FIRST TIME BUYER (FTB) MORTGAGES

Important information – Think carefully before securing other debts against your home. Your home or property may be repossessed if you do not keep up with repayments on your mortgage. Please note that the Financial Conduct Authority (FCA) does not regulate most buy to let mortgages.

Getting a mortgage in place can be daunting at first, but with the right preparation the process can be completed in a straightforward manner. These secured loans often offer additional incentives such as cashback to help you get onto the property ladder as easily as possible.

First time buyer mortgages tend to share similar features as other mortgage types in terms of the term of the mortgage and the need to make monthly repayments. You will also be required to provide a deposit to the lender, however this is often much lower than with other arrangements.

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Loan key features

  • Capital repayment with terms of up to 40 years
  • Loan amount determined from assessment of income and affordability
  • All types of properties considered for lending
  • Loan to value (LTV) of up to 100%
These mortgage products are suitable for homeowners looking to get on the property ladder for reasons which include:

  • Buying a property for the first time for own occupation;
  • Have previously owned a property but have not for an extended period of time;
  • Are buying without having a property to sell and therefore known as the ‘end link’ of a property chain

How a repayment mortgage works

Each month you make a payment, you contribute towards the loan capital as well as the interest that accrues. At the end of the chosen term, provided all payments are made in full and on time, you will have repaid the entire loan and interest. In the first few years, the majority of payments made will be to pay off interest. However as more payments towards capital, this results in interest accruing less each period and more capital is repaid based on the same payment amount.

How a lender assesses your application

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Government schemes

Help to Buy    
Under this government scheme, first time buyers will be able to purchase a new build property with just a 5% deposit, provided the builder is recognised with the scheme. Buyers will only require a 75% loan to value (LTV) mortgage, with an additional 20% equity loan made available. This is offered on an interest-free basis for the first five years. The scheme is available on property values up to £200,000 in Scotland, £300,000 in Wales and £600,000 in England.

Shared ownership

Mortgage calculators

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The property buying process

Conveyancing

The legal side of property sale and purchase can be carried out by either a ‘solicitor’ or ‘licensed conveyancer’. For simplicity, we will refer to both of these as conveyancers. They will check who owns the property that is being sold, what is included in the sale, and whether there are clauses in the property’s legal title you or your lender need to be aware of. In Scotland your solicitor will also put in your offer to buy the property and negotiate for you.

You will need to:

  • Get an estimate from them of costs, including legal fees and VAT.
  • Tell your conveyancer if you have negotiated any additional items to be included in the sale, including kitchen appliances, carpets or curtains.
  • Make sure to read any documents your conveyancer sends you very carefully, and ask for clarification if necessary.

If you are unsure who to appoint as your conveyancer, your mortgage adviser can help you find one through our Conveyancing Service. Using our Conveyancing Service is not a requirement of applying for a mortgage through us and you can use any conveyancer you choose to appoint.

After exchange of contracts, you will be asked by your conveyancer to sign the mortgage deed and the document to transfer your new home to you. They will also apply for the mortgage money from the mortgage lender, and ask you for any balance they need to complete your purchase.

Your conveyancer will call you to confirm the legal process is complete. You can then pick up the keys to your new home.

Mortgage application

After an offer is accepted on a property, you will need to complete a full mortgage application. This can be done by talking to one of our mortgage advisers.

Covering the whole market, our advisers work for you independently and have access to a wide panel of lenders. They will ask you about your needs and circumstances and then recommend the most suitable mortgage for you.

An appointment can be booked by contacting our team on 029 2009 9003, by online chat or by booking directly online.

When ready to start your full mortgage application, you can arrange to speak to one of our advisers who can help guide you through the process. Unlike high street banks, there are no face-to-face meetings and no waiting times, making the process of buying a property a much smoother process.

In preparation of your mortgage meeting, there are some documents that your adviser will need to see including payslips, bank statements and proof of your identity. Details of the property being purchased will also be required.

Both during and after your meeting, your adviser will:

Complete background checks with a leading Credit Reference Agency.
Discuss available valuation schemes.
Review your income and regular financial commitments.
Review the needs and circumstances and recommend the most suitable mortgage based on these.
Give you an illustration, which sets out the terms of the mortgage product and the total cost of the loan.
In Scotland sellers must provide a Home Buyers report which includes survey, Energy Performance Certificate (EPC) and Property Questionnaire.

