First Time Buyer Mortgages

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When it comes to getting your First Time Buyer Mortgage, there can be a lot of jargon to try and get your head wrapped around!

Which is why we always try and speak your language and take the time to make sure you understand everything.

Common First Time Buyer Mortgage Questions

We understand when you are planning to buy your first home, you’ll have lots of questions and not just mortgage questions!

Its an excitng time being a first time buyer and there are lots of things you’ll want to know.  So we hope these answers to common first time buyer mortgage questions help you out.

Do you have a question about first time buyer mortgages?
If you have a question about first time buyer mortgages that is not covered here, please contact us.
Can my parents give me money for a house deposit?
Your parents can certainly give you money for a house deposit.  Your borrowing capacity will still be dictated by your own income and outgoings, unless they too are on the mortgage as well. If they are on the mortgage too, then their income and outgoings will also be taken into account.

Mortgage companies view this type of help in two ways:

1. A gifted deposit.

2. A loan.

For a lender to accept a gifted deposit, it must be a ‘gift’. In other words, no strings attached and something that isn’t required to be paid back. Some lenders will want what is known as a gifted deposit letter. But don’t just write your own, lenders often want it worded in a specific way.

If its a loan from your parents, then this too is fine. A lender will treat this like any other loan and will want to know what the monthly payments will be. The lender wil then include this in your affordability assessment.

To get a clear idea of the maximum you can borrow for a first time buyer mortgage it might be a good idea to speak to one of our mortgage brokers who will be able to find the lender who can offer you the maximum amount. In addition it would be helpful to know exactly how much of a deposit your parents can help with? As the mortgage deposit together with your borrowing capacity will dictate what you can buy.

What are the costs of buying a house for a first time buyer?

Depending on your exact circumstances, here is a list of things that you will (or very likely) have to pay. Included is an approximate price range but it is a rough guide and like anything you sometimes get what you pay for:

• Solicitors fees (£350-£1,000 approx. depending on who you use and how good they are).

• Mortgage Broker Fees (£350-£1,000 approx. depending on who you use and how good they are).

• Searches (£30-£500 approx. different searches are undertaken so depending what these are will determine the cost).

• Stamp duty (visit HMRC to get an idea of cost as it depends on the purchase price).

• Valuation / Survey fee (£0 – £1,000 approx. The price is dependent on the type of survey you have. Sometimes lenders give you a basic survey for free).

• Mortgage Lender fee (£0-£2,000+ Every lender has a different pricing model and to find a lender who is the cheapest is really important).

• Removals (£500 – £1500+ Assuming you don’t do it yourself).

• Home insurance (Price dependant on many variables. This has to be in place for when you exchange contracts, NOT when you complete).

  • New furntiure and everyday living essentials (£$!! If you have been living at home, you might need to kit out an entire home).
Can I buy my first home without a deposit if its at a discount price from my family?
Lending rules do change, but broadly speaking this can be typicaly done when buying a property from an immediate family member. An immediate family member is usally cassified as a parent, sibling, grandparent, aunt, or uncle.

This scenario is technicaly called a concessionary purchase. The advantage of doing this, is that the depsoit is the discount. So the first time buyer does not need to find the physical deposit, instead they are utilising the amount of the discount. This is a huge benefit for first time buyers, who othersie would have to save or find some other way of getting a deposit.

Usually lenders require a minimum of 10% discount from the market value of the property (note; every lender is different and rules can change), but your family members you are buying from, can discount whatever percentage they wish.

So how does it work in practicl terms:

Your family have agreed to sell a property to you which on the open market is valued at £200,000, but they have agreed to sell it to you for £100,000.

Becuase the open market value is £200,000 the lender will allow you to borrow the entire purchase price, in other words, £100,000. This concessionary purchase means the discount acts as the deposit.

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Celebrating our success rates. Making you jump for joy

We believe in complete transparency and honesty at every stage. We publicise our success rates at different stages throughout the mortgage sales process, making sure you’re always in the know.

FIND OUT MORE ABOUT US

Our Success Rates

( Second quarter 2018 )

%

Research

  • We assess
  • You instruct us
  • We research
  • We find the best deal for you

%

Agreement In Principle

  • You agree to the deal
  • We submit the first stage of your application
  • You get an agreement in principle

%

Mortgage Offer

  • We submit the second stage of your application
  • We present your application in the best possible manner
  • They assess your situation
  • We support you throughout the process
  • They assess your property
  • You receive your mortgage offer

%

Completion

  • Technically our job is done but we also like to help
  • We liaise with solicitors and estate agents
  • We keep you updated
  • You achieve your goals

Talk to the First Time Buyer Mortgage Experts

Call us on (01237) 472321

or enquire now

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