First Time Buyer

If you’re thinking about buying your first home you’re probably finding the whole process of choosing the right mortgage and actually buying your ideal home rather daunting? So what do you need to know to get on to the first rung of the property ladder?

The first step is to contact us and we will advise you on the mortgage options available to you.

In the meantime we’ve outlined below some background information on mortgages for first time buyers that we hope you’ll find useful.

How much can you borrow?

The amount of mortgage you can get depends on your income.

Income multiples do vary. As a rough guide, a typical multiple is four times your income. This figure could be higher or lower depending upon your individual circumstances and different lenders’ criteria. Some lenders do not use income multiples at all and will lend based on affordability.

Once you add to this the amount that you can afford to pay as a deposit, you have the amount you can pay for your first property.

Some lenders offer very good deals for first time buyers, so it always worth asking us to research the market on your behalf.

Any other costs?

It is also worth remembering the additional costs, on top of your deposit and mortgage that you will be expected to pay.

First time buyers purchasing their first home for £300,000 or less will pay no SDLT. Where the purchase price is over £300,000 but does not exceed £500,000 they will pay 5% on the amount above £300,000.
The relief will apply to purchases in England, Wales and Northern Ireland. In Wales, it will apply until Land Transactions Tax replaces SDLT for transactions in Wales from 1 April 2018. The Scottish Government’s Land and Buildings Transaction Tax came into force on 1 April 2015, replacing SDLT for land transactions in Scotland.
A calculator is available on HMRC’s website which calculates the SDLT due for first time buyers who are eligible to claim the relief:
https://www.tax.service.gov.uk/calculate-stamp-duty-land-tax

Higher rates for additional properties. You'll usually have to pay 3% on top of the normal SDLT rates if buying a new residential property means you will own more than one.

Plus you will have to pay for the survey and the valuation of the property, and solicitor’s fees.

You may also have to pay an arrangement fee for the mortgage and in some cases a  Higher Lending Charge - which is insurance for the lender for you defaulting on your payments when your property is worth less than the loan.

 

Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage.