First Time Buyer Mortgage
What is a First Time Buyer Mortgage?
Mortgages for first-time buyers are designed for individuals entering the housing market for the first time. Typically, you qualify as a first-time buyer if you’re purchasing a property intended as your primary residence and have never owned a property previously.
How Does A Mortgage Work?
A mortgage is a type of loan used to borrow money for the purpose of buying or refinancing a property. These loans are typically repaid over long periods, often 25 years or more, to distribute the considerable cost of purchasing a home.
Mortgages are typically offered by banks and other financial institutions, referred to as “lenders”. These lenders impose interest charges and, in some cases, additional fees on the borrowed amount.
To ensure repayment of the loan, interest, and fees, the lender will place a “charge” or “security” on the property’s title. This enables the lender to sell the property if the mortgage cannot be repaid.
What Are The Stages of a Mortgage?
When applying for your first mortgage, you will go through several stages – mortgages can move slowly or quickly depending on many different circumstances.
Mortgage Calculator
The first place most people start is with a mortgage calculator. This tool provides a quick indication of how much you may be able to borrow and gives you an idea of the potential costs associated with different borrowing amounts and terms.
Mortgage Deposit
At this point, it’s important to consider a mortgage deposit. To be potentially eligible, you’ll need a deposit of at least 5% (a 95% Loan-to-Value mortgage) of the purchase price. However, the higher your deposit, the less money you will need to borrow. Therefore, you may also want to consider a 90% Loan-to-Value mortgage or higher.
Agreement in Principle
Once you’re house-hunting, the next step is to obtain an Agreement in Principle. This is a personalized indication of the amount that a bank may be willing to lend you. It can be presented to sellers and estate agents to show that you are potentially financially capable of purchasing a property.
Mortgage Application
Once you have your Agreement in Principle, and you have found a property with an accepted offer from the seller, it’s time to apply for your mortgage.
Mortgage Approval
Once your mortgage is approved, you will typically collaborate with a conveyancer, estate agents, and other relevant third parties to determine a ‘completion date’ or ‘settlement date’. This is when the legal ownership of the property is transferred to you.
At this stage, your conveyancer will ‘drawdown’ the borrowed funds to complete the transaction.
What Does Drawdown Mean?
Drawdown is the process where your mortgage provider releases the funds to your legal representative for the purchase of a property. Once drawdown occurs, you are required to repay the borrowed amount along with any applicable interest and fees. It is important to adhere to the terms outlined in your mortgage agreement.
We understand that going through all of these stages for your first property purchase can be stressful and intense. One thing is always guaranteed, we work hard to find the deal that is Best 4U and offer support throughout the whole journey!
What Other Mortgage Options Are There?
If a First Time Buyer Mortgage isn’t for you, we offer other mortgage options, including Lifetime Mortgages, Buy to let Mortgages and Complex Income Mortgages
Why Best 4U?
As an independent mortgage broker, we are only interested in getting the best deal for our clients! We work with a wide range of lenders and can view the whole of market, with your goals and dreams in mind we can help you to get the deal that is Best 4U!
We take the time to get to know our clients, understanding what they’d like to achieve, and we work with them to get them there – as fast as possible! With over 25 years of experience and thousands of happy clients, we really do believe in and love what we do!
