First time buyers mortgage advice
Mortgages for first time home buyers
Mortgage advice first time buyers
To get a first time buyer mortgage, you will generally need to have saved at least 5% towards the cost of the home you are looking to buy. However, the more you can save, the better your mortgage options will be.
You will also need to have enough money saved to cover the additional costs of buying a home. But the exact amount you will need to pay is dependent on your lender and the property you are purchasing.Read more
If you are serious about buying your first home, then seeking independent mortgage advice could be worthwhile. A whole of market mortgage broker like Fosters Financial, can tell you how much you can borrow and if there is a suitable mortgage product for your needs. They will also secure a mortgage agreement in principle, so you can make an offer on your new home.
When you are ready to apply for your new mortgage, your dedicated case handler will guide you throughout the process. They will handle all the necessary paperwork, liaise with your lender, solicitor, and estate agent, and answer any questions you have along the way.
We want you to enjoy your experience of buying your first home. So, if you are interested in discussing your mortgage options, get in touch or book a free consultation with one of our mortgage experts!
First time buyer government schemes
If you are struggling to save a large deposit, there are a range of government schemes which could help to get you onto the property ladder.
Help to Buy ISAs
If you are a first time buyer and save for your deposit in a Help to Buy ISA, the government will top up any contributions you make by 25%. The maximum amount you will receive from the government is £3,000 and your savings can be used to purchase a property up to £250,000 or less (£450,000 if it is in London).
Help to Buy ISA accounts closed to new savers on 30th November 2019. However, a Lifetime ISA can also be used by first time buyers to purchase a home in the UK up to the value of £450,000. You can save up to £4,000 a year and the government will top up any contributions you make by 25%.
If you have a Help to Buy ISA and a Lifetime ISA, you will only be able to use the government bonus from one of these accounts to purchase your new home.
Help to Buy first time buyer
The Help to Buy equity loan enables first time buyers and existing homeowners to borrow 20% (40% if you are buying a home in London) of the cost of a new home. The loan is interest free for the first five years and will enable you to buy a home with just a 5% deposit and 75% mortgage. An equity loan can only be used for a newly built property and the purchase price cannot exceed £600,000.
Share to buy mortgage
Under the shared ownership scheme, you can buy a share of a home and pay rent on the remaining part. You can purchase between 25% and 75% of the property’s value and buy additional shares when you can afford to.
To qualify, you must be either a first time buyer or a previous homeowner struggling to get back onto the property ladder. Your household income must also be £80,000 or less per year or £90,000 a year if you live in London.
Right to buy
The right to buy scheme enables council tenants to buy their home for less than its market rate. You must have lived in your council property for at least three years, and if you sell it within five years of purchasing it, you will need to pay either all or part of the discount your received back, plus a share of the profit you make.
Right to acquire
The right to acquire scheme allows housing association tenants who do not qualify for the right to buy scheme, to purchase their home at a discounted price. To qualify, you must have been a tenant for three years and cannot have any large debts or be at threat of bankruptcy or eviction.