First Time Buyer Mortgage

1. Assess Your Financial Situation

• Budget and Savings: Start by assessing your finances. Determine how much you can afford to spend on a property and calculate your budget, taking into account your income, monthly expenses, and savings for a deposit.

• Credit Score: Check your credit score, as it plays a significant role in mortgage approval and interest rates. A poor credit score can result in higher interest rates or rejection, so work on improving it if needed

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2. Determine Your Budget and Deposit

• Deposit: Decide how much you can afford to put down as a deposit. Most first-time buyers aim for a deposit of 5-10% of the property's purchase price. A larger deposit can lead to better mortgage deals.

• Budget: Based on your deposit and financial situation, establish a budget for your home purchase, including estimated monthly mortgage payments. To do this, try using our mortgage payment calculator.

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3. Explore Mortgage Types

• There are various mortgage types to choose from, each with its pros and cons:

  • Fixed-rate mortgages: These mortgages offer a stable interest rate for a set period, usually 2-10 years, providing predictability for your monthly repayments.

  • Tracker mortgages: Linked to the Bank of England's base rate, these mortgages move up or down accordingly.

  • Standard variable rate (SVR) mortgages: This is the default rate after your fixed or tracker rate period ends.

  • Offset mortgages: Link your mortgage to your savings account, reducing interest paid.

  • More information can be found in our which type of mortgage is right for me guide

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4. Mortgage Application

• Affordability Assessment: Lenders assess your ability to make mortgage repayments based on factors like income, expenses, savings, and credit history. Our guide on how mortgage lenders assess affordability may help here.

• Credit Checks: Lenders perform credit checks to evaluate your creditworthiness. A good credit score can lead to better mortgage deals.

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5. Expert Mortgage Advisers

• Navigating the mortgage process as a first-time buyer can be daunting. That's where expert mortgage advisers come in. They provide independent advice and help you find the best deals tailored to your circumstances. While there may be a fee for mortgage advice, their expertise can save you money in the long run. Check out our top 5 reasons to use a mortgage broker.

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6. Property Search

• Begin your search for a suitable property within your budget. Consider factors like location, size, amenities, and future growth potential. Check out our top tips for buying a property.

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7. Make an Offer

• Once you find a property you like, make an offer to the seller. If the offer is accepted, you'll move on to the next steps. Have a look at our guide on how to negotiate the price of a house if you need some more help here.

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8. Property Valuation

• The lender typically arranges a property valuation to ensure the property's value aligns with the purchase price. This step protects both you and the lender. You may also want to look at one of the different types of property survey of your own at this point.

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9. Mortgage Offer

• If your mortgage application is approved, the lender will issue a formal mortgage offer. This document outlines the loan amount, interest rate, and any conditions you must meet.

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10. Conveyancing

• Appoint a solicitor or conveyancer to handle the legal aspects of the property purchase, including searches, contracts, and property transfer. A mortgage broker can do this for you if you want their assistance. You can read through the conveyancing process and what searches are in our blog

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11. Exchange Contracts

• Once all legal matters are settled, you'll exchange contracts with the seller. This is a legally binding agreement to purchase the property.

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12. Completion

• On the agreed-upon completion date, your solicitor will transfer funds to the seller, and you'll receive the keys to your new home.

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13. Moving In

• Finally, you can move into your new home and begin your exciting journey as a homeowner.

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14. Protecting Your Investment

• When you become a homeowner, it's crucial to protect your investment:

  • Buildings Insurance: Lenders require this to cover repair costs from unexpected events like fire or flooding, protecting both your assets and theirs.

  • Contents Insurance: Safeguard your belongings within the property.

  • Life Insurance: Ensure your loved ones can cover the mortgage if something happens to you.

  • Critical Illness Cover: Provides financial support if you're unable to work due to illness.

  • Income Protection for Mortgage Repayments: Offers peace of mind in case of income loss.

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Remember that the mortgage process may vary slightly depending on your location and specific circumstances. Seeking professional advice and guidance throughout the process can help ensure a smooth and successful home purchase.