A Guide For First Time Buyers
What is the definition of a first-time buyer?
A first-time buyer is someone who has never owned a home before. People can be first-time buyers if they have either never owned one in the UK or elsewhere before.
The property you are buying needs to be where you live or your main residence.
Some Lenders differ in their definition of what is a first-time buyer.
For Nationwide a first-time buyer is one who has never had a mortgage during the last three years both in the UK or elsewhere.
For Kensington, a First-time buyer is one who has never had a mortgage or a property with no loans on it over the past 12 months.
Others include: An individual who has not owned a principal residence for 6 months all the way to 3 years. Or even If you’ve owned a home but your spouse has not, then you can purchase a place together as first-time homebuyers. A single parent who has only owned a home with a former spouse while married, definitions vary from lender to lender.
There are some great mortgage offers available for first-time buyers, with rates moving fast don’t delay to speak with one of our advisors. You may also be able to choose from a greater selection of mortgages.
Everyone’s circumstances are different. However, some general tips can help make buying your first home a little easier.
- Start saving early. The sooner you start saving for a down payment, the easier it will be to come up with the money when it comes time to buy.
- Get pre-approved for a mortgage by obtaining a Mortgage in Principle. It will give you an idea of how much you can afford to spend on a home and help you when it comes time to make an offer. Morfinity will be able to help you get a mortgage in principle within a day from the most relevant lender.
- Work with an estate agent. A good agent will be able to help you find the right home and help negotiate the best price.
- Have realistic expectations. Don’t expect to find your dream home right away – it may take some time and patience to find the perfect abode for you.
Buying a home is a big decision, but it doesn’t have to be overwhelming. By following these tips and doing your research, you can make buying your first home a smooth and enjoyable one.
If you’re a house buyer in the UK, you may need to pay stamp duty on any property you purchase. The amount of SDLT that you will pay depends on a number of factors such as whether you are a first time buyer, whether it’s a second property and also the value of the purchase. And it’s important to be aware of this cost before you commit to buying a property.
The current stamp duty rates in the UK are:
The current stamp duty rates in the UK are:
- 0% on properties worth up to £125,000
- 2% on properties worth between £125,001 and £250,000
- 5% on properties worth between £250,001 and £925,000
- 10% on properties worth between £925,001 and £1.5 million
- 12% on properties more than £1.5 million
If you’re a first-time buyer looking for a mortgage, there are several things you need to know to get the best deal possible. Here are a few tips on how to get a first-time buyer mortgage:
- Speak to a Morfinity Mortgage Advisor It’s important to speak to a Morfinity advisor who will use the latest sourcing software and compare rates from the whole of market lenders before recommending you with the best priced and most suitable mortgage deal.
- Know your credit profile – Your credit profile will impact the interest rate you’re offered and more importantly allow your Morfinity advisor to assess which lender to approach for your mortgage. Be sure to check to speak with your advisor who can guide you how to check your score before applying for a mortgage to know where you stand.
- Save for a down payment – The more money you can put down on your home, the lower your monthly payments. Start saving early so you can reach your down payment goal.
You’ll need to consider a few things, do you have a steady income? What is your credit score or profile? How much debt do you currently have? Lenders will look at all of these factors amongst others when considering whether or not to give you a mortgage.
As a general rule of thumb if you have a good credit score profile, securing a mortgage is comparatively easier than those with poor credit and history of late payments.
There are a few key things you can do to increase your chances of having your mortgage application accepted. Firstly, ensure that you have all of the required documentation in order, and it includes your ID, proof of income (i.e. pay slips), and other financial documents.
If you follow these tips, you’ll increase your chances of having your mortgage application accepted.
As a first-time buyer, you may be feeling overwhelmed by the home buying process. Not to worry! Morfinity’s mortgage calculator will help you figure out how much you can afford and your monthly payments.
Enter your deposit amount, mortgage term, anticipated interest rate, and purchase price below to calculate your monthly payment. Then, use the slider to see how different down payment amounts would affect your monthly payment.
Are you in the market for your very first home? If so, you’re probably wondering how much money you’ll need to come up with for a down payment. While there are many different types of mortgages available on the UK market, not all are ideal for first-time buyers.
