First Time Buyers

Get in touch for a free, no-obligation chat about how we might be able to help you.

What's On This Page?

Get In Touch
1 Step 1
reCaptcha v3
keyboard_arrow_leftPrevious
Nextkeyboard_arrow_right

First Time Buyer Mortgage

Ashleigh Halit talks to us all about the mortgage process for First Time Buyers

What are the typical requirements to apply for a mortgage as a First Time Buyer?

The process is the same for a First Time Buyer as for somebody who’s buying again. But it helps to prepare yourself as much as possible. Get a copy of your credit report, and if you’re employed, collect your last three months’ pay slips.

If you’re self-employed, most lenders want to see at least two years worth of your income. Self-employed people will probably be familiar with the SA302 and corresponding tax overviews. If you’re a sole trader, we would like you to prepare those documents.

If you’re a limited company, we also need your company accounts. Most limited company directors take dividends, so they’d also need the SA302s as well.

These documents can take a bit of time to prepare. For your first meeting with your mortgage broker it would be good to have those to hand. There are also ID requirements which typically include a driving licence or passport and then some proof of address.

I would suggest that you give the broker as much information as possible because it will point them in the right direction around lenders that would potentially fit your criteria.

What is the maximum amount that can be borrowed for a mortgage as a First Time Buyer?

Some lenders will give you 100% of the purchase price, but it does depend on the individual person. Most lenders will run an affordability assessment to decide what you could potentially borrow up to. Some lenders will go up to six times your income – again, dependent on the individual.

There are some great schemes out there as well, which a lot of First Time Buyers ask about. It depends on the deposit that you’ve got, how much you earn and what the lender is prepared to go up to, but some lenders have ‘income booster’ schemes.

If your income is falling a little short and you’ve got a family member that might be able to assist and boost up your income, those schemes could be useful.

The right thing to do is to contact your mortgage broker. We’ll look at your circumstances and do some affordability assessments for you.

What’s the minimum deposit required for a First Time Buyer?

As I mentioned, you can potentially borrow 100%, which means no deposit. You would need to have rented in the previous 12 months to borrow 100%.

But typically speaking, most lenders look for at least a 5% deposit. If you can save more and get a 10% deposit together, it’s usually more beneficial in terms of the interest rates you can access. So the bigger your deposit, the cheaper the rate tends to be.

What are the types of interest rates available on a mortgage for a First Time Buyer?

Interest rates are changing at quite a rapid speed at the moment, because there’s a lot going globally in economics. The rate you pay is linked predominantly to the deposit that you’re putting down.

At the moment in October 2024, we are seeing rates come down. They are in between 4% and 5% and a little higher, depending on the lender and your credit situation. Somebody with impaired credit would pay a little bit more.

Because rates are changing all the time, talk to a broker to get more specific details for your situation.

What are the pros and cons of fixed versus variable interest rate mortgages for First Time Buyers?

Most First Time Buyers are worried about taking on such a big commitment. A lot of people want to budget carefully for their first mortgage. The benefit of a fixed rate is that you know exactly how much you will be paying every month. It’s a really good way for you to budget and make sure you’re not stretching yourself.

You know exactly what is going to be coming out of your bank account and that payment will not change until your product has expired. Typically, you can do a two or five year fixed rate. Some lenders offer three year, 10 year and even lifetime fixed rates.

The benefit of a variable rate or a tracker rate is in situations like we’re seeing at the moment where we’ve seen a big jump in interest rates, but they are now starting to drop. Some people might prefer a tracker rate because they feel that mortgage rates are falling and they want to make the most of that opportunity.

The benefit would be that if the Bank of England base rate drops, on a tracker, your mortgage rate will follow. It also gives you a bit more flexibility, because with most tracker rates you’re not tied into the product.

If you want to make overpayments or come out of the deal, there are no penalties to do that. It could be useful if in the short to medium term you want to upsize your property, as you’re not tied into that particular product. Typically speaking, though, most First Time Buyers go for a fixed rate because it offers them a bit more stability.

What government schemes are available to help First Time Buyers?

There’s a really good scheme, the Deposit Unlock scheme, which is particular to new builds. It’s fantastic because if you have a 5% deposit, the developer also offers you 5%, so you’ve now got a 10% deposit. Some lenders out there will then drastically cut the rate of interest.

So if you’re able to buy a new build and they’re signed up to the Deposit Unlock scheme, essentially you could get rates below 2%. I’ve seen them as low as 1.2%, 1.6% and 1.7%.

A few lenders are now signed up to this scheme and it’s popular with First Time Buyers to get on the property ladder. The First Time Buyer market is intrinsic to a healthy economy, as it allows more people on the ladder and pushes through home movers.

We really want to encourage First Time Buyers to stop renting as it’s just wasted money for them. If you can get on the ladder, it’s a fantastic time to do it with the Deposit Unlock scheme.

