Making the decision to own your own home is both a challenging move and a dream for people entering the property market for the first time. As a first time buyer, there are lots of obstacles to overcome when getting a mortgage, from affordability checks through to building a suitable deposit size and rising house prices.
At Mortgage360 in our capacity as first time buyer mortgage advisor, we’ll be with you every step of the way of your home-buying journey, guiding you through the process.
We’ll make sure you know what lenders look for when they’re making credit decisions, and help you understand how potential lenders will assess you. We know the processes and the pitfalls, and we’ll be by your side throughout the journey.
Why do I need a mortgage broker?
First time buyers have most to gain from professional mortgage advice, as your first application for a mortgage is almost always more challenging, and it’s all new to you. Choosing an impartial mortgage advisor is an important step, as they can access a comprehensive range of lenders, which is representative of the whole of the market, rather than a ‘tied’ advisor who will be restricted to certain lenders.
By using an impartial broker, you will have access to unbiased advice to ensure that your needs are prioritised over the lenders’ profits.
Mortgage brokers will understand the different types of first time buyer mortgages available through different lenders. They can search the market on your behalf and find the best deals to suit your individual circumstances. At Mortgage360, we get to know your preferences and help you save time and money, working to ensure that the deal we secure is the best value and the right one for you.
What can Mortgage360 do for me?
We’re dedicated mortgage specialists. We can increase your chances of securing a mortgage, alongside ensuring we find precisely the right deal for you. We’ll take time to explain what the different types of mortgages are to make sure you make the right decisions.
We’ll help you to understand how much you will be able to borrow for a first time buyer mortgage, and help you to prepare for your mortgage application early to optimise your chances of success. We aim to save you money and ensure that the mortgage application is successful.
Once you have found a property you would like to buy, we will help you from start to finish, liaising with estate agents, solicitors, and surveyors as required to make sure the entire process is streamlined and hassle-free for you.
Affordability Calculator
Stamp Duty Calculator
Repayment Calculator
How does the house buying process work?
We always recommend first time buyers get a Mortgage Agreement in Principle first – even before they start looking at houses. This puts you in a prime position when you find your home and already have your finances in place. So we’ll work with you to get the Mortgage Agreement in Principle, and we won’t charge you anything at all for getting you to this point.
Then the steps are as follows:
- Find your new home
- Make an offer and get this agreed
- Finalise your mortgage application
- Instruct a conveyancer (the legal process to transfer property ownership)
- Organise surveys/valuations
- Pay your deposit
- Exchange contracts
- Agree on a completion date
- Complete your purchase
Mortgage360 will help you through every stage of the process.
How does the mortgage application process work?
It’s always best to make sure you’re credit-ready. Lenders will look at your credit rating and financial situation. They will look closely at what you earn and your outgoings to check if you can afford the monthly repayments.
- Pre-Application stage – make sure you are in the right financial position to apply for a mortgage
- Initial Application – get all your documents together for your mortgage appointment to simplify the process.
- Affordability Checks – evidence that you can cover your monthly mortgage repayments alongside other bills and outgoings
- Valuation – usually arranged by your lender, to check the property is suitable security for the mortgage you’ve applied for
- Formal mortgage offer
- Completion
Mortgage Fees for First Time Buyers
Common mortgage costs include product fees, which are the amount you pay for setting up your mortgage deal with your lender. This sum, which will vary from lender to lender, can sometimes be included as part of the total amount borrowed.
You may also pay a valuation fee to cover the cost of valuing the property you’re buying (mortgage valuation) to ensure it represents adequate security for the loan. This is a major investment, and you will almost certainly want to arrange a professional property survey to check on the condition of the property. Typical survey fees range from £300 to £1,500, dependent upon the detail of the survey and value of the property.
You will pay a fee to your advisor or mortgage broker, which will usually be a flat fee. You will also pay the conveyancer who handles the legal transfer of property ownership and all the legal paperwork. The good news on Stamp Duty – if you’re a first time buyer in England and Northern Ireland, you don’t have to pay Stamp Duty on the first £300,000 of a property’s purchase price. You will also pay a Land Registry Fee to change legal ownership of the house to your name on the Land Registry record.
Do Mortgage360 get exclusive rates from mortgage lenders for First Time Buyers?
We know the market, and we’re always aware of mortgage rates, special offers, benefits and the better mortgage deals that are available from time to time. We’re committed to securing the right deal for you. This covers repayment mortgages, interest only mortgages and fixed rate mortgages.
What kind of mortgage deposit does a First Time Buyer need?
Generally speaking, you’ll need a deposit of at least 5% for a mortgage in the UK, with most lenders. So you’ll pay 5% of the property’s value, and your mortgage lender will loan you the remaining 95%. The government’s Mortgage Guarantee Scheme, which helps people with 5% deposits onto the property ladder, has now been extended to June 2025. Under this scheme, the government offers lenders financial guarantees to provide mortgages that cover the other 95%. It is subject to the usual affordability checks regarding monthly payments.
It is possible to find a 100% mortgage as a first time buyer, but this will usually be a different type of product, such as a guarantor mortgage or a family deposit mortgage, requiring support from a family member.
100% mortgages for First Time Buyers
The market is now seeing new products arriving for first time buyers from high street banks in the shape of no deposit mortgages or track record mortgages. This means you initially have no equity and own none of the property’s value. These mortgages are subject to the usual affordability criteria, credit history and credit checks.
As a new product on the market, the offer is expected to develop further over the next year. At Mortgage360, we’re keeping a close eye on how lenders respond to the new challenges to identify the best opportunities for our clients.
How much will a First Time Buyer be able to borrow?
Lenders will usually agree to lend between 4 and 4.5 times your annual salary. Some offer a multiple of 5 to 6 times, subject to overall affordability checks. The important thing is to be confident you can cover your monthly mortgage payments. Loan To Value (LTV) ratio also comes in here. As an example, if you have a £180,000 mortgage on a £200,000 house, your LTV ratio is 90%.
What do I do next?
Just give us a call, drop us an email or complete the form to get the home-buying conversation and the mortgage process going!
FAQ’s
In certain scenarios, you may not need a deposit, but generally, you will need a minimum of 5% deposit. The bigger your deposit, the lower the interest rate will be. For example, a 15% deposit will get you a better interest rate than a 5% deposit.
Mortgage lenders do accept gifted deposits, but often this needs to be gifted by an immediate family member, e.g. parent, grandparent, or sibling. The deposit can be gifted in full, meaning you don’t need to put any of your own savings in. Some lenders even allow non-family gifts.
Your level of borrowing will be determined by several factors, which will include your level of household income, your level of existing financial commitments i.e. personal loans, credit cards, car finance etc, and for what period you wish to borrow the money. Use our Mortgage Calculator to get a rough idea.
If you are employed, you will need to provide your last 3 months’ payslips and sometimes your latest P60.
If you are self-employed, you’ll need your latest 2 years’ Tax Calculations (SA302s) and corresponding Tax Year Overviews. These documents can be obtained from HMRC if you self-assess. If you have an accountant, your accountant should be able to provide you with these documents. In addition, if you have a Limited Company setup, you will require your least 2 years’ accounts. Even if you only have 1 year of trading, it may still be possible to obtain a mortgage. Some lenders may have other requirements too.
You will also be required to provide your latest 3 months’ bank statements.
If you have any other form of income, e.g. universal credits, or disability benefits etc. then evidence from the provider will be required.
