Before the global economic crisis, lenders were content to lend people all, some lenders offering 120% of the property value, on the assumption property prices will just keep going up and up. But that certainly wasn’t the case, and when the property market crashed first time buyers suddenly had to start producing 20% deposits, and lending criteria became incredibly tight. There are now various first time buyer schemes for new builds available.
These trends meant that the Government was obliged to do something to help solve the problem: the result was first time buyer schemes on new build properties. Such Government schemes allowed first time buyers to get on the property ladder, and created a market for the building industry.
Ascot Mortgage Expert
The Help to Buy government backed scheme was introduced in March 2013, basically this scheme means that the Government lends first time buyers 20% of the property value, through an equity loan, so the buyer only needs a five per cent deposit to obtain a 75% loan to value mortgage.
The scheme is capped at homes worth up to £600,000, but it means that borrowers need a much lower deposit, and will have lower monthly mortgage repayments, meaning that they are more likely to be accepted for home ownership.
For example, on a property worth £200,000, the buyer would present a £10,000 deposit; the Government would add £40,000, through an equity loan; and the mortgage would be for £150,000, 75% of the property value.
If you live in Scotland there is a similar scheme called the MI New Home Scheme. Like in England, the Scottish scheme is designed to mean that first time buyers wishing to buy a new home only need a 5% deposit.
However the maximum value of properties that this scheme applies to is £250,000 and it also applies to existing home owners, who could get a 95%mortgage also.
The New Build Cymru Scheme is soon to be implemented in Wales, and is the same in its details as the Scottish scheme.
Applicants for this scheme need a good credit history, they also need to be able to show that they can meet the repayments, and they also need to have been able to accumulate a deposit of five per cent. It means, however, that first time buyers can buy new build homes, which helps to create a demand for the building industry, and allows first time buyers to access the types of homes that might previously have been out of their grasp.
For more information about the first time buyer scheme – Help to Buy, and other schemes for first time buyers, and to find out if you would qualify for this sort of scheme, please get in touch with Ascot Mortgages and we will carry out a quick free initial consultation with you to give you all the information you need to decide whether this type of mortgage is right for you.
Discover How Remortgaging Can Secure Your Financial Success and Home Upgrades
living in your present property while applying for another mortgage deal with a new lender. Before finding out how to remortgage and get the best offers from experts like Ascot Mortgages, you have to check meeting what parameters of the deal that can help you succeed the most. The range of background factors varies a lot — from the recently changed loan-to-value ratio or your existing agreement coming to an end.
Whether you are trying to get a more beneficial deal or searching for funding to improve your home conditions, remortgaging is one of the most advantageous scenarios to consider.
A guarantor mortgage is a type of mortgage that involves a third party, usually a family member or close relative, guaranteeing the mortgage repayments on behalf of the borrower. This arrangement is more commonly now known as joint borrower sole proprietor as the guarantor essentially is included as part of the mortgage application but not included on the title deeds to the property.
Shared ownership is a form of home ownership that enables buyers to purchase a share in the property and pay rent on the remaining amount. The buyer usually pays an initial deposit, which is between 5% to 10% of the price of the share being purchased, and then pays a reduced rent on the remaining portion owned by a housing association or other organisation.
A joint mortgage is a type of mortgage that two or more individuals take out together to purchase a property. It allows multiple borrowers to combine their incomes and share the responsibility of repaying the mortgage loan.
The loan-to-value ratio (LTV) is a financial term that represents the ratio between the loan amount and the appraised value or purchase price of an asset, typically a property. It is commonly used by lenders to assess the risk associated with a loan.
Repayment and interest-only mortgages are two different types of mortgage repayment structures. Here’s an explanation of each:
With an interest-only mortgage, you are required to have a separate plan or investment vehicle in place to repay the principal amount at the end of the mortgage term for residential mortgages. This could involve savings, investments, or other arrangements that aim to accumulate sufficient funds to pay off the loan. It’s crucial to ensure that the repayment plan is robust and will be able to cover the loan amount. For Buy to Let mortgages lenders will typically accept sale of the security property as the investment vehicle.
Consider a longer-term mortgage if:
Opt for a shorter-term mortgage if:
Consulting a mortgage advisor can provide personalized guidance.
Yes, it is possible to get a buy-to-let mortgage as a first-time buyer, but it can be more challenging. As a first-time buyer lenders may view you as a higher risk and will also base their lending decision on both rental income and your own personal affordability. However, if you have a good credit score, a stable income, and a solid business plan for your rental property, you may be able to secure a buy-to-let mortgage. It’s important to shop around and compare different lenders to find the best deal for your individual circumstances which is why contacting a mortgage broker for the right advice is a good solution.
Yes, you can get a first-time buyer mortgage if you’re self-employed but most lenders would require a 2 year minimum trading history. However, additional requirements may apply. You’ll need to provide evidence of income, such as business accounts and tax returns. Lenders may request an accountant’s certificate and consider your trading history. A larger deposit may be required. Specialist lenders may cater specifically to self-employed borrowers. It’s best to consult with a mortgage advisor or lenders directly for personalized guidance.
Apply for a first-time buyer mortgage when you have prepared your finances, saved for a deposit, and are ready to commit to homeownership. Consider obtaining a Decision in Principle before house hunting. Consult with a mortgage advisor for personalized guidance.
When budgeting for homeownership, consider the following costs: –
Ensure you research and estimate these costs to create an accurate budget. Our advisors are always available to assist you in finding the most suitable deal for your unique situation.
Searching for your first-time home? Ascot Mortgages is your go-to resource! Our experts specialize in assisting first-time buyers and have access to a diverse range of mortgage options. Whether you’re looking for a cozy apartment or a spacious house, we’ll find the perfect financing solution for you. Contact Ascot Mortgages today to discuss your first-time buyer requirements and embark on the exciting journey of homeownership.