First Time Buyer Mortgages
Buying your first home is an exciting time but it can also be overwhelming. We’ll help you to navigate through the whole process step-by-step, providing comprehensive advice about taking a mortgage and buying a property. We’ll guide you through the market, outline the steps you should take and make sure you understand the costs. Whatever your plans and timescale, we will be by your side, every step of the way, to support you.
Who We Are
Robin Mortgage Design are a whole of market mortgage & protection brokerage. Mortgage brokers who are whole of market have access to the largest pool of mortgage providers such as banks, building societies and pure mortgage lenders. When you choose us, you’ll be treated as an individual from the very start. We’ll take the time to understand your situation and propose suitable options for your mortgage & protection needs.
On this page, we’ll share information to help you as First-Time Buyers understand how you could get a mortgage and what you can do to prepare for your application. If you’d like to speak with an actual human at any point, then we can get you in touch with your personal mortgage consultant who will be on hand to guide you through every stage of your journey.
What is a mortgage?
A mortgage is a loan secured against a property, usually for a term of between 5 & 40 years. You’ll have to pay back the loan with the most common type of repayment for first time buyers being a capital and interest mortgage. This is where you make monthly payments which decrease the overall borrowing as well as paying the interest, to make sure the mortgage is paid off at the end of the term. You're charged interest for having a mortgage, so seeking advice from a qualified professional can help you make sure you have the most suitable product for your requirements.
Who is a first time buyer?
A first time buyer is someone who has never owned a property. If you've ever been named on a property or owned a property in the past then you will not be a first time buyer. Some lenders have different criteria for who classifies as a first time buyer, for example not owning a property for 3 years. Although this doesn't legally make you a first time buyer, it can mean that you might be entitled to an exclusive deal by that lender. If you're in any doubt about your status, speak to a professional mortgage consultant and a solicitor.
How much deposit do I need?
This is a great question as the size of your deposit makes a big difference on your choice of mortgage providers.
At the start of 2020, there were plenty of options for people with deposits of all sizes from 5% to 50%, but now the options are more limited. The good news is, as a first time buyer, options are still available. If you only have a 5% deposit you can still buy a property with access to the Help to Buy & Shared Ownership schemes and there are lenders offering family assist products, which are fantastic options for those with 5% deposits or no deposits at all.
If you're not sure what options are available, it’s always best to seek advice from a whole of market mortgage broker.
How much does a mortgage cost?
This is a question we’re often asked! The cost of a mortgage can be explained in a variety of ways but here are some things to consider.
The term of the mortgage: Your mortgage term can be between 5 and 40 years, the longer the mortgage term, the lower your payments become, but the more interest you'll pay. So, taking a longer term can actually cost you more over the term of the mortgage.
The fees of the mortgage product: Some mortgage products come with fees and these can range from £0 to in excess of £2,000 for setting up and redeeming the mortgage.
Associated fees: These include valuations, legal work and broker fees etc. all of which should be taken into account when applying for your mortgage. These can again be in excess of £1000.
I have adverse credit can I still get a mortgage?
If you have adverse credit, there could still be options, but this really does depend on your credit history. The best thing you can do is to seek advice from a mortgage adviser and gain access to your credit report. Your dedicated adviser will then be able to let you know your options and when you'll be able to get a mortgage. There are specialist lenders that can help in certain cases, but there are no guarantees.
Here are some of the considerations if you've got a tainted credit history:
Bankruptcy and Individual Voluntary Agreements (IVAs) are widely acceptable once they’ve been discharged for 3 years. If you have a larger deposit to put towards a property, then other options may be available if they were discharged more recently than 3 years.
Debt management plans are widely accepted as long as they’ve been in place for 12 months or more and you’ve conducted the account excellently.
Defaults and CCJs are widely accepted, however there are many different solutions and options here. So even if you have something outstanding, lenders are willing to take a look.
Missed payments are widely accepted but it does depend on what the missed payments were for, the reason for the missed payments, how many payments have been missed and how long ago they were. Typically, lenders prefer your payments to be no more than two months behind without needing to look at more specialist mortgage products.
Payday Loans are widely accepted if they were paid off over 12 months ago. They can be frowned upon when applying for a mortgage as they are considered a last resort option for borrowing. In all cases, the lender would need to understand why the loan was taken out.
Whatever situation you’re in when it comes to bad credit, it’s always best to get advice from a mortgage advisor, ideally someone who is able to review all your options by searching the whole market.
What is Help to Buy and how can this help me?
The Help to Buy Equity Loan and Shared Ownership options are the two main schemes that are currently supported by the government. They can appear confusing but that is where we can help. We're really knowledgeable about the schemes and can help you to understand what they mean. Sometimes, it’s easy to believe they are the best or only option available, or to think they may not be for you, so we’ll provide you with the factual information you need to decide if one of these options could help you buy your first, last or dream home.
Help to Buy Shared Equity Loan
These loans help you to buy a new build property with as little as a 5% deposit. The Government top up your deposit with an additional loan to the value of up to 20% (or 40% in London) of the property’s value market value. This loan is not free and after 5 years you will start to pay it back at a specified rate of interest. It is important to remember that the loan is a percentage loan, so if the value of your property goes up or down, so will the value of the loan.
With the new rules, these loans will only be available to first time buyers and the value of the property if affected by its location in the country.
Help to Buy Shared Ownership
This scheme helps you to buy a share of a new or old property. You will normally buy a share of between 25% and 75% of the overall value.
You will then pay the mortgage for your share of the property and pay rent for the remainder, which will also include service charges.
5 things to consider when looking at shared ownership
What is your monthly budget for property associated costs?
You may still be responsible for the upkeep of the property
You are not guaranteed to be accepted
You must not own or be party to any other property
Can you buy additional shares in the property? (staircasing)