spend a bit more and have the AA or the RAC look at it. But if you’re buying a Ferrari you’d probably want to get a specialist involved.

That’s exactly the same as a property survey. There are different levels – the basic Homebuyers survey is the traditional one, then there’s a full structural survey that looks in depth at the condition of the property.

Finally you need to think about mortgage protection to make sure you can keep the property and stay in it. It’s things like life insurance, critical illness cover and income protection. But we will go through all that and give you advice based on your specific situation and requirements.

How can a mortgage broker help First Time Buyers?

Having worked as a mortgage advisor for a specific lender, I can say that a mortgage broker makes a big difference. It’s not just the fact that you’re looking at the whole market for mortgages and getting a far wider choice of options.

It’s that brokers can spend time with the client and hold their hand – we really understand your needs and give reassurance particularly for First Time Buyers, particularly these days with the cost of living going up and interest rates changing so much.

We’re available for all your queries – and there’s no such thing as a stupid question. There’ll always be things that need answering and we’re here to help with that. We can also help you in speaking to solicitors and estate agents and being that go-between if you like.

We don’t want you to have a phone call from somebody else involved in the process and not know what to do. Ideally you’ll be aware of any issues from us already and that they are being taken care of.

We’re here to hold your hand no matter how much or how little you want us to. It’s not just about the mortgage. It’s about the solicitors, the insurances and even will writing. It’s just making sure everything’s in place. Buying a home is a big commitment and having someone there to help is really important. Once you’ve had your offer accepted it can seem that you have no control. We’re that little bit in between to help you make sense of it all.

Your home may be repossessed if you do not keep up with your mortgage repayments.

Right to Buy and Shared Ownership Schemes are English schemes only. Rules may differ in Northern Ireland and Right to Buy is no longer available in Scotland and Wales.