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First Time Buyer Mortgages
The journey towards home ownership can be fraught with stress, but it’s also exciting getting that first rung on the property ladder. Finding a good mortgage is a daunting prospect, not only because of the range of products available, but because it’s a tough environment for first-time buyers at the moment. There are fewer mortgages available as a result of the economic doom and gloom, and lenders have tightened their criteria. That makes it harder for first-time buyers to secure a good deal.
Help for first time buyers
It might be a tough market, but at Mortgage Buzz we can help first-time buyers find the right mortgage, whatever the circumstances. One of the problems for first-timers is the need to find more money for a deposit, now that most lenders have stopped offering 100% mortgages. Since 2007 these 100% deals have all but disappeared from the first-time buyer mortgage market, as high LTV (loan to value) mortgages of 75% and over are costlier, and risker to lenders.
First-timers who can therefore save a bit more or borrow from family to build up a larger deposit can find the best mortgage deals, with lower interest rates.
If you’re on the hunt for your first mortgage don’t despair – there are still plenty of good mortgage deals available for buyers trying to get a leg up onto the property ladder. With no chain to worry about and a slow market, first time buyers should be able to secure a good deal on the property itself, whilst many lenders offer incentives to help with some of the unavoidable costs, such as:-
- Free valuations
- Free surveys
- Free or discounted conveyancing
Types of first-time buyer mortgages
Mortgages can generally be grouped into two categories: variable rate and fixed rate mortgages.
Variable rate mortgages – with a variable-rate mortgage, the interest rate will change over time. The interest rate is usually based on the lender’s standard variable rate (discounted mortgages), or the Bank of England base rate (tracker mortgages). First-time buyers opting for a variable rate mortgage are likely to secure a lower interest rate, but run the risk of larger repayments if the base rate rises. The obvious upside to a variable rate mortgage is that borrowers benefit from any reduction in the base rate or lender’s SVR.
Fixed rate mortgages – a fixed-rate mortgage means the interest rate will stay the same for a set period. The advantage of fixed-rate mortgages, is that they provide certainty about future repayments, making things easier from a budgeting perspective. On the downside, the interest rates on a fixed-rate deal will be higher than variable-rate mortgages.Then there’s the decision about whether to go for a repayment or interest-only mortgage.
Confused? Browse our first time buyer guides for simple, straightforward information about how to go about getting your first mortgage.
First-time buyer mortgage quotes and advice
At Mortgage Buzz we understand how important it is to take advice from qualified advisers before taking the plunge. We can you in touch with an FSA authorised mortgage adviser who’ll compare the best mortgage deals for your circumstances, and provide free, impartial advice.
They also have access to the whole of the mortgage market which means a wide choice of different lenders and deals to choose from.
First-time buyer guides
There’s a lot to get your head around if it’s your first mortgage. Questions like:-
- how much can I borrow?
- what proof of income do I need?
- how does conveyancing work?
- what about stamp duty?
- what about surveys?
- what about home insurance?
- what about mortgage protection insurance?
All of these and more, are likely to be swimming around in the mind of a first time buyer. For simple, straightforward answers, go to our first-time buyer guides
