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.
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
Regulatory Notice: You are currently viewing a webpage dedicated to Mortgage products. It is important that you understand that the information and advice provided on this page only are subject to regulatory frameworks. Anantam Mortgages and Protection are a trading name of Cox and Flight Financial Solutions Limited an appointed representative of HL Partnership Limited which is authorised and regulated by the Financial Conduct Authority and are responsible for the advice conducted on Mortgages and Buy to Let Mortgages.