First Time Buyer Mortgage
Logo: Home Counties Mortgage ServicesBuying a house for the very first time is an exciting prospect as you make your start on the road to home ownership. The good news is that Mortgage lenders are extremely keen on first time buyer business, resulting in a huge number of mortgage schemes that are widely available. Our job at Home Counties is to try and help make the mortgage process as simple as possible and help you get the best first time buyer mortgage deal.
Finding the right home is important but so too is the affordability of your new loan. If you are thinking about buying a property in the near future we suggest you telephone our offices and request a visit from an adviser.
They can discuss the different mortgage schemes that are available and what level of borrowing you can go to. We will then obtain an agreement in principle from one of our lenders which would then allow you with a degree of confidence to go and find your property.
Most lenders will offer you a slightly better interest rate if you have a 5% deposit saved but 100% loans can still be sourced if not. You should also be aware that there are a number of other costs associated with the purchase that you will need to budget for. These include:
STAMP DUTY: This is a tax that applies to the purchase of all property over £125,000. If you are buying between £125,000 and £250,000 you will be charged 1% of the purchase price. For properties between £250,000 and £500,000 you will be charged 3% of the purchase price.Stamp Duty for properties over £500,000 amounts to 4% of the purchase price.
HIGHER LENDING CHARGE: This is charged by the lender if you borrow over a certain percentage limit, which is normally 80%. This insurance is classed as additional security for the lender and will protect them in the event of the property being taken into possession and being sold for less than the mortgage debt. The typical cost will vary in line with the purchase price of the property but expect to pay in the region of £1,000 if you were taking out a 95% loan on a purchase price of £150,000. Some lenders will add this premium to your loan whilst a number of lenders do not now charge for this policy. The latter option can obviously represent quite a significant saving and as a matter of course we would normally look closely at these lenders when discussing your mortgage requirements with you.
LENDER FEES: Costs will vary according to the product being taken but expect to budget for both administration and valuation fees. These costs can be confirmed once your lender and product have been decided upon.
SOLICITOR COSTS: Expect to pay in the region of £1,000 based on a property purchase price of £150,000 . This figure will include your solicitors fee as well as local search and the land registry fees. Whilst you will want to try and keep your costs to a minimum do not underestimate the importance of getting a good solicitor who will keep in touch and ensure the transaction goes through smoothly. If you can, get a recommendation from friends or family for someone they know and have used before. When you apply for a mortgage loan, a lender will normally carry out a credit search on you. If you would like to find out more about your current credit rating we would recommend you visit www.myequifax.co.uk who can produce an online report for you. The current cost of a report is £11.75.
To find out more about first time buyer mortgages please call 0870 345 3131 to speak to an adviser.