Our team of experts just love helping first time buyers like you find the right mortgage – and each advisor knows the insider secrets and best contacts to get you the best mortgage for your first house.
Lenders will look at how much you earn and your outgoings. As a general rule, multiply your income by 4.5 and you’ll get that magic number.
As a first time buyer, you’re probably buying your first home after moving out from a family home or a rented house. Either way, getting your first mortgage seems daunting. This is where we come in. Our expert brokers will find out all about you, your history and future plans, and let you know which mortgage is best for you.
We don’t just pick a mortgage product, we will be by your side until you’ve turned the key in your front door of your first home. And we’ll even stick around afterwards (if you’ll have us).
As a first time buyer, your first home will likely be the biggest purchase you’ve made yet and the list of considerations is probably endless. But don’t be daunted about getting your first mortgage, millions of people have successfully bought their dream home before you, and you can do it too.
First things first, you should work out how much you can afford. Viewing a £3,000,000 penthouse in Kensington sounds like fun, but if you can only afford £300,000 you might get your heart broken. Give us a quick call and our specialist first time buyer advisors can give you an estimate on how much you can borrow or get number crunching yourself and use our mortgage calculator.
We can also arrange an Agreement in Principle (AIP) for you, also known as a decision in principle (DIP), Mortgage in Principle or Mortgage Promise, depending on the lender. This provisionally lets you know how much a particular bank will lend you however this isn’t a promise or a guarantee. Once you know how much a particular lender will offer you, you can start to go house hunting within your budget. An agreement in principle is a soft credit check so it won’t affect your credit score.
Depending on the lender your Agreement in Principle will be valid for between 30 and 90 days. In some cases, you can renew the agreement and extend it but otherwise, you may need to apply again. At every step your Coreco mortgage advisor will be there to support you.
When you’re ready to put an offer on your first property, you can use the AIP to show the seller and estate agent that you are a serious buyer who has already considered their financial situation.
One of the biggest obstacles between you and your first home is probably the deposit. The average deposit for a first time buyer is around 20% but the good news is that there are a number of lenders that will accept a 10% or even 5% deposit.
Once you have worked out the amount you need to save, create a plan to reach this goal. If you know you need to save £20,000 and you want to buy your first house in 5 years’ time, put away £333 each month. If this is out of your budget, then you need to reassess your goals and adjust your monthly payments accordingly.
Don’t forget that, if you qualify, the government will give you a boost on your savings through a Lifetime ISA, specifically designed to help you save for your deposit on your first home. These ISAs can also be used in conjunction with the Help to Buy Equity Loan scheme. If you’re planning on buying your first home in the next few years, we think this is a no-brainer.
Our experts can give you an idea if your goals are achievable and what you need to do to
make sure your finances are in order.
You’ve chosen your first home (yay!) but now you need to put in an offer (uh-oh). If you offer too little, your offer might be rejected, offer too much and the lender might not be able to lend you enough. Our advice is to do your research. Have a look at what properties nearby have sold for and, most importantly, only offer what you can afford.
As soon as your offer has been accepted, get in touch with your friendly mortgage adviser. We can get moving on your mortgage application straight away leaving you free to go sofa shopping.
There are a range of support schemes available for first time buyers to help them get onto the property ladder. Some of these are government schemes such as LISAs, Help to Buy ISAs (if opened before December 2019), the help to buy equity loan and the mortgage guarantee scheme. Others are run by lenders themselves such as Barclay’s Springboard mortgage which allows family and friends to help with your deposit.
If you have a LISA you can use this to buy your first home if the property costs £450,000 or less. The government will add a bonus of 25% to your savings each year up to a maximum of £1000 per year, so the earlier you start saving the bigger the bonus when you come to buy your first house. If you’re buying a property with another first time buyer you can both use your LISA towards the same property.
While the chance to open a help to buy ISA has passed, if you have already opened one before December 2019 you can still use this for your deposit as long as you purchase the house before December 2030. Like the LISA, the government will give you a 25% bonus on any savings in your account.
