First Time Buyers Guide
The most important starting point for a first time buyer mortgage is finding out
how much you can borrow. Lending is based on your total income and is usually calculated
using a multiple i.e. 3 ½ times single household income.
Lending calculations for first time buyers differ from lender to lender and we recommend
you seek advice from a professional mortgage adviser. Here at Pink we offer professional
advice from a team of mortgage professionals who can assess your individual circumstances
and find the right mortgage for you. Pink Home Loans offers professional advice
from a team of professional mortgage advisers who can help you make the right decisions.
Getting Started
What kind of mortgage is available to me?
A mortgage for first time buyers is available in 2 basic types, capital repayment
and interest only. With a capital and repayment mortgage you pay back interest and
an element of the outstanding balance. With an interest only mortgage, you pay back
the interest element only over the term of the mortgage and then repay the amount
borrowed in full at the end of the term by way of an associated investment policy.
We do not advise on investment products.
Always seek advice from a professional mortgage adviser who can help you chose the
right mortgage type.
What choice of mortgage products are available to me?
They are available as fixed rate, discounted, tracker and flexible deals with differing
options to suit your needs. Early Repayment Charges may apply to these schemes.
What fees are involved?
As with any residential mortgage transaction there are a number of fees that you
will need to budget for. An up front valuation fee will be required, the cost will
vary according to the estimated value of the property and it's location.
Some lenders will require arrangement and rate reservation fees, either to be paid
up front or in some circumstances be added to the mortgage advance.
You will also need to consider solicitor's costs, buildings insurance, stamp duty
fees and any service charges that will apply if the property is a flat.
What if I need help getting on the property ladder?
In today's market it is especially difficult for first time buyer to 'get their
foot on the ladder' and buy their first home. There are a number of schemes available
which are designed to help people in this situation: -
Shared Home Ownership (SHO) schemes allow borrowers to
buy a part of the property and rent the remaining share from the housing authority.
This allows you to budget and perhaps save to purchase the whole of the property
at a later date.
Key Workers Living Schemes - these schemes (which are
run by the local authority) offer assistance with first time buyer house purchases
for key worker in health and education roles. To see if a scheme exists in your
area you should contact the relevant local authority.
Guarantor mortgages - There are several options with this
type of mortgage but basically the parents agree to take responsibility for all
or part of the mortgage loan should you be unable to make the mortgage payments.
This offers additional security to the mortgage lender and can be a way to obtain
your first mortgage.