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Helping first time buyers get on the property ladder
From a mortgage lender's perspective, if you currently don’t own a property, or if you're on a joint application and both of you don’t currently own a property, most lenders will recognise you as a first-time buyer.
From a stamp duty perspective, if you have never owned a property, or if you’re on a joint application and both you have never owned a property, then you will be classed as a first-time buyer.
On 22 November 2017, it was announced that first-time buyers who purchase a property for £300,000 or less would have no stamp duty to pay. In London, a first-time buyer purchasing a property for up to £500,000 would have no stamp duty to pay on the first £300,000 - saving them up to £5,000.
In practice, most of the mortgage rates are the same for first-time buyers as someone moving up the property ladder with a new purchase. There are some products designed to be attractive to first-time buyers, such as products that require only a 5% deposit for people who don’t have lots of savings, or that offer cash back on completion. It is important to weigh up the benefits of these against the overall cost of the mortgage.
The process for applying for your first mortgage is exactly the same as applying for any other mortgage.
The first thing you need to do is to find the most suitable mortgage product for your circumstances. This can be quite tricky if you don’t know where to find a comparison of the 1000’s of mortgage deals available. Even if you have found the cheapest product you might not be eligible. Every lender has their own criteria for assessing applications.
A whole of market mortgage broker can source the entire range of mortgages available in the market. They can also ensure you meet the criteria of a lender by assessing your circumstances first. This can save a lot of wasted time and money.
At Bennison Brown we offer a free FTB review service. This gives you the following:
Every lender has a different criteria but there are the main factors taken into account:
Lenders will calculate what your payments could cost in the future by using stressed interest rate, this will help them see if you can afford the mortgage if interest rates rise in the future. Each lender has a different approach to calculating affordability and the amount you can borrow will vary from lender to lender.
It’s important and you can typically borrow 4.5 times your sole/joint income although there are lenders that will go beyond this amount for certain applications. This is subject to also passing an affordability test. However this will depend on personal circumstances and you will need to meet a lenders affordability test.
The professional support you need beyond a mortgage broker:
Bennison Brown can point you in right direction of other professionals we work with that you can trust.
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Buying your first home is a major step and it is vital you are able to consult with professionals you can trust. Trying to do it by yourself could cost you a lot of time and money. Bennison Brown offer a free service to help you avoid pitfalls. We do this as we want to help people and we also want to build trust with you so you consider using us should you go ahead with a full application.
A mortgage broker does not need to be expensive assuming you negotiate a good deal. A broker also gets paid by the lender so there should be no reason not to get advice. At Bennison Brown, we charge a £100 application fee, which is payable once we are ready to submit your mortgage application for you. Our broker fee is £480 and is only payable once we have secured you a formal mortgage offer. We try to keep this as low as possible whilst maintaining the reputation we’ve developed for offering a 5-star service.