It’s not unusual as a first time buyer to be feeling out of your depth and overwhelmed by all of the new found complexities involved with buying a home. It’s OK to feel scared and clueless. Our job is to reassure and support you every step of the way.
The first thing worth noting is that each individual circumstance is different. Therefore, the amount you can borrow for first time buyer mortgages will vary dependent on a range of different factors. All mortgage lenders will assess you against their own criteria to determine how much they are willing to lend you. To do this they will scrutinise your finances, in terms of incomings and outgoings and work out what size of a mortgage you could afford to borrow. Other aspects such as the size of your deposit are also an influential factor.
Although there are government initiatives encouraging first time buyers to take on a new-build properties, with schemes like Help to Buy, mortgage lenders actually prefer you to opt for older buildings. This is largely because new builds can be harder to resell and tend to stay occupied. They also do not rise in value as rapidly.
Usually, this is down to the deal you negotiate at the time of going through your first time buyer mortgage application. Again, depending on the size of your deposit and the repayment options you select, the length of your mortgage term will vary. Your age can also have an impact upon the length of your terms because lenders will expect you to have cleared your mortgage by the time you retire at around 70. The majority of mortgage lenders will allow mortgage terms of around 35 years. To extend this, you will need to evidence sufficient income or finances to be able to continue the repayments. To shorten it, the same sort of evidence of finances will be expected, to show that you can pay of the term in a shorter time frame.
Depending on the type of mortgage you are applying for, the value of your property and the mortgage provider, your credit score may affect your application in different ways. This is why It’s always worth doing a credit check on yourself before you begin the process. You can use sites such as Experian for this. If you have a previous history of missed or late payments you may well have been rejected, in the past. However, if some of these have been ‘satisfied’ or are old, your score and circumstances may not be as bad as you assume. Just be aware that every time a credit check is performed, it leaves a footprint which can have a negative impact on your score and put lenders off. To answer the question, there is no real figure which will give you a green or red light, a lot of it is circumstantial. Your score can be affected by a number of scenarios such as CCJs or any other outstanding debts.
You can always compare your deal to other people in a similar situation at a similar time, to see if you are being offered terms along the same lines. However, the fluctuation of the market can often have an impact from one person to the next. It’s a good idea to use a mortgage broker. They have access to a panel of lenders, of whom they have existing relationships with, so can generate the best deals. You could try going direct to a bank or another lender and see what sort of terms they are offering, compared to a broker. The advantages of using a broker is that they are impartial and will search for the best deal for you and your situation.
MortgageKey have been recognised for their excellent support, advice and services surrounding first time buyer mortgages and have a catalogue of happy customers. For a free, no obligation quote, get in touch today!
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Representative Example: Annual Interest rate of 2.44% fixed for 2 Years followed by 3.59% for the remaining term. Representative 3.50% APRC Variable. Based on borrowing of 150,000 over 17 years repayments of £899 per month. Total amount repayable £198,466. Includes Lender Fee of £995 and Broker Fee of £695.