First Time Buyers
Being new to the mortgage market the process may seem daunting, but rest assured as a First Time Buyer you are the most sought after client the banks are currently looking for.
As a mortgage broker / advisor we can advise you without partiality on each of the different banks (operating in the broker market) mortgage offerings for first time buyers.
Banks we deal with:
NB At present we are not charging mortgage customers a fee – if we cannot get you a mortgage we will not be paid a commission by the banks.
Also, it is worth noting that the mortgage rates you get from a Broker are the same as those available by going into a branch or applying online.
- Which banks will give an LTV (Loan to Value) Exception and which banks will give an LTI (Loan to Income) exception and what is there criteria?
- Which bank will give me the most money i.e. which banks take account of commissions and overtime?
- How much of the deposit can be a gift from a parent etc..?
- How much money can I get if I am self-employed?
- What mortgage rates apply? – the difference between Fixed, Variable, Tracker and Discount mortgage rates
- What is the maximum term for a first time buyer?
- Which offer mortgage breaks at the start of your mortgage – allowing you to use your initial monthly repayments to assist in refurbishing the property
- Where to get mortgage protection and who provides the cheapest cover?
Here is some important information you need to know before applying for a First Time Buyers Mortgage:
You will need to get Home Insurance. It is mandatory.
Be aware of possible penalty charges if you break the following terms of your mortgage: if your mortgage has a fixed rate of one year minimum and you decide to do an early mortgage repayment (whole or partially), if you switch to a variable interest rate, or to other fixed interest rate.
Don’t forget to budget for other costs. You will need to keep aside some funds for legal fees, surveyor fees, valuation fees, and stamp duty.
And have some consideration towards the standard variable rate. The standard variable rate is the primary mortgage rate charged by your lender. It is the long-term rate of interest that your mortgage will switch to once your introductory fixed-rate period has ended.
A variable rate means your monthly repayments can go up as well as down based on European interest rates and your mortgage lender.
After assessing your individual situation and advising you accordingly we will then professionally package your mortgage application so that it meets fully with the expectations of the proposed bank.
In addition we are flexible with regard to meeting times so you don’t have to take time off work, as you would with a main street bank.
We will review your current financial position, listen to what you want to achieve and recommend a suitable mortgage solution that is right for you and meets your needs.
First Time Buyer Tips
Know what you can afford
Before you even begin house-hunting, you will need to know how much you can afford. Your application for a mortgage will be rejected if you cannot afford your mortgage repayments. Another reason is that if you can provide a higher deposit for the house you will buy, the amount you need to borrow will be less. The interest rates will also be lower. The lender will also consider how much you can pay by reviewing your current expenses and income.
Check your credit score
Aside from the ability to pay the lender, they also want to know your creditworthiness by checking your credit score. This is affected by many factors, including the way you pay your bills and the amount of your monthly spending on your credit card. To avoid surprises when you are applying for a mortgage, make sure that you know your credit score beforehand. If it doesn’t look good, you need to spend more time building up a good credit history before buying a house.
Apply for a “mortgage in principle”
A mortgage in principle is an agreement from the lender that they will give you a set amount but only in theory. It is a way to show that you can secure financing for the property you are interested in. When the property is hot, the chance of getting it will be high if you can show the seller the agreement. Once you have made a deal with the seller, you still need to apply for a mortgage and the lender will consider this property.
Check your eligibility for schemes
Lenders can have different schemes that can help first-time home buyers. While they are offering this to you, make sure that you understand the exceptions. Check what is the requirement and see if you qualify on any of these schemes.
Stay within your price range
During the process of house-hunting, you may be up against the competition and get tempted to offer more, especially if this is your dream home. You need to stay within the range of your mortgage in principle or the range that you can afford. Make sure that you are not overpaying. The lender used this home as security against the amount of the loan.
Update all your details
Application for a mortgage requires much paperwork, which the lender is painstakingly checking one by one down to the very last detail. If there is any discrepancy in your application, it could mean rejection if not a delay. To avoid this consequence, you need to check every supporting document that you are submitting are all correct and updated.
Provide evidence of your deposit
One of the requirements of lenders is proof of deposit and evidence where this money is coming from. If you tell them that you are saving up, they will ask for evidence of these savings like your last months’ bank statement. If you tell them that this is a loan from your parents, they will add this as a factor for your affordability.
If you are a first-time buyer who is a bit lost in applying for a mortgage, we advise you to hire a mortgage broker. They can help you arrange all the documents and will help you improve your chance of getting your loan approved.
Effect of missing repayments
Warning: IF YOU DO NOT MEET THE REPAYMENTS ON YOUR LOAN, YOUR ACCOUNT WILL GO INTO ARREARS. THIS MAY AFFECT YOUR CREDIT RATING, WHICH MAY LIMIT YOUR ABILITY TO ACCESS CREDIT IN THE FUTURE.
Warning: IF YOU DO NOT KEEP UP YOUR REPAYMENTS YOU MAY LOSE YOUR HOME.
If your mortgage is ever on a variable rate
Warning: THE COST OF YOUR MONTHLY REPAYMENTS MAY INCREASE.
If your mortgage is ever on a fixed rate
Warning: YOU MAY HAVE TO PAY CHARGES IF YOU PAY OFF A FIXED-RATE LOAN EARLY.
If you have included debt consolidation in your mortgage
Warning: THIS NEW LOAN MAY TAKE LONGER TO PAY OFF THAN YOUR PREVIOUS LOANS. THIS MEANS YOU PAY MORE THAN IF YOU PAID OVER A SHORTER TERM.
Interest only mortgages
Warning: THE ENTIRE AMOUNT YOU HAVE BORROWED WILL STILL BE OUTSTANDING AT THE END OF THE INTEREST -ONLY PERIOD.