Becoming a first time buyer

Rising house prices in recent years have caught the news headlines but there are still plenty of great deals out there for first time buyers. The first small step can seem the hardest but with the right guidance the house of your dreams could be yours sooner than you think. The best mortgage rates are for those able to pay larger deposits but if you can raise just 5% you can get your foot on the first rung of the property ladder.

Your first big decision as a first time buyer is whether to save up to pay a larger deposit and get access to the better mortgage rates or go for broke now with a 95% mortgage. In theory saving up first makes sense but as house prices keep outstripping savings rates and wage inflation you may find yourself running in circles.

The second big decision is whether you opt for a fixed or a variable rate mortgage deal. A fixed rate – typically lasting between two to five years, is usually slightly higher than the variable option but guarantees you no nasty surprises for the agreed term. You’ll also have to pay an early repayment charge if you switch to a different mortgage before your time is up. A variable rate mortgage can be linked to the Bank of England’s base rate (called a tracker mortgage) or alternatively you can get what is called a discount mortgage, and is linked to the lender’s standard rate.

The Government’s Help to Buy scheme has recently been discontinued. Previously it allowed you to make your first property purchase – provided it was worth no more than £600,000 – with a deposit of at least 5%. In return the Government guaranteed up to an additional 15% of the property price. If you were hoping to apply and are now left feeling confused about the changes and where this leaves you, please call us today to go over your options.

Speak to an advisor

Why not arrange an informal chat with one of our advisors today?

Our qualified independent advisors can give you a call or pay a home visit to discuss your mortgage or protection needs.

First Time Buyer?

Lenders check your financial income and outgoings and consider your credit score before coming to a final figure. They will also factor in your credit card usage, whether you have any outstanding loan agreements (including student debt), child care costs and more besides.

Lenders are concerned about the effects of possible rate increases in the future, so they expect you to have a cushion in place to ensure you’re not on the edge of your finances. This means many lenders will assess your ability to pay based on a rate that’s actually higher than the one being offered.

There are two main products available; variable trackers and fixed rates. Typically most first time buyers prefer 2 to 5 year fixed rates as they like to know their payments are going to remain the same for that period. It’s important you seek professional advice from a qualified advisor to choose the right option for your circumstances.

It’s important to remember your home could be repossessed if you do not keep up repayments on your mortgage.

Testimonials

Woodhall made the whole process so easy; no hassle, no stress and most importantly they didn't pressure you in to anything. Chris and Luke really have your best interests at heart, ensuring you have all the information you require as well as the best deals. It also helped that they were readily contactable at all times,

Mr J Taylor