The Help to Buy Equity Loan is available for first time buyers who want to buy a new build house that falls within the relevant regional price caps. You can find out more about this scheme on our help to buy mortgage page.
There is also a mortgage guarantee scheme that was announced in 2021 which is designed for lenders and gives them the option to get a guarantee on mortgages where the borrower only has a 5% deposit. While this doesn’t directly support you, it does increase the availability of mortgages with only a 5% deposit.
For first time buyers, the mortgage process is full of unknowns and when mixed with the large sums of money involved it can be an anxious process. Our first time buyer mortgage advisors have all been through the same process with their properties and are here to offer friendly guidance throughout the process.
The first step in the mortgage process is finding out how much you can afford to borrow for your mortgage. This is determined by two main factors, how much you’ve managed to save for your deposit and your annual income. Our suggestion would be to take a look at our mortgage calculators to get a rough idea of how much you might be able to borrow. Once you have a rough idea of the mortgage you can get it’s worth having a quick look at house prices in the area you want to live.
The next step is to get an agreement in principle. While our handy mortgage calculators are ideal for getting a rough idea of the amount you can borrow, an agreement in principle will take a closer look at your finances and give you a more accurate estimate. With your agreement in principle you can show estate agents and sellers that you’re a serious buyer and you can afford the property.
With your agreement in principle it’s time to make an offer on your chosen property! This will be done through an estate agent and shouldn’t cost you a thing. Making an offer on a property can be a challenge as you’ll want to strike a balance between getting good value for your money and not losing out to others who are willing to pay more. Your Coreco advisor will be able to help you strike a balance.
The solicitor and surveyor will help uncover any potential problems with the property you’re looking to buy. The solicitor or conveyancer will handle the legal side of things such as checking if there are any planning or local issues that will affect the property price.
There are two types of surveying that will take place. The first is a valuation survey and this will be completed by the lender. This is to assess the property to make sure that it’s worth the value they’re lending to you. The second survey is a property survey and this looks at the condition of the house along with any potential problems and repairs required. This is something you would organise yourself.
Once you have your surveys complete you can then make any adjustments to your offer on the house. For example, if the property survey uncovered an issue that would cost £5000 to put right, you might be able to negotiate a discount with the seller. Another example could be that the property valuation comes out lower than what you’ve offered.
Once your offer has been accepted, your Coreco mortgage advisor will proceed with the full mortgage application and your mortgage provider will send you a binding mortgage offer.
This is the stage that buyers find most stressful as there can be delays and problems that are out of your control however your advisor is always on hand to support you.
If everything goes to plan then you should receive a contract from the seller to sign and complete the sale. Before signing anything it’s worth reviewing everything with your solicitor and your mortgage broker, and once you’re happy with the contract it’s onto completion and the final steps.
The final few steps are usually handled by your solicitor and these include:
The short answer is once you’ve made an offer on your property! However, we recommend that you apply for an agreement in principle before you start looking for properties. That way you can find out if you can borrow more than you expected or save yourself some disappointment if you can’t afford the house you’ve dreamt about just yet.
As a first time buyer things can get confusing very quickly, with large sums of money and long term repayments you want to be confident you’re choosing the right mortgage product for you. Luckily your mortgage advisor will help to choose the best mortgage product to fit your needs but we’ve explained the different types for those interested!
Tracker mortgages follow the Bank of England base rate plus a few percentage points extra. For example, you might pay the current base rate of 4.25% plus an extra 1% making your total interest rate 5.25%. These types of mortgages can either track at a certain amount for a certain period of time, say 2 years, before moving over to the lender’s standard variable rate, or they could be a “lifetime” tracker, tracking at a certain amount above Bank Base rate for the whole term of the mortgage.
With a discount mortgage you pay your lenders standard variable rate and they will offer a percentage discount on the variable rate. It could look something like this, your lender’s standard variable rate is 7% and they offer you a 1% discount, so you would pay 6% interest. These types of deals, like the tracker mortgages, usually have an introductory rate before moving to your lender’s standard variable rate.
