The First Time Buyer Process
1. Get started
Come in and discuss your mortgage funds with an adviser, make the most of your deposit and gain a Decision in Principle from your lender.
2. Find home
Find the perfect first home for you, and
we’ll lend a helping hand every step of the way to ensure you complete the application process stress-free.
3. Move in
Get ready for the big move whilst we take care of everything else for you, making sure you’re ready to collect your new keys in no time.
Becoming a first home buyer in Essex
As daunting as it sounds, buying your first home is one of the most exciting shopping trips you’ll ever have. Unless you own an extremely pricey car, your first home is probably the most expensive purchase you have made thus far, and your biggest financial investment to date, too. This makes it essential to have a clear plan set in place in order to manage your finances and get the best deal possible for your first mortgage. Having our expert brokers on board will give you the guidance you need to secure your deposit, calculate your monthly budgets and start enjoying the freedom of your very first home quicker than you can put your new keys in the lock.
Fix your finances
What deposit do I need?
As you're probably aware, the larger the deposit you put down, the smaller your monthly payments will be. If you haven't thought about saving for your deposit yet, it may be worth holding off buying your first home, or taking a look at the government Help to Buy schemes that allow you to pay as little as 5% for your deposit. Whatever your situation, our experience and knowledge can help you plan your deposit and find the best deal for you.
And remember, while it may be scary now, historically house prices have been known to rise throughout the years. This could mean that your deposit will become your first (and arguably your most important!) investment, and you could maximise your profit if you do decide to up-size in the future.Close
First Time Buyer fees
When looking to buy your first home, it's essential to take into account any fees you may incur during the buying process. There are a few to consider, but if they are managed well they shouldn't come as too much of a shock once the ball gets rolling. The good news is that, due to a recent change in the law, first time buyers will be relieved of any Stamp Duty costs that would previously have been charged for on properties worth up to £300,000 in Essex and up to £500,000 in London.
Alongside your deposit, you will need to allow for some or all of the following fees: lender's valuation, property survey, local authority searches, lender fees, solicitor fees, home insurance and general moving costs. Although this may seem overwhelming at first, this is not unachievable and our team here at Southern Mortgages will be there to help every step of the way.Close
Help for First Time Buyers
Along with the Help to buy, Shared Ownerships, and Right to Buy schemes,
first time buyers can also receive help from gifted deposits. This quite simply means that if a member of your family is in the financial position to do so, they can gift you your deposit in order to reduce your payments within the mortgage process. It is even possible for a friend to gift you a deposit, however this is not as convincing for a lender, so it becomes a lot less favourable. The help doesn’t have to stop there either: if you’re a first time buyer we always advise that you take a member of your family, or a property-owning friend with you to any viewings, just to make sure you don’t miss any of the fine details! However, if you have any questions or concerns regarding your first time buyer mortgage that you don’t think your family/friends can help with, do not hesitate to give us a call and start your journey today.
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Different Types of Mortgages
There are a wide array of mortgage types to choose from, and it can sometimes get a little confusing. Hover/tap on the box to find out more about the different mortgages available.
This is the most common type of mortgage and involves paying off a combination of your loan and the interest you owe each month, repaying the loan off in full by the end of your term (usually 25 to 30 years).
If you’re looking to have lower monthly payments, an interest-only mortgage could be for you. You don’t repay the loan amount that you actually borrowed – only the interest that you owe on it – until the end of your mortgage term.
If you have savings available, an offset mortgage could help you by either lowering your monthly payments or shortening your mortgage term, depending on what suits your needs.
Cashback mortgages mean that you receive a cash lump sum when you successfully complete your purchase. The lump sum that you receive varies depending on the lender, and you should be aware that this may increase your monthly payments.
If you are looking for stable monthly payments you can fix your payment for a certain period of time (typically 2 or 5 years, but sometimes longer). During this time the interest rate cannot change.
There are a few types of variable rate mortgages, but they all do exactly as it says on the tin – the interest rate can vary during the course of your term.
This is a type of variable rate mortgage,
where the rate “tracks” that of the Bank of England base rate. If the base rate rises, so does your mortgage rate and vice versa.
A discounted rate mortgage gives you a discounted rate for the first period of your term (normally between 2 and 3 years). This discount is deducted from the Standard Variable Rate offered by that lender.
Similar to a tracker mortgage, but it has a ‘cap’ to stop the interest rate going above a certain level. Sometimes they even have a ‘collar’ to stop the interest rate going below a certain level. Not as popular as they once were.
Flexible mortgages allow you to make underpayments, overpayments and even take “payment holidays” during the course of your term, meaning that your mortgage adapts to your financial needs. You could end up paying less overall in interest payments by choosing this type of mortgage.
Lending with big names
Dont panic! – our whole of market access to a large choice of lenders ensures that you will have a mortgage deal that is tailored to your situation and will maximise your chances of owning your own home.
Worried about Bad Credit?
Worry no more. Whatever your credit score, our friendly team can help steer you in the right direction and find a plan that’s fit for you.
Questions from First time Buyers
The mortgage process is never straight forward, so don’t worry if you still have some questions to ask. Take a look at our handy FAQ’s and, if you can’t find what you’re looking for, give us a call today.
Either way round is possible, and it really depends on your circumstances at this current time, but we do advise that you speak to us before you find your home, as this will give you a guide to how much you will be allowed to borrow from our wide range of lenders. There’s nothing worse than finding your dream home and then discovering that the price is slightly out of your mortgage budget.
This will be a combination of things- e.g. your income, your monthly outgoings on loans etc., any financial difficulties you’ve previously experienced and even what your average entertainment spend is! First time buyers can sometimes struggle with their credit score, not just because of debt and bad credit ratings, but merely because of the lack of credit history. There are ways to gain a lender’s confidence, including considering a credit card and continuously meeting your payment demands every month.
This process, however grilling, is easy to overcome as long as you have planned your budgets and finances in the right way and our team of experts are here to help you do just that.
A mortgage guarantor is essentially someone who signs a guarantee to the lender on your mortgage loan, so that if you miss payments of any kind, the lenders have a promised liability from your guarantor, meaning that they may have to pay the loan off for you. This liability normally lasts until your LTV is at about 80%, meaning you’ve already paid off the first 20% of your mortgage.
As a first time buyer, you could benefit hugely from this, as having a guarantor could have an impact on how much of a deposit you have to deliver. Find out if we can help you with a guarantor mortgage or family offset mortgages by giving us a call.
Get your First Time Buyer Mortgage
Speak to one of our advisers today and see how we can help you with a stress-free mortgage.
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