Buying your first home is an exciting prospect but you can easily feel overwhelmed knowing where to start to get onto the property ladder. There are plenty of options out there to help get you on your way; a Help to Buy ISA, Help to Buy equity loan or a shared ownership mortgage.
There’s a range of Government schemes designed to help first time buyers. Equally, there are thousands of mortgages on the market and they are all theoretically available to first time buyers. Banks and building societies can provide specific deals for first time buyers. They could offer incentives such as cash-back, low fees or a contribution towards your legal costs.
Before you go house hunting, it's a good idea to work out roughly how much you can borrow. There is no point in picking your ideal home only to find that it is beyond your financial reach.
In the past, lenders traditionally calculated the amount you could borrow as a multiple of your salary. So, you might typically be granted a mortgage of three times your gross annual earnings. Most banks and building societies these days advance funds according to affordability and will ask for details of your incomings and outgoings before they decide on a figure. Future interest rate rises are also taken into account.
Your ability to get a mortgage isn't down to your salary and outgoings alone, your credit score is also important.
Gone are the days of 100% mortgages so our advice is to save, save and save some more! Some banks and building societies will lend up to 95% of the property's value - this will be described as the loan to value a.k.a the LTV. Your deposit in this instance will be 5%. You will have a wider choice of lenders the higher your deposit; the very best rates are reserved for borrowers with a big deposit.
For further information and advice contact Mark Gilruth and his team on 01302 244 977. We’re here to help!
As a mortgage is secured against your home, it could be repossessed if you do not keep up the mortgage repayments.
A buy to let mortgage will be secured against your property.
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