First Time Buyers Mortgages
The clue is in the name when it comes to who first time buyer mortgages are targeted at, but there’s plenty of features under the bonnet that separates them from traditional mortgages.
There’s been a gradual increase of people making their first property purchases since the financial crash in 2008. It triggered a response from the government and UK lenders to increase mortgage options for first time buyers, leading to a whopping 75% upturn since the crisis.
Am I Eligible For First Time Buyer Mortgages?
Whilst first time buyer mortgages do make it easier to get on the property ladder, there are still plenty of hoops you’ll need to jump through before funds will be made available.
As well as having never had full or joint ownership of a property before, you’ll need to fulfil a range of eligibility criteria which varies from lender to lender. These include, but are not limited to:
- Meeting income requirements
- Having a good credit score
- Being able to afford a deposit
Of course, the process of applying for first time buyer mortgages can take weeks if not months, and you’ll need to provide documents proving your available income, employment status and identification.
Your repayments are calculated based on the amount that you’re looking to borrow, the term that you want to borrow it over, and your interest rate. The interest rate that you choose will either be variable or fixed, so if you opt for a fixed rate you’ll pay exactly the same amount of interest from start to finish. If you’d rather go for a variable option then the interest rate will fluctuate throughout the term of the mortgage, meaning you could pay a higher or lower amount from month to month.
As with standard mortgages, the loan will usually be secured against the property that your purchasing so you’ll need to keep up with regular monthly repayments to avoid late charges or even repossession in some extreme cases.
Government Backed Schemes
As well as private lenders offering more mortgages for first time buyers, the government also stepped in with the Help To Buy scheme. This can support buyers by offering a huge helping hand with deposits and savings.
By saving just a 5% deposit, the government can subsidize an additional 20% to help with your first deposit. This is paid back at a very reasonable rate and can help you to take advantage of a property purchase with minimal initial investment.