First Time Buyers

Lenders have established guidelines for how to calculate how much you can borrow. Although this might vary between lenders, most will consider these details.

Income: All wages, pensions and investments, bonuses, commissions, benefits, or maintenance payments you receive.

Expenses: Essential expenses such as food, travel, childcare and holidays, as well as non-essential expenditures such as vacations and leisure activities.

Debt: Existing credit agreements such as credit cards or overdrafts, or loans.

Deposit: The amount you have saved for a lump sum to be used as a mortgage deposit.

Employment status: Whether you are employed full-time, part-time, self-employed, unemployed, or retired.

Credit history: This includes your credit score, whether you have declared bankruptcy or have had any county court judgements (CCJs), or individual voluntary arrangements.

If you don’t know how much you can borrow, we can help. 

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Most people need to put down a deposit when they apply for a mortgage. The size of the deposit will vary depending on the lender and the loan-to-value ratio, but it is typically between 5% and 20% of the purchase price. There are several reasons why lenders require a deposit:

It shows that you are serious about buying the property and are willing to put your own money at risk.

It acts as a cushion against any negative changes in the value of the property.

A larger deposit will usually result in a lower interest rate, which can save you thousands of pounds over the term of the loan.

For many people, saving up for a deposit can be a challenge. However, there are several ways to speed up the process, such as using a gifted deposit or taking out a lifetime ISA. With some careful planning, it is possible to buy your dream home sooner than you think.

A mortgage in principle (also known as an agreement in principle or a decision in principle) is an offer of a mortgage from a lender, based on an assessment of your financial situation. It’s not a firm offer, but it gives you an idea of how much you could borrow and is based on an initial affordability assessment.

Once you have a mortgage in principle, you’ll know how much you could afford to borrow from that particular lender. This can make house-hunting more efficient as you’ll only look for properties within your price range.

It’s worth bearing in mind that having a mortgage in principle doesn’t guarantee you’ll get the mortgage when you apply for it. The mortgage lender will carry out further checks when you make a formal application, including a credit check. If your circumstances have changed or your credit score has deteriorated since obtaining the mortgage in principle, this could affect the decision.

Mortgage applications can be a daunting process, with paperwork and forms to fill out. However, we can help to make the process easier. We are experienced professionals who understand the ins and outs of applying for a mortgage. We can guide you through the process and help you to understand the documents you need to provide. In addition, we will offer support and advice throughout the application process. All lenders vary, but normally we will require the following for the application:

/ Proof of ID
/ Proof of income (Payslips or tax return)
/ Bank statements
/ Proof of deposit

It’s worth noting that this is an extremely important stage to get right, as incorrect information, wrong documents or applying for the wrong mortgage could result in your application being rejected, which could incur a significant delay on your journey to owning your own home.

Speaking to an experienced and knowledgeable broker, who can provide advice and who can check your details and documents to ensure they are correct will help prevent that happening.

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Mortgage offers are usually valid for six months, although this can vary depending on the lender. Once you’ve received an offer, you’ll need to start the conveyancing process. This is when your solicitor or conveyancer will carry out all the legal work associated with buying a property. They’ll likely arrange for a survey to be carried out on the property.

Sometimes, if information on the application doesn’t match records a lender has access to, or the documents are not acceptable, your application will be declined. This could be for a number of reasons such as missing or late payments, having an account in arrears within six years and making too many applications recently which has resulted on multiple hard searches being recorded against your report. There can also be mistakes made during application process such as incorrect addresses provided.

You can reduce the chance of this happening by speaking to an expert and experienced broker who can guide you through the process.

When you exchange contracts, you are legally committed to buying the property. At exchange, both you and the seller sign the contract and agree on a completion date. You will also pay a deposit (usually 10% of the purchase price). Once exchange has happened, the transaction is legally binding and cannot be cancelled. After exchange, your conveyancer or solicitor will prepare for completion. They will check that all conditions in the contract have been met. A few days before or on completion, they will give the keys to your new home to their agent or solicitor.

On completion day, the balance of the purchase price is paid over, and you can collect the keys to your new home from their estate agent or solicitor. They will also notify the Land Registry of the change in ownership. And that’s it! You are now the legal owner of your new home.

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A mortgage deposit is the initial amount you pay towards the total price of a home, which reduces the amount you need to borrow for your mortgage. For instance, if a property is priced at £250,000 and you have a £50,000 deposit, you would need to borrow £200,000 from a lender to purchase the house.

The larger your deposit, the less you will need to borrow, and the opposite, a smaller deposit means you will have to borrow more.

To get an estimate of how much you could borrow based on your current deposit, try using our borrowing calculator. If your deposit is insufficient for the property you desire, you may need to save more. Once you determine how much you can borrow, you can calculate your potential monthly repayments.

Many first-time buyers begin with a 5% deposit, which is the minimum required by most lenders, although a 10% deposit is also common.

This percentage is part of what is known as the loan-to-value (LTV) ratio, which compares the amount you are borrowing to the property's value. For example, with a 5% deposit, your LTV would be 95%.

The exact amount you need to save depends on the total price of the property you wish to buy. However, there are advantages to having a larger deposit, including:

· Better interest rates: A higher deposit can qualify you for more favorable rates.

· Increased chances of approval: Lenders may be more likely to approve your mortgage application with a larger deposit.

· Options to borrow more: A bigger deposit can reduce the overall impact of your borrowing.

· Potentially lower monthly repayments: Borrowing less can lead to reduced monthly costs.

While saving for a larger deposit has its benefits, there are also options available if you have limited savings or need to move more quickly.

You can still get a mortgage! With options such as the mortgage guarantee scheme, shared ownership, and Own New, it is possible to purchase a home with a small deposit starting from just 5%. The availability of these options may vary depending on the lender, but most lenders offer solutions for those with smaller deposits. A mortgage adviser can assist you in finding a lender that offers deals tailored to your needs.