Getting A First Time Buyer Contractor Mortgage
Everything you should know about getting a First Time Buyer Contractor Mortgage.
We’ve put together an in-depth guide that explains everything you need to know to get started on a first-time home buyer mortgage.
When you have saved enough to make a mortgage deposit, you may be wondering what the next step is. It is important to note that there are specialty mortgages that are only available to first-time buyers. However, you can apply for any mortgage you want. You want as long as you meet certain criteria.
How do mortgages work for first-time home buyers?
Buying your first home can be a very exciting time, but it also makes many of us feel a little lost. That is understandable because there is a lot to prepare. Plus, buying a home is going to be the biggest purchase of our lives, so it’s worth spending some time learning how it all works.
⦁ Save for a Down Payment
⦁ Talk to an Advisor to See If You Are Eligible
⦁ Set a Budget with Your Advisor
⦁ Make a Decision in Advance
It’s important to budget with an advisor first and to see if you are eligible for a mortgage. You will then receive a decision of principle that describes the amount that you can borrow. With this document, you can start your property search without hesitation.
You also have a budget to work with, which is important. Once you’ve found a property, your lender will conduct a mortgage survey before officially offering you a mortgage. Then just leave it to your attorney who will make sure all parts of your purchase are carried out.
First Time Buyer Mortgage Deposit
To obtain a first-time home mortgage, you need a deposit. 100% mortgages are virtually extinguished unless you use a surety or a preferential purchase. Some lenders accept a down payment of 5, but it is likely part of a government mortgage program.
lenders generally offer preferential rates to those with higher deposits. The best interest rates appear on deposits of 25 or more, which of course means your mortgage payments will be much lower than on a deposit of 5.
It pays to save as much as you can for a deposit as it has tremendous benefits. If you have a small deposit, check out our article on low deposit mortgages here.
First Time Home Mortgage Application
Once you have a first-time mortgage application, it’s time to get started. Talk to a mortgage advisor who can help you more.
Experienced mortgage advisors are worth their weight in gold and can save you a lot of money. Some advisors may also have access to exclusive offers that commercial banks simply cannot offer.
What is a Mortgage Survey?
When you have accepted an offer for a property, notify your mortgage broker, who will then formally apply for a mortgage you are satisfied with. Then an inspector appointed by your lender will conduct a mortgage survey.
The reason your lender is organizing a survey is that they want to make sure they are borrowing the right amount on a suitable property.
You can also hire your independent appraiser if you feel you need more security to know that you are not buying a property with hidden defects.
When will I receive my mortgage offer?
Once your lender is satisfied with the survey and your financial assessment, they will make you a formal mortgage offer. The next step is to hire your lawyers to represent you legally on the purchase.
Should I get a mortgage as a first-time buyer?
Getting on the property ladder is highly recommended. Whether getting a mortgage as a first-time buyer is viable will entirely depend on the individual. We’d highly recommend you seek expert financial advice before applying for a CIS mortgage.
Mortgage Interest for First Time Buyers
There are two types of mortgage: a fixed-rate mortgage or a follow-up mortgage (adjustable rate). After the initial term has expired, mortgages usually have variable interest rates again.
How Much Can a First-Time Buyer Borrow?
Lenders consider many factors when evaluating the loan amount for a first-time buyer. Since every lender has different criteria, it is helpful to have a mortgage advisor connect you with the exact lender that suits your needs.
Annual Gross Salary
Traditionally, lenders calculate the amount first-time buyers can borrow by multiplying the applicant’s gross annual salary.
lenders do this by lending out three to five times the gross annual salary of the borrower. This is only used as part of the lender’s qualification criteria as they will also evaluate your debts and expenses.
- Affordability
Lenders now focus more on affordability. Lenders assess affordability based on their income and expenditures. The reason lenders use this approach is because someone has an annual salary of £ 50,000 but expenses over £ 40,000. 30,000 but they spend £ 10,000 a year.
- Credit Score
Lenders perform credit checks when you apply for a mortgage. This is because your credit report shows whether you have been responsible for its credit history in the past.
A strong credit rating can give confidence to lenders because you are clearly in control of your finances. Bad credit does the opposite, but some specialized lenders can still lend you if you have bad credit.
How much does a mortgage cost for the first-time buyer?
It is important to understand that there are fees associated with buying a property, so you will need more than just your security deposit.
The last thing you want is to put all your eggs in one basket only to find out there are extra fees that you don’t have money for.
- Mortgage Fees
Some lenders charge mortgage fees in addition to the mortgage themselves. This can take the form of a setup fee or a reservation fee. Other lenders may charge additional services such as mortgage collection. it will also charge a fee for its service.
- Legal Fees
When buying a property, you don’t just need a mortgage. Anyone who buys a property always needs a lawyer or freight forwarder who handles the transfer of the documents from the seller (property seller) to the buyer with due diligence on the purchase.
How an expert mortgage advisor can help the first-time buyer?
Mortgage Advisor helps many first-time buyers get their first mortgage. Plus, an advisor can clear up any confusion and make sure you get the perfect mortgage that suits you.
Got a question we haven’t answered? Get in touch and we’ll answer it and likely add it to this article to help others!
Useful Links
- Self Employed Mortgages
- Private Medical Insurance
- First Time Buyers
- Teacher Mortgages
- Buy To Let
- Remortgages
- Joint Borrower Sole Proprietor
- New Forest Mortgages
- Land Mortgages
- Barn Conversion Mortgage
- CIS Mortgage
- Student Mortgage
- Professional Mortgage
- Fixed Term Contract Mortgage
- Million Pound Mortgage
- Minimum Credit Score for Mortgage
- Equity Release
- Maintenance Mortgage
- Mortgages on Benefits
- Retirement interest only
- Pensioner interest only
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