First Time Buyer Mortgages And Rates

The average first-time buyer is 30 years old, According to UK Finance Data, 2018. And as a first-time homebuyer, you should have probably saved enough money as a deposit for your first home. Once you have a deposit you could find out how much you can borrow, and get a better idea of how much of the monthly repayments you may afford when in the market for a new home.

Assuming you have saved up the deposit as a down payment for your first home, use our mortgage calculator to estimate the costs of your new home. First-time buyers with a deposit are eligible for fewer interest rates than if you have no deposit. Without a deposit for your home, you are susceptible to higher or competitive rates.

Applying for 100% home loan?

The process involves property searches, home insurance, removal costs, stamp duty, solicitors fee, mortgage arrangements, and so on. According to Money Super Markets, some “first-time buyers and home movers may need slightly higher deposits than Pre-COVID, with some lenders seeking a 10% – 15% deposit.”

As part of the process of applying for a mortgage as a first-time buyer, lenders will check your credit score history to see if you’re not high risk and whether you will be able to make repayments on your loan. They will use that information to do an affordability assessment to see how much you can be able to borrow.

Mortgage lenders will usually have a maximum loan-to-value – LTV – they’re willing to offer you. This is the maximum mortgage loan you can take out as a percentage of the property value. So if, for example, the property value was £400,000 and you were offered a mortgage of £32 0,000, your LTV would be 80% and you’d need a deposit of £580,000, which is 20%.

Speaking to your lender or a couple of lenders about your mortgage agreement before deciding to go and view properties is recommendable, it proves to your lenders that you’re serious about your loan and for your side, you can get an idea of how much you can be able to borrow.

Lenders will want to do a full credit report before proceeding further with the application.

Different Types Of Mortgages For 1st Time Buyers

THERE ARE DIFFERENT TYPES OF MORTGAGES THAT A FIRST-TIME BUYER CAN CONSIDER:

• Joint Mortgage
• Guarantor Mortgage
• Shared ownership

How much you’ll pay as monthly mortgage repayments will depend on what type of mortgage you are eligible for. The types of mortgages available include:

• Fixed-rate mortgages
• Offset mortgages
• Tracker mortgages

Comparing mortgages as a first-time buyer by using a comparison tool will help you get a better understanding of what kind of mortgage deals that are out there and best suited for you based on your loan-to-value.

Remember that any monthly repayments and rates you see could change when you apply for a mortgage in principle and the mortgage offer, once the financial checks have been carried out, so playing around with your mortgage calculator could help you with estimates.

Final remarks

When you enter your information, using the SmartmortgagesUK mortgages calculator, you’ll be able to get an estimate of your monthly repayment. Submit your information on the get a quote form for a comparison of deals from our credit experts.