First time buyers
Mortgages for first time buyers
First time buyers
Buying a home is one of, if not the biggest financial commitment most people will make in their lifetimes. So, it’s no wonder that first time buyers can feel daunted and confused when starting out their journey of purchasing their first home. Not only do you have the pressure of finding the perfect property, but there is a lot of new terminology and processes to learn on top of this.Here at Pinnacle, we are centred around assisting your journey from start to finish, offering guidance on the house buying process as well as taking care of the entire mortgage application, and remaining on hand to provide assistance through to completion and beyond. We hope the below guide can provide some insight for prospective first-time buyers to gain an understanding of the process as a whole.
How Much Can I Borrow?
For most first-time buyers, it is crucial to determine how much they can borrow before they start to look for properties, to avoid falling in love with a property which may be unaffordable. This can be determined through a simple call with us, in which we will establish various elements of your current circumstances such as your level of income, committed expenditure and debt levels as well as any past or present credit issues. This will enable us to calculate the maximum mortgage which may be available to you.At this point you would have an idea of your budget when factoring in your available deposit, which will enable you to begin your property search. We would advise obtaining an Agreement in Principle certificate at this point as well, which provides confirmation from the relevant lender that they would be happy to lend your desired amount, subject to underwriting.
How much deposit will I require?
This is a question a lot of first-time buyers have, as typically they have less in savings than someone who will have built up a large deposit from a house sale for instance. It is no longer possible to get a standard mortgage without a deposit, and at the very least lenders will require 5% of the property purchase price to be put down as a deposit. The more deposit you can put down, the better the mortgage rates you can access will be, resulting in your repayments consisting of less interest. There are government schemes such as the Help to Buy equity loan, and Shared Ownership, which are designed to assist time buyers who have a 5% deposit to maximise their borrowing and purchase a house they may otherwise not have been able to afford.
What do I do once I find a property?
Once a suitable property is found, we understand this is when things get most exciting but also daunting. It can be hard to know what the next steps are, which is why we remain on hand the whole way through for any questions you may have, as well as doing all the hard work for you. At this point we’ll be in a position to submit your full mortgage application, once we have ticked the relevant boxes such as compiling your documents, selecting the best mortgage arrangement and liaising with a solicitor firm. The solicitor firm also forms an integral part of the process, which we can also offer guidance on with instructing a suitable firm and providing updates as they progress your case. We will keep in close contact with yourself the whole way through, ensuring to liaise with the lender and solicitor for updates to track your case through to completion.
What other costs are involved?
It’s no secret that getting a mortgage can be a costly financial commitment. Alongside the large sum of a deposit, it’s important to consider other costs you may need to set aside funds for. One that time buyers tend to worry about is stamp duty, however if you are purchasing a property under £500,000 then you will be exempt from stamp duty on the first £300,000 of the purchase price. As mentioned earlier, you will need to instruct a solicitor firm to carry out the relevant legal processes, who typically charge for their own costs, as well as the cost of Land Registry fees and searches. There are often also lender fees involved, such as arrangement fees. This is a cost which can be added to your mortage loan however, to avoid having to pay the fee up front. Some lenders also charge a valuation fee, or you may wish to arrange your own homebuyers survey.
