First Time Buyer (FTB)
First-time buyers refer to individuals or couples who are purchasing a property for the first time. The process of buying a home can be exciting but also challenging, especially when you're unfamiliar with the various steps involved. Fortunately, there are many resources and programs available to help first-time buyers, including special mortgage products and government assistance.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE
Understanding Your Finances
1
Credit Score
Lenders use your credit score to assess your ability to repay a mortgage. A good credit score can help you secure a better interest rate.
If your credit score needs work, take time to improve it before applying for a mortgage.
2
Deposit
Most lenders require a down payment, which is a percentage of the home's purchase price. As a first-time buyer, some government schemes may allow you to buy with a smaller down payment (e.g., 5% of the purchase price), but typically, you’ll need at least 10-20% for a standard mortgage.
3
Affordability
Lenders will also assess how much you can afford to borrow based on your income and existing financial commitments.
As a general rule, the more you can save for a down payment, the better your mortgage options will be.
Mortgage Options
There are several mortgage options that are tailored to first-time buyers:
Right to Acquire
The Right to Buy scheme is a UK government policy that allows council tenants (and some housing association tenants) to purchase their home at a discounted price.
Shared Ownership
Some first-time buyers opt for shared ownership, which allows you to buy a portion of the property (typically between 25-75%) and pay rent on the remainder.
You can gradually increase your share over time.
Joint Owner & Sole Proprietor
A Joint Borrower Sole Proprietor (JBSP) mortgage allows multiple people to apply for a mortgage, but only one person is the legal owner of the property,
The other applicants are jointly liable for the mortgage payments.
Plan for your deposit!
1
Set a Savings Goal
Determine how much you need to save by calculating the deposit (usually 10-20% of the home’s price). For example, on a £200,000 home, a 10% deposit would be £20,000.
2
First-Time Buyer Savings Accounts
In the UK, there are savings accounts specifically designed for first-time buyers that offer tax incentives, such as the Lifetime ISA in the UK, which offers a government bonus.
3
Gifts or Family Help
Some first-time buyers receive help from family members or friends in the form of a gift toward their deposit. If this is the case, you’ll likely need a letter confirming that it’s a gift and not a loan.
Other costs
In addition to the deposit, there are other costs to keep in mind when buying a home for the first time
There may be a fee for mortgage advice. The precise amount of the fee will depend upon your circumstances but will range from £150 to £995 and this will be discussed and agreed with you at the earliest opportunity.
The guidance and/or information contained within this Website is subject to the UK regulatory regime and is therefore targeted at consumers based in the UK.
Anantam Mortgages and Protection is a trading name of Cox & Flight Financial Solutions Ltd is an appointed representative of HL Partnership Limited which is authorised and regulated by the Financial Conduct Authority
Cox & Flight Financial Solutions Ltd registered in England and Wales with company number 13246868. Registered Office: 1a Towergate, Guisley, Leeds, LS20 9JB.