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First time home buyers
A Guide to First Time Home Buyers Mortgage

A first time home buyers’ mortgage is a home loan for buyers looking to purchase their very first home or property.

It is also known simply as a first mortgage.

You can qualify for first time home buyer status if

  • you have never bought a property in the past

  • you want to get back onto the property ladder

What types of first time home buyers mortgages are available?

As a first-time buyer, you can apply for all types of mortgages. You can, for example, choose between a repayment mortgage and an interest-only first mortgage. Furthermore, you will probably be offered some of the best fixed, capped, discounted, variable, cash back, and tracker deals in the market as part of your first mortgage.

How do first time home buyers mortgages work?

  • As it is a first mortgage, the industry standards are slightly more generous. To buy their first home, first-time buyers will usually be offered loans varying between 3 to 4 times their own salary or 2.5 to 3 times a joint couple’s salary.

  • It is quite common for first time buyers to take out a 100% mortgage to be able to get on to the property market. There are some lenders who will even allow first-time buyers to borrow up to 125% of the value of their first home to help cover other home buying costs including survey fees, valuation fees, solicitor fees, and more.

  • Like most standard products, first mortgages will require at least a deposit of 5% of the property’s value. If taking out a 100% mortgage, no deposit is required.

What are the benefits of first time home buyers mortgages?

First time buyers are in great demand amongst mortgage lenders as lenders hope you will stay with them for a long time. First time buyers also tend to get offered some of the best deals and special offers, again to encourage them to choose their package over a competitor’s. Some of the more attractive packages offered to first-time home buyers by competing lenders include the following:

  • Getting cash back payments and other rewards

  • Subsidising fees and costs or paying them in full

  • Opportunity to pick and choose all kinds of rate deals and discount offers

With such an array of first-time mortgages from which to choose, it is a good idea to shop around and choose a deal that will help you most in order to purchase your dream first home.

Some important considerations

Over recent years, house prices have been rising astronomically in the US. First-time buyers are finding it impossible to step onto the property ladder. Many have had to overstretch their finances or borrow maximum levels to enable to purchase their first home. If you are in such a position, take care to only borrow what you can afford. It is all too easy to get into fall into financial difficulties. Work out what you can afford and stick to your budget

As a first time home buyer, it is probably wise to look at fixed rate or capped deals so you can guarantee that your monthly repayments stay consistent.

Consider taking out a deal that gives you free repayment holidays – this will give you some flexibility if you find yourself suddenly short of funds.

As a first time buyer with no previous experience of buying property, it is crucial that you read the small print. Make sure you do not find yourself tied into first mortgage deals which carry unfavourable clauses and restrictions.

Compare the best mortgages

 
 
 
 
 
 
 
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