What Kind of Mortgage is Best For a First-Time Buyer?
Becoming a first-time property buyer is a huge life achievement and one that takes a lot of hard work. After years of saving for your deposit, one of the first things you’ll need to know is how much you can borrow as this will determine which mortgage options you have available.
In this blog, we discuss some of the most common mortgage options for first-time buyers.
What is your mortgage based on?
Everyone’s situation is different, so the mortgage amount that you receive will be entirely based on your personal details. Lenders will consider the size of your deposit, your salary and your credit history to determine how much they are willing to lend you. This part of your buying process is the most important so always remember to shop around to ensure you find the best deal.
If you’ve been saving for a while, then you may have a big enough deposit to access 10% mortgages which means if you’re looking to buy a £250,000 you have £25,000 saved. For many first-time buyers, this is an ideal arrangement, as most 10% mortgages are 25 years and the bigger deposit you have this usually lowers your monthly repayments.
Another option is 5% deposit mortgages - ideal for those who are looking to buy quickly or can only afford a small deposit. This could be a better option for you to get on the property ladder, however, you may need to extend your mortgage duration over 25 years.
Households with income that is less than £80,000 or £90,000 in London may be eligible for shared ownership mortgages. This is a government scheme that allows you to take out a mortgage for the share you own (usually between 25% and 75%) while paying rent on the rest. You also have the option to buy larger shares at a later date.
Need expert help purchasing your first home? At Andrew Lee Property Lawyers , based in Kent, we provide quality property law services to first-time buyers so you understand your options. Our team will help you navigate the property ladder and secure your perfect home. Get in touch with us today for more information.
