A Guide to Mortgages for First-Time Buyers: Getting Started with Confidence
Buying your first home is an exciting milestone but navigating the world of mortgages can feel overwhelming. As a first-time buyer, understanding how mortgages work, what options are available to you, and how to find the right deal is key to making the process smoother and less stressful. Here we cover the basics of first time buyer mortgages:
Fee-free mortgage advice to help you get started on the right foot.
What is a Mortgage?
A mortgage is a loan specifically designed to help you buy a property. You borrow a percentage of the property’s value (usually around 80-95%), while providing a deposit for the remaining amount.
The loan is then repaid monthly over a set term, typically 25-35 years, with interest.
Types of Mortgages for First-Time Buyers
When you're looking for a mortgage, you'll come across various options. Here are the main types you should be aware of:
Fixed-Rate Mortgages: With a fixed-rate mortgage, your interest rate stays the same for a set period, usually 2, 3, or 5 years. This gives you peace of mind with consistent monthly payments, which is especially helpful for budgeting as a first-time buyer.
Tracker Mortgages: These mortgages follow the Bank of England’s base interest rate, meaning your monthly payments can go up or down depending on the base rate. While there’s more risk with fluctuating payments, tracker mortgages can sometimes offer lower rates overall.
Help to Buy Schemes: The government offers Help to Buy schemes for first-time buyers, including equity loans and shared ownership, which can make it easier to get on the property ladder with a smaller deposit.
Variable-Rate Mortgages: These come with an interest rate that can change over time, depending on the lender’s standard variable rate (SVR). While your payments might increase or decrease, they typically offer more flexibility with early repayment.
How Much Can You Borrow?
As a first-time buyer, how much you can borrow depends on several factors, including your income, credit history, and deposit amount. Most lenders will offer you a mortgage that is 4 to 4.5 times your annual salary, but it’s essential to get advice on what’s realistic for your situation and what monthly payments will be manageable.
Why Choose Fee-Free Mortgage Advice?
We understand that buying your first home can be both exciting and daunting. That’s why we offer fee-free mortgage advice to help make your journey as easy and cost-effective as possible. Here’s what sets us apart:
- Tailored Recommendations: We work with a wide range of lenders to find the best mortgage deals for your individual needs and circumstances.
- No Hidden Costs: Unlike some mortgage brokers who charge hefty fees, we provide our expert advice without any additional costs to you. This means more of your budget goes toward your new home—not broker fees.
- Step-by-Step Guidance: From understanding your borrowing options to helping you with the application process, we’re with you every step of the way to ensure you make informed decisions.
- Exclusive Deals: Thanks to our strong relationships with lenders, we can often access exclusive mortgage deals that aren’t available directly to the public.
Tips for First-Time Buyers
Save for a Larger Deposit: The more you can save for your deposit, the better your mortgage rates will be. Lenders often offer more favorable terms if you can put down at least 10-15%.
Check Your Credit Score: Your credit history plays a big role in how much you can borrow and the rates you’ll be offered. Make sure your credit score is in good shape before applying.
Budget for Extra Costs: Don’t forget that there are additional costs involved in buying a home, such as solicitor fees, survey costs, and moving expenses. Factor these into your budget from the start.
Get Pre-Approved: Before you start house hunting, it’s a good idea to get pre-approved for a mortgage. This gives you a clear understanding of how much you can borrow and shows sellers that you’re serious.
Let’s Help You Take the First Step
At Perry Bishop, we make getting your first mortgage simple, stress-free, and fee-free. With expert advice and a commitment to finding the best deal for you, we’ll help you turn the dream of owning your first home into reality.
Contact us or email us on mortgages@perrybishop.co.uk today for fee-free mortgage advice and let us help you take the first step toward homeownership.
(There may be a fee for arranging a mortgage and the precise amount will depend on your circumstances. This will typically be £350 on mortgage offer)
*Your home may be repossessed if you do not keep up repayments on your mortgage
Perry Bishop Financial Services Ltd is an Appointed Representative of Stonebridge Mortgage Solutions Ltd, which is authorised and regulated by the Financial Conduct Authority.
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