Buying a property is one of the biggest purchases you will make in your life. It can also be one of the most stressful times, with so many different factors to take into consideration. Thankfully FirstXtra are here to help! We have an expert team on hand who know everything there is to know about first-time buyer mortgages in the UK and we’re always happy to answer any questions or concerns you may have, even if you haven’t started saving yet. So why not give us a call today? And, in this piece, we’ll do our best to answer the most frequently asked questions from first time buyers. 

What is the difference between a fixed rate and a variable/tracker rate mortgage?

Fixed mortgages are easier to understand, you secure a rate for a period of time which is generally 2 -5 years and have the same monthly payment for that period of time and generally offer a lower rate of interest. Variable or tracker rates, on the other hand, change according to market conditions so you can’t be sure what your monthly repayments will be until they’re set at the start of each month, these can run in line with the Bank of England base rate or can be set by the Bank or Building society.

How are first-time buyer mortgages different?

First-time buyer mortgages aren’t really different to any other mortgage, just that the lender is willing to accept a buyer who has a lower deposit and no track record of paying into one before. You can get a mortgage with as little as a 5% deposit and there are various other special schemes that lenders have as well. Some lenders have reduced fees or cashback elements that can help towards the other fees that you will incur.

How does an Agreement in Principle differ from a mortgage offer?

An agreement in principle is a credit scored decision from the chosen lender, this gives you the confidence to be able to go out an offer on a property through an estate agent knowing that if your offer is accepted you are ready to proceed to the next steps. You’ll still need to go through with the full mortgage application and at this stage you will need to provide specific property details along with the estate agents and solicitors you will be working with. All mortgages can seem complicated; it pays to have someone on your side who understands all the ins and outs of not only first buyer mortgages but everything mortgage-related to help you on your journey into your first home.

Which type of first-time buyer mortgage is best for me?

This largely depends on your income, life situation, value of the property and the cost of the mortgage vs. your income. Interest rates can also be a factor but the best thing to do is to speak to a mortgage expert, like FirstXtra to let us help guide you — mortgages can seem like a minefield but they needn’t be. 

What deposit is needed for a first-time buyer mortgage?

The government is currently backing many 95% mortgages with the lenders which means you will need at least a minimum of a 5% deposit. This means if you are seeking to buy a property for £200,000 you will need at least £10,000 as a deposit on your home (bear in mind you need to factor in other costs such as solicitors fees, moving costs etc). 

Can a broker help to find a first-time buyer mortgage?

Of course and we would 100% recommend that you do use a broker, you may think we’re biased but we constantly scour the market to find the best deals available and have access to a fully comprehensive list of lenders to help guid you through the mortgage maze and we are committed to making sure you receive the best advice now and for the future. 

When should I apply for a first time buyer mortgage?

We would always suggest you get an agreement in principle from a lender before you start your property search so as you understand what your budget is and what you can afford on a monthly basis (a broker like FirstXtra can arrange this for you).

How to prepare for your mortgage application 

Generally, you will need Proof of ID and address, at least three months banks statements — this should be for you and your partner if you are applying for a joint mortgage. Payslips, again three months should usually suffice but we may need more if you have overtime, bonus or commissions. If you are self-employed (as more and more people tend to be nowadays), you will require your last 3 years SA302’s – and, generally a minimum of 1 years of self-employment but the more years the better!

The information contained within was correct at the time of publication but is subject to change.

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