Fixed rate mortgages are exactly how they sound, you pay the same interest rate for the entire deal period regardless of any interest rate changes or Bank of England base rate changes. Fixed rate mortgages are good for those that like to know exactly how much they’ll be paying each month.
These deals tend to be offered in 2 and 5-year terms before they fall back to the standard variable rate. This when remortgaging to another product can help save some money.
Each mortgage provider has their own standard variable rate and it can be set at whatever value they like. Standard variable rate mortgages can change at any time and are mostly driven by the mortgage product market as lenders compete to offer the best rates. As there are plenty of deals to be had out there we would recommend remortgaging before you move to your lender’s standard variable rate. We recommend getting in touch with your advisor at least 6 months before your offer period ends to give you and your advisor time to find the best deal.
Unfortunately, it’s not just the mortgage you need to pay for, other costs are attached along the way. It’s best to think about these early on in the house buying process so that you have to cover these extra costs as well as your deposit.
Some mortgage providers will charge you a fee for valuing the property you’re looking to buy while others will include this as part of the mortgage but charge higher interest rates. Typical valuation fees range from £200 – £700 depending on the value of the property.
The valuation looks only at the value of the property whereas a house, building or property survey will uncover any structural and other types of issues. The most common types of house surveys are the RICS HomeCondition report, RICS HomeBuyer report and a more in-depth building survey that looks at the structure. These can range from £500 to £1500 depending on the survey and property type.
It’s also worth noting that you may need to do this more than once if you pull out of the offer due to anything found in the report or if your offer falls through for another reason.
These are the fees that are paid to your solicitor or conveyancer to cover the legal aspects of buying a property. This includes things such as:
Stamp duty is a tax you pay on all property and land transactions however as a first time buyer things are slightly different. If you buy a property in England or Northan Ireland, provided that the property you buy is £500,000 or less, you won’t pay any stamp duty on the first £300,000.
On anything between £300,001 and £500,000, you’ll pay a reduced rate of 5%. If your first house costs over £500,000 you won’t qualify for a discount on stamp duty and you’ll pay the standard rates.
Things are slightly different in Scotland and Wales, in Scotland you’ll have to pay Land and Buildings Transaction Tax which works in a similar way to stamp duty. The tax-free limit for first time buyers is set at £175,000, if your home is more expensive you can still benefit from tax relief on the first £175,000 of the purchase price. In Wales, you pay a Land Transaction Tax and there is currently no tax relief for first time buyers. However you only pay the Land Transaction Tax on properties over £180,000 which means it works out similarly to Scotland.
If you’re moving into your first home you will need to move everything from your old home into your new one. Depending on the size of your current home you might be able to hire a van and move everything yourself or if you have a lot of things it can be easiest to hire a removal company. These costs vary and depend on how much there is to move and how far it needs to be moved.
If you’re lucky enough to move into your own home at a young age the chances are that you won’t have much furniture to move into your new house. When buying your first home it’s worth checking with the seller what they plan to take with them when they move so you have a rough idea of what you’ll need. While luxuries such as a cosy corner sofa or a home office sound appealing, you’ll need to think about what you’ll need from day one. This includes essentials such as a fridge, oven, plates, cutlery and all the other daily essentials that are easy to forget.
You’ve now moved into your new house (yay!) but there are ongoing costs to consider alongside your mortgage payments. Although the exact costs will vary on a range of factors, your ongoing costs might include:
These costs can add up to £4,144 per year however this will vary depending on a range of factors such as location, house size and your personal requirements.
Your home may be repossessed if you do not keep up repayments on a mortgage or any debt secured upon it.
A fee of up to 1% of the mortgage amount may be charged depending on individual circumstances.
A typical fee is £495.
We know you’re curious so we’ve picked out some of today’s best mortgage rates to give you an idea which lenders and interest rates could be available to you.
Latest mortgage best buys
Based on a property price of £300,000 with a £30,000 (10%) deposit
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