First time buyer mortgages explained
Buying your first home often comes with plenty of questions, especially about mortgages. However, we’re here to guide you through each step of the process.
1. Your initial deposit
Just like most buyers, you'll need to have an initial deposit ready. Typically, this amounts to around 10% of the property's value, although requirements vary among lenders. Remember, having a larger deposit can often work in your favour, potentially leading to better interest rates.
2. Applying for an ‘Agreement in Principle’ (AIP)
Consider applying for an Agreement in Principle (AIP) or Mortgage in Principle – a mortgage provider can help you get a better understanding of how much you can borrow for your first property.
The AIP can be applied for online and involves a soft credit check. It remains valid for up to 90 days, allowing you to confidently explore your options.
This step provides you with an estimate of how much you can borrow, offering valuable insight into what you can afford to buy. An AIP does not however guarantee that you will be approved for a mortgage with a provider.
You can also use our Mortgage Calculator to work out how much you can afford and to see how much the monthly repayments would be for your dream property.
3. Types of first-time buyer mortgages
There are several types of mortgages tailored specifically for first-time home buyers. Each option has its own set of advantages:
- Fixed Rate: Offers stability with consistent monthly payments for a pre-agreed period, ranging between 2 to 15 years. This is a popular choice with buyers who want to pay the same amount towards their mortgage every month.
- Standard Variable Rate (SVR): Can see interest rates fluctuate based on market conditions.
- Tracker: Similar to variable rates but will follow external interest rates, rather than those set by the provider.
- If you’re linked financially to anyone else and the effect their credit rating subsequently has on yours
- Guarantor: Although not strictly a mortgage product, this involves a third-party who ‘guarantees’ a payment will be made if necessary.
4. Other new home buying schemes and considerations
To improve your chances of securing a new homes mortgage, you will need to demonstrate that you’re in a stable financial position. In addition to having a deposit, it can help to:
- Maintain a good credit score and history. Use sites like Checkmyfile to check your credit score.
- Provide evidence of your ability to make repayments (e.g. monthly bills)
- Have a credit card and show you make regular repayments
- Have additional savings
- Be in full time employment
5. Support from Independent Financial Advisors (IFAs)
We work with Independent Financial Advisors (IFAs) to ensure you find the mortgage that best suits your needs.
The New Homes Group can help you, a seller, our team, and lenders all have a clear understanding of your financial status. We therefore request that all potential buyers are qualified by The New Homes Group to help progress their home buying journey.
You can then of course proceed with The New Homes Group or use a provider of your choice. Here is some more information about The New Homes Group.
If you’d like to know more about new homes mortgages or if you have an enquiry about one of our first-time buyer homes, please get in touch using the contact details on this page.