Arrange an Agreement in Principle

An Agreement in Principle (AIP) provides you with a commitment-free mortgage promise outlining how much a lender may be able to offer you. This is personalised based upon information provided and is required before starting a full mortgage application. Estate agents and property sellers will often ask to see an AIP to show that you are a committed buyer.

  • After speaking to a member of our mortgage team  and providing the necessary information, an AIP can be arranged swiftly.
  • There is no effect on your credit rating even if you are declined lending by a particular lender.
  • Get a clear idea of what properties you can afford to buy.
  • Your AIP is subject to a full mortgage application being submitted. Therefore, the amount that is stated is not fully guaranteed if a change in circumstances or property information change.

An AIP is also known as a Decision in Principle (DIP) or Mortgage in Principle (MIP).

Preparation and research

The first thing to do after initially deciding that a mortgage might be the right route for you is to undertake some research. One of the key difficulties many face is understanding eligibility for certain mortgage products within an industry that is constantly innovating new solutions for prospective home buyers. That’s where we come in.

Knowing what size deposit you have available is the first step. For first-time buyers, this can vary between lenders and what your goals are, but usually it is healthy to have more than 10-15% in order to obtain a good deal. The larger the deposit you have, the better interest rate and terms you will be able to achieve. There are also a number of government schemes that allow you to buy with just a 5% deposit, subject to certain restrictions and conditions.

In order to gauge how much you could borrow, our mortgage calculator can give you a good idea including interest rates that may be charged and how much your monthly payments will be. Find out more about changes to affordability checks required to be done by lenders and brokers.

Guide for First time buyer Mortgages

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Benefits of getting a mortgage through us

Whole of market

Our panel of lenders include both high street institutions and specialist companies that can offer bespoke mortgage products specific to your circumstances.

Looking ahead

We take a long-term view to organising your mortgage, taking into account your future goals to find a solution that works both now and going forward.

Saves you time

By understanding the general criteria of different lenders, we work to focus our search on products that offer the best opportunities for acceptance and are cost-effective.

Independent

As a company, we are privately owned and therefore are not tied to any insurance company. We work for you rather than someone else to find you the best deal.

Aftercare support

We know that a mortgage is a large commitment and continue to remain in contact with you to ensure your selected product remains suitable over the term of the loan.

Saves you money

Some of our lenders only accept applications from advised clients, but can offer market leading rates. This can result in a considerable saving over the term of the loan.

Some things to consider

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Frequently asked questions

How much can I borrow for a mortgage?

The general rule of thumb commonly used is to multiple your annual salary by four to obtain the amount a lender would typically allow you to borrow. However since April 2014, stricter lending criteria came into force making application assessment more focused on affordability. Therefore this method can still provide some insight, it should not be relied upon with some lenders.

How do I find out my credit rating?

Credit scores are determined by a number of rating agencies that gather and evaluate data from many different sources. Lenders use these values as an important measure of assessing the risk of any applicant. Companies including Noddle, Experian and Clearscore allow you to check your score free of charge.

Which mortgage type should I apply for?

This is dependant on a wide variety of factors including how much you plan to borrow, over what period and your future plans. Speaking an an experienced mortgage broker will allow you to benefit from their experience and outline the options available that best suit your needs.

Can arrangement fees be added to a mortgage?

This is an option that many lenders offer and reduces the need for your deposit to be eaten up by fees when applying. Even though this is commonly available, it is important to realise that this means the true cost of any arrangement fee included will increase if paid over the mortgage term.

What is the Help to Buy scheme?

This government scheme has been introduced to encourage home ownership among first time buyers in the UK today. It makes it possible for applicants to buy a property with a 5% deposit, with the government providing a loan of 20% of the property value. This means a 75% LTV can be achieved meaning lenders will be more willing to lend on this basis, and at better rates.

Why is an Agreement in Principle needed?

It is generally advisable to obtain this document in order to gauge how much a particular lender is likely to lend based on your circumstances at the time of applying. It also demonstrates to estate agents that you are a serious buyer who has proactively taken the right steps to start the process of property purchase.

Visit our Knowledge Centre

If you have a question, visit our FAQs section. If you cannot find what you are looking for, contact our team for more information.

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First Time Buyer insights

Discover your options

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