What documents do I need to get pre-approved for a mortgage as a First Time Buyer?

Again, most lenders require a minimum level of documentation, and so do most brokers. We need to assess your affordability, go through your bank statements and highlight anything to explore further before we package your deal and send it to the lender.

The initial set of documents are your proof of ID and proof of address, dated within the last two months. Make sure your ID is actually valid – a lot of people don’t realise their passport is out of date or their driving licence has expired.

If you’re employed, get your last three months pay slips, or 13 pay slips if you’re paid weekly. For CIS workers, who are contract workers, it’s usually your last 13 weeks.

Self-employed people need the last two years’ self-assessment tax returns with the corresponding overviews. Limited company directors need those, plus the last two years’ company accounts. Everyone needs a copy of their credit report, as well.

We also need to see your proof of deposit. Having gathered all those documents, your application gets submitted to the lender. Once the underwriter takes a first look at the application, they might ask for additional information depending on your situation.

Speak To an Expert
We know that when it comes to your home and family, only the best will do, which is why we work with market-leading providers to ensure that we always find the best deal for you.

What are the steps to follow when applying for a mortgage as a First Time Buyer?

Your mortgage broker will guide you through these steps. Start by preparing the documents, and be clear about what you’re trying to achieve. The more information you provide the broker with, the better the outcome will be for you. Don’t hold back on anything, because that can impact you in getting a mortgage.

Sometimes we hold information back and not realise how important it is. But we don’t want to submit an application to a lender and find there’s something that you’ve not told us. If the lender goes on to discover it, they may potentially decline your application.

So the more information you give your broker, the better. From there, your mortgage broker will guide you through the rest of the journey.

What are the most common mistakes to avoid when applying for a mortgage as a First Time Buyer?

A common mistake to avoid is not having the right documentation. Another thing is, if you want a mortgage but you’re also planning to buy a car at the same time, it’s right to hold off on any major purchases until you’ve spoken to your mortgage broker. It could impact your affordability to obtain a mortgage.

Another common mistake is just not being clear with your broker, and holding information back that might affect you actually obtaining a mortgage.

What happens if I miss a mortgage payment as a First Time Buyer?

It depends. What’s the reason behind you missing that payment? Did you just not set your direct debits up correctly, or are you struggling financially?

Either way, the first thing to do is reach out to the mortgage lender. Once we’ve actually completed your mortgage, we can’t contact the lender on your behalf unless you give us authority to do so, because of data protection.

A lot of lenders are very understanding when it comes to financial struggles. So explain the situation and they will be able to guide you in the right way. If you are struggling, don’t have that burden on your mind. Talk to someone about it – there’s lots of help and support out there.

Can I qualify for a mortgage as a First Time Buyer with bad credit?

Yes, you can. Don’t let your previous credit profile put you off approaching a mortgage broker. Here at Ashleigh Green we help a lot of people that have had difficulty making payments in the past – people with CCJs, people with defaults, IVAs, debt management plans, even bankruptcies, late or missed payments.

So don’t think that because you’ve been in this situation before, you’re going to be declined for a mortgage. It’s a conversation to have with your broker. We’d want to know how this situation occurred, and then we can then take that information and research the market.

But there are lenders that specialise in helping people who have had credit difficulties in the past.

Can I get a Buy to Let mortgage as a First Time Buyer?

You can get a Buy to Let mortgage as a First Time Buyer. Some lenders do offer this. It’s a smaller pool of lenders, but some high street banks will offer you a mortgage as a First Time Buyer on a Buy to Let property.

Other lenders don’t like this type of transaction, because they’re worried that people who don’t have the income to buy a home are trying to go down the Buy to Let route. As a lot of people know, Buy to Lets are mainly assessed on the rental income.

But equally, a good number of lenders will offer you a Buy to Let mortgage as a First Time Buyer.

How can a mortgage broker help with a First Time Buyer mortgage application?

The First Time Buyer process can be a little overwhelming and stressful. A broker is here to explain all the steps of that process, from your initial meeting to the fact find. We explain the different types of valuation and surveys you can have on your property.

We can also recommend a solicitor. Here at Ashleigh Green Financial Services, we use a conveyancing panel, so we can instruct the solicitor for you, as well. They’ll explain to you the requirements for stamp duty and what to expect in that legal process – for example, the difference between exchanging contracts and completion.

There are a lot of steps to go through as a First Time Buyer, and our role is to take away the worries and put things more simply.

Buying a home is one of the most stressful life events that you’ll ever go through. We want to take that stress away from you – and put it into the hands of people that know what they’re doing and can get you through this process pain-free.

YOUR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.

The Financial Conduct Authority does not regulate most Buy to Let Mortgages.

What Our Clients Say