Top 10 questions asked by first time buyers

  1. How do I get a mortgage?

As a first-time buyer it pays to shop around for the best deal. But when you’ve never had a mortgage, it can be confusing. To get an idea of what is available in the marketplace and see what deals work best for you, it’s worth contacting a specialist mortgage adviser who can look at your personal circumstances and guide you through the process.

  1. What types of mortgages are available?

There are four main types of mortgages available, but exact products offered to first time buyers will depend upon the individual lender.

  • repayment mortgage – you own your home at the end of the term
  • interest-only mortgage – the repayments will be lower, but at the end of term you will not own your home unless you pay off the amount initially borrowed,
  • fixed rate mortgage – your payments stay the same every month
  • tracker rate mortgage – your payments may go up or down

Bear in mind that there is usually a charge for securing a mortgage deal. Known as a mortgage arrangement fee this can add £1,000 to £2,000 to your costs but will depend on the mortgage deal you choose.

  1. How long does it take to get a mortgage offer?

An Agreement in Principle is usually issued within 24 hours by your lender/broker. This allows you to go ahead and look for your potential new home. Once you are ready to submit an offer on a property, and your financial circumstances have not changed, you can progress with your full mortgage application.

  1. How much of a deposit will I need?

Many mortgage lenders are asking for a minimum deposit of 10% of the purchase price, however there are some offering mortgage deals with a 5% deposit.  Generally, lenders will offer lower mortgage rates to those with a bigger deposit.

If you have no deposit saved, there are several government schemes designed to help first time buyers get on the property ladder. These include:

  • Lifetime ISA – first-time buyers can save up to £4,000 a year, with the government adding a 25% bonus
  • Help to Buy – offers buyers the chance to purchase a new-build home with just a 5% deposit
  • Right to Buy – allows tenants renting public housing to buy their homes at a discount
  • Shared Ownership/Co Ownership- buyers can purchase a share of a property and pay rent on the remaining share
  1. How much can I borrow?

Calculations for this will be based on how much you can afford to pay every month. The payments will depend on the value of the property you want to buy, the size of your deposit and period over which you want the mortgage to run. These calculations will consider your current income and outgoings to assess affordability and will also involve a check on your credit score. It is always worth seeking guidance from a financial adviser before submitting a formal mortgage application.

  1. What documents do I need to provide?

If you are progressing with a mortgage offer, your lender will ask for proof of name and address, full, valid, UK photocard driving licence, or utility bill, most recent bank statement, and evidence of your deposit.

  1. How long can I take to pay back my mortgage?

The average mortgage term is 25 years, but this can be extended to 30 or 35 years depending on the lender and your individual circumstances.

  1. How much stamp duty will I pay?

Luckily, first time buyers are exempt from stamp duty payments on properties below £300,000. For a house purchased between £300,001 and £500,000, stamp duty will be charged at 5%, and above £500,001, normal stamp duty rates will be applied.

  1. What is a house survey?

A house survey is an inspection that will check for any problems or defects in the house before you decide to go ahead with the purchase.  It is not a legal requirement but is highly recommended.

There are three types of survey offered and your choice will be based on the age and condition of the property you are considering, and the budget you have available – a condition report (basic), a homebuyer report (suitable for buildings under 50 years old) and a building survey (very detailed)

  1. Do I need a solicitor?

When buying a property, you should engage a solicitor who will undertake the “conveyancing” for the transaction. Buying property is a complex process. Your solicitor will manage all the legal and administrative elements of transferring the property to you including drawing up the contact, liaising with Land Registry, dealing with financial transactions, providing legal advice, and managing interactions between the seller and your lender.

Applying for a mortgage can be a daunting process but we can help. With access to over 50 of the UK’s best known lenders offering thousands of mortgages, we can offer some exclusive deals that you won’t find anywhere else. Our advisers spend time getting to know you and your specific circumstances so that we can provide you with the best guidance and advise.

Most importantly, we’ll support you throughout the purchase process. That way, you can be assured that someone will be there to guide you every step of the way.

Call us today on 028 9182 8255 or use or branch finder to find your nearest adviser


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