Purchase (First Time Buyers)
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What is a First Time Buyer?
Do you still live at home? Have never had a mortgage? Or are you privately renting or living in social housing? If you answered ‘Yes’, then we can help you. In fact, if you haven’t had a mortgage for 3 years, we can also help you too, as some lenders may consider you a First Time Buyer.
Terms. Loan to Value (LTV) and Fixed and Variable rates. Your First Time Mortgage may seem complicated but it needn’t be with our help. Let us translate the technical talk so you can decide what you need before you call us.
What do we mean by mortgage?
Simply speaking, a mortgage is a loan to buy a property. It’s a loan that can typically last between 25 – 30 years (although 40-year mortgages are available) depending on your circumstances. And it’s a loan ‘secured’ against the value of the property…so if you fail to repay your monthly payments your home may be repossessed.
How much you can borrow will depend on your income, your outgoings and what you can afford to pay back to your lender each month.
For First Time Buyers there are many different types of ‘repayment’ mortgages on the market. A repayment mortgage means that as long as you make your payments each month, you’ll have repaid your mortgage at the end of your term and will own your home.
Now let’s consider rates. It’s not just the percentage rate you need to think about, it’s also the Loan to Value (LTV). This is simply the ratio of equity you own in the property. For example, if you have a 5% deposit the LTV will be 95%, 10% deposit would be 90% LTV and so on.
You could choose from a Fixed Rate, Variable Rate, Base Rate Tracker or Offset Mortgage.
Mortgage types explained
Base Rate Tracker
This is when your monthly mortgage payments stay the same amount for a fixed period of time.
The interest you pay on your mortgage each month is tracked against the Bank of England Base Rate (BBR) for an agreed amount of time. This means that your mortgage payments could go up or down each month in line with interest rates.
Similar to a Base Rate Tracker, with a variable rate mortgage your monthly payment amount could vary. This isn’t because of Base Rate, it will be determined by your lender as agreed in your terms and conditions.
Link your Offset savings account to your mortgage with specialist Offset lenders. With an Offset mortgage you’ll only pay interest on the difference between your savings and mortgage balance. So, the more you have saved the less mortgage interest you’ll potentially pay.
Although few lenders offer these, it’s important to understand what they are. Interest-only mortgages mean you only repay the interest on your loan each month. And then, at the end of your mortgage term, you repay the total capital that you’ve borrowed.
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Can not thank Steve enough for his services and advice! I thought I knew what I was doing but then Steve found a way of saving even more money! thanks for all your help see you in 5 years!
Excellent, professional, helpful and friendly service. We had 3 mortgages to sort, many complications, one being our age. I took a lot of Marc’s time, but Marc and his team sorted it all for us. It’s down to them that we move into our new home in a few weeks. Wouldn’t dream of going anywhere else!!
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