First Time Buyers

 

As a first time buyer the process of getting onto the property ladder can be quite intimidating. You will need to discover the level of mortgage loan that a lender will be able to let you borrow to see what properties you can afford. You will also need to evaluate the different mortgage types that are on offer and what each of these mortgages mean to you as a first time buyer, given your available monthly budget.

 

Plus 4 Financial Services will be able to advise you on each of the mortgage types that are available to you as a first time buyer and what each of them will mean to you.

 

We are able to guide you through the process with a high quality personal service and search the UK first time buyer mortgage marketplace on your behalf to find the best deal for you. This makes the whole process much less time consuming for you and a lot less confusing.

 

Who do lenders regard as a 'first time' buyer?

 

This varies from lender to lender. For many, a first time buyer is anyone who has never been the owner of a property. For others, a first time buyer is someone who has previously owned a home but has been off the property ladder for two years or more.

 

What matters most is the level of security a buyer can offer against a loan. Obviously, lenders like to feel safe in the knowledge that they will be repaid, and the more you can do to prove this ability, the higher the loan you are likely to be offered.

 

Do I need a deposit as a first time buyer?

 

Yes. You will need at least a 5% deposit. The more deposit you have can increase the number of mortgage options open to you, and therefore help you find a more competitive deal. You may be able to save up this deposit yourself or alternatively many parents of first time buyers are releasing equity from their own homes in order to provide their children with a deposit for their first home.

 

What is an Agreement in Principle?

 

An 'Agreement in Principle' will usually involve the lender performing a credit check and address check on you. If you pass their initial criteria, they will normally supply you with a certificate which you can show to an Estate Agent as proof that you have passed the lenders initial checks.

 

One thing to bear in mind is that an Agreement in Principle is not a guarantee that the lender will lend to you as it is always dependent on a suitable valuation of the property you wish to buy and on you being able to provide satisfactory proof of your address and income.

 

Is it dangerous to have lots of credit checks done?

 

Each time you have a credit check done it leaves a 'footprint' on your credit file which in itself isn't a huge problem, however, having too many credit checks done in a short space of time will dangerously lower your credit score. Always speak to your Independent Mortgage Adviser first as they will suggest the right course of action based on your personal circumstances. You should only ever need to have one credit check done when your Independent Mortgage Adviser arranges an 'Agreement in Principle' for you.

 

How much can I borrow?

This depends entirely on the lender as they will all have different rules on how much they will lend.

 

Speak to Plus 4 Financial Services and we will be able to arrange an 'Agreement in Principle' that will normally state the maximum loan amount available to you based on your current earnings.

 

It is important that you have a clear figure in your mind of what is realistically affordable to you each month.

 

You must remember that it is not just the mortgage payment that you will have to pay each month, there will also be your utility bills, council tax and other household expenditure.

Plus 4 Financial Services will help you work out how much you can afford to pay each month. There is little point in being a home owner if you cannot afford to go out and enjoy yourself every now and then or even worse, have your home repossessed because you have failed to meet the repayments.

 

What is the home buying process?

 

Your first point of call is to arrange the Agreement in Principle as mentioned earlier.

You will need to find a suitable property.

The estate agent will ask you how much you are willing to offer to buy the property.
Once your offer is accepted you will need to contact your Independent Mortgage Adviser so that he/she can start arranging your mortgage for you.

You will then need to find a solicitor that will arrange all of the legal work for you. It is recommended to get a few quotations from a handful of solicitors as their fees do vary quite considerably.

Once your mortgage application has been signed off (underwritten), an 'Offer Letter' will be sent to you which states the terms and conditions of the mortgage. Sometimes you will need to sign the offer letter to show that you have accepted their terms.

Your solicitor will then arrange for you to 'Exchange Contracts'. Once you have exchanged contracts, both you and the vendor (the seller) cannot pull out of the sale.

The final stage is for the completion date to be set by the solicitor.

How much will I have to pay upfront?

 

The mortgage lender will usually charge an Arrangement or Booking fee and Valuation fee. This are either paid up front or can sometimes be added into the loan. Some lenders offer cash-back as an incentive but be wary as there will usually be extra conditions if you take the cash-back.

 

Legal fees are usually paid to your solicitor on completion of the mortgage however some fees need to be paid up front such as Land Searches. Your solicitor will advise you on his/her fees from the very start. These will include Land Searches and Stamp Duty (if applicable) plus any deposit you wish to pay.