First Time Buyers

What is a first time buyer?

A First Time Buyer is someone who is looking to buy their first home which will be used as their main residence. In recent years it has been difficult for First Time Buyers to get onto the property ladder due to rising house prices and the need for higher deposit amounts. It is therefore important for first time buyers to prepare in advance of their application and make sure that they get the right advice from a professional mortgage adviser. This can be instrumental in ensuring you are able to move into your dream home.

When should I get an Agreement In Principle/Mortgage In Principle/Decision In Principle:

These are all the same thing. They are confirmation from a lender that subject to the information you have provided being correct they are happy to accept a full mortgage application from you. It is not a requirement for First Time Buyers but in a competitive house buying market having an Agreement In Principle in place can help set your offer for a property apart from other buyers as the seller of the property is more likely to take your offer seriously.

First Time Buyers tend to be in a stronger position when purchasing a property as they do not need to sell a property to complete the purchase. So by ensuring a First Time Buyer has an Agreement In Principle in place you will stand out from the crowd.

A further benefit to a First Time Buyer having an Agreement In Principle before making an offer on a property is the peace of mind that once the offer is accepted you will be able to process to completion as quickly as possible and avoid the potential disappointment of not being able to purchase the property you have fallen in love with

How Much Can I Borrow as First Time Buyer?

Being a First Time Buyer shouldn’t be a factor in how much mortgage lenders will be willing to lend to you. The amount you can borrow is calculated by a lender assessing your personal financial circumstances and your credit score.

How much you will be able to borrow will vary from lender to lender as each lender has their own criteria. Liaising with your mortgage adviser will enable you to have a good idea as to how much you will be able to as well ensuring that you will fit the lenders criteria this helps to save you the time and effort of doing this yourself.

How Much Deposit Will I Need as a First Time Buyer?

As a First Time Buyer you will normally need at least a 5% deposit for a standard residential mortgage application. However, you will find that a larger deposit amount of 10% or 15% will mean that you will be charged a lower interest rate by your mortgage lender. The amount of deposit you will need is based on your own personal circumstances.

It can be difficult to raise such a large deposit. There are however some schemes available which are aimed at helping First Time Buyers onto the property ladder. This includes some lenders who will lend to you even if you don’t currently have a deposit. Speak to our mortgage advisers to find out if you may be eligible for this scheme. 

I am a First Time Buyer How Can I Improve My Credit Score? 

Alongside your income your credit score has the biggest impact on if your mortgage application will be accepted. Before your adviser approaches a mortgage lender it is essential to be aware of your credit rating and how potential to improve it.

• Check your current address matches your credit report
• Ensure you remain within 50% of your available credit on any current credit agreements
• Make sure you are on the electoral roll at your current address
• Make sure any payments for credit agreements are made on time and in full
• Some First Time Buyers may have a low score due to never having had credit. A special credit builder credit card may be helpful to show you are able to manage your finances

Are There Any Fees For First Time Buyers? 

There may be some fees payable when a First Time Buyer first purchases a property below you will find some examples of the fees that may be payable

Arrangement Fees – Some more lenders may charge an arrangement fee. The amount will vary from lender to lender. Generally if an arrangement fee is payable as a borrower you may benefit from a cheaper interest rate.

Valuation Fees – Every lender will require a mortgage valuation to take place before they will be happy to offer you a mortgage. Some lenders may charge a fee to the applicant for this valuation. The amount will vary from lender to lender.

Legal Fees – As a first time buyer you will be required to appoint a solicitor who will arrange conveyancing and local authority searches. These fees will be payable directly to the solicitor and the overall cost will be dependent on the level of work involved in your individual case.

Stamp Duty – First Time Buyers currently benefit from an exemption on Stamp Duty for purchases up to £425,000. If you are applying with a partner it is important that to benefit from this exemption both applicants must be First Time Buyers.

I Have Poor Credit Can I Buy A Home As A First Time Buyer?

Just because you have had credit issues in the past it doesn’t mean that you won’t be able to buy your dream home as a first time buyer. Lenders may be willing to offer you a mortgage. However, you may be required to provide a higher deposit. 

Our qualified and professional advisers will be able to guide you and ensure that your mortgage is with the best lender for your personal circumstances.

How Can PAB Wealth Management Help First Time Buyers? 

Being a First Time Buyer and purchasing your first home can be intimidating. From establishing which mortgage is best suited to your needs to finding a lender who will offer you a competitive mortgage rate. Our qualified and experienced mortgage advisers will help to reassure you through the whole process.

Even confident buyers will benefit from a mortgage advisers advice. We have access to mortgage deals that you won’t find direct with lenders. Meaning that we can not only find you the most suitable mortgage deals available to you.

Don’t just take our word for it. We are 5* rated on Google check out our reviews to see how we help our customers with their mortgage needs. 

Mortgages are complicated. Check out our mortgage jargon busting page for more information. 

Your home/property may be repossessed if you do not keep up repayments on your mortgage