Congratulations! You are in the process of buying a house.
The first thing to do is decide whether you want to buy a new or used home. The next step is finding out what your budget will be, which can depend on how much money you have saved and how much of a down payment you want to put towards the purchase price.
Buying your first property is a life-changing event, but the process may be overwhelming, which is why our goal is to make it as stress-free as possible.
We will walk you through the whole mortgage process, step-by-step, and keep you informed at every stage so you know what is going on and why. We’ll assess your affordability and budget, and by comparing a variety of mortgages from throughout the market, we can provide you with the finest introductory rates, lowest interest rates, and most adaptable mortgages to fit your circumstances.
Don’t worry, we’ll be with you every step of the way.
We’ll go through the mortgage alternatives available to you and recommend the best option for your situation. We can provide you with information on which type of survey will be most appropriate for the property you want to buy, as well as recommendations for solicitors to perform the legal aspects of the purchase and arrange buildings, contents, and protection insurance.
First Time Mortgage Deposit
In order to acquire a property, first-time buyers are frequently asked to put down a deposit. This deposit is usually 10% of the purchase price. But in some cases, a deposit of 5% may be sufficient – especially if the buyer is taking out a Help to Buy mortgage.
Once you have saved for and found the perfect home, it is important to get a mortgage in place so that you can put an offer down on the property. This is where we come in.
Different Types of First Time Buyer Mortgages
When it comes to mortgages, there are a few different types of rates that you can choose from.
Fixed-rate mortgages offer borrowers a set interest rate for the entire duration of the mortgage, which can be helpful in budgeting and planning for the future.
However, if interest rates drop during the term of the mortgage, the borrower would be stuck paying the higher, fixed rate.
Variable-rate mortgages have an interest rate that can change over time, which means that your monthly payments could go up or down. This type of mortgage may start with a lower interest rate than a fixed-rate mortgage, but there is more risk involved since the payments could increase significantly if rates rise.
Standard variable rate mortgage (SVR)
At the lender’s basic rate of interest. SVRs don’t have discounts or lower interest rates, and the lending institution may alter the rate of interest they charge.
Tracker mortgages are another type of mortgage that is popular with first-time buyers. These mortgages have a fixed interest rate for a certain amount of time, but the interest rate will vary depending on the Bank of England Base Rate.
This type of mortgage can be helpful for first-time buyers because it offers some predictability in terms of monthly payments, but it also allows the borrower to benefit if interest rates drop during the term of the mortgage.
Discount rate mortgages
Discount rate mortgages offer a discounted interest rate for a certain period, usually two to five years. This type of mortgage can be helpful for first-time buyers because it offers a lower interest rate and monthly payments for a set period of time.
However, after the discount period ends, the interest rate will usually increase to the lender’s standard variable rate.
Capped rate mortgage
A capped rate mortgage is a type of mortgage that has a maximum interest rate that it can reach. This type of mortgage can be helpful for first-time buyers because it offers protection against interest rates rising to a certain point.
However, if interest rates do drop below the cap, the borrower would still be stuck paying the higher, capped rate.
Adjustable-rate mortgage (ARM)
First-time buyers may also want to consider an adjustable-rate mortgage (ARM). This type of mortgage has an interest rate that can change over time, which means that your monthly payments could go up or down.
However, if interest rates rise during the term of the mortgage, the borrower would be stuck paying the higher rate.
Choosing the right type of mortgage is one of the most important decisions a first-time buyer will make. It is important to speak with a mortgage advisor to find out what type of mortgage is right for you.
Our team are on hand to answer any questions and help you get you the best mortgage for you. For a free no obligation appointment with one of our mortgage advisors, click here