But why take the hassle when you have Morfinity to help you out? The experts at Morfinity will help find the best mortgages deals with you while getting you in touch with some reliable lenders offering mortgage money at easy terms.
If you’re unsure which type of mortgage is right for you, compare Morfinity’s top first-time buyer mortgage rates to see what’s available. We make sure to compare and publish the best mortgage deals so you can find one that suits you the best and not to forget, is highly reliable.
A fixed-rate mortgage will mean your monthly payments should stay the same until an agreed date, no matter what happens to interest rates in the market. Fixed-rate periods come in various different lengths, for example, 2, 3 and 5 years.
Tracker mortgages follow the Bank of England’s Base Rate and rise or fall along with it. The interest rate charged is the Bank of England’s Base Rate plus an agreed margin. There are ‘lifetime’ trackers for the life of the mortgage, and term trackers which may be for 2 or 3 years.
Understanding your repayment options
When deciding on a mortgage, you also have payment choices to make. These options need to be considered carefully:
With a capital repayment mortgage, the monthly repayments include an element which repays the borrowed capital, as well as a payment for the monthly interest of the loan. With this repayment method, you can ensure your mortgage is fully paid off at the end of the mortgage period.
With an interest-only mortgage, your monthly payment only covers the interest charged on your loan for that month, so the amount you owe in capital doesn’t reduce over time.
You’ll need to demonstrate to the lender that you’ll have some way of paying off the debt in the future (such as an investment or a second property you could sell). Interest-only mortgages are commonly chosen when you’re buying to let.
A number of lenders now offer mortgages where family members especially parents can support First Time Buyers to get on the property ladder. One example is a Joint Borrower Sole Proprietor Mortgage (JBSP). A JBSP mortgage allows a family member to contribute to the mortgage without being a co-owner. A JBSP Mortgage is an increasingly popular way for First Time Buyer’s to get a foot on the property ladder
Another option now available from lenders including High street Banks is a Family Boost Mortgage where No borrower deposit required – instead, your family puts 10% of the agreed property purchase price into a 3 year fixed term savings account.
The property is owned by you and only those individuals named on the mortgage have the legal rights over the property no matter who helped. In a Family Boost mortgage your payments stay the same as you’ll likely be on a 3 year fixed interest rate mortgage rate, so you know exactly what is going out each month.
The family savings will earn a competitive rate of interest until the 3 year fixed term ends, your family member will get their savings back with interest, as long as you have kept your mortgage payments up to date.
For the best rates and most suitable Joint Borrower Sole Proprietor & Family Boost Mortgages, call Morfinity now and let our expert Mortgage Advisors help you secure that dream home.
There are a number of schemes set out by the UK Government that can be used to help you buy your home.
- The Help to Buy equity loan
Through the Help to Buy Equity Loan, the applicant(s) need only a minimum of a 5% deposit of the value of the purchase price. Although you’ll have full ownership the Government will have an equity share of up to 20% (up to 40% in London) until you repay the equity loan. The main aim of the Help to Buy Scheme is that it enable you to purchase a new build property with a small deposit. Overall when using this scheme you must contribute 80% of the price, for example, with a minimum 5% deposit and up to 75% mortgage. In London, homebuyers must contribute at least 60% of the price
What are other types of government schemes?
The other schemes include:
- Help to Buy: ISA Scheme – The Help to Buy: ISA is closed for new applications.
- Shared ownership – If you can’t get a mortgage to buy a property outright, a shared ownership scheme could enable you to buy a 25-75% share in partnership with a social landlord like a housing association. You would then pay ‘rent’ on the share that you do not own to the landlord.
- Right to Buy Scheme – Assists people who are renting their home from a Local Authority (or the Local Authority’s nominated housing provider e.g. Housing Association) to buy the property at a discounted price. The discount generally depends on the length of tenancy with the Council or housing association, in some cases buyers may not need a personal deposit and the lender can fund the full purchase amount post discount.
- Forces Help to Buy – The UK Government Ministry of Defense “Forces Help to Buy scheme”, allows UK armed forced personnel to borrow up to £25,000 interest free (repaid over 10 years) to use as a deposit when buying a property to be