Before looking at the different types of mortgage available, there are a few questions to consider.
Who do lenders regard as a 'first time' buyer?
This varies from lender to lender. For many, a first time buyer is anyone who has never been the owner of a property. For others, a first time buyer is someone who has previously owned a home but has been off the property ladder for three years or more.
What matters most is the level of security a buyer can offer against a loan (i.e. how much deposit you have). Obviously, lenders like to feel safe in the knowledge that you will be able to repay the mortgage, and the more you can do to prove this ability, the higher the loan you are likely to be offered.
Do I need a deposit as a first time buyer?
Yes. Due to the current market, you would need to obtain a minimum of 10% of the property value as a deposit. However should you have a history of adverse credit or be looking to purchase a new build property then this would increase to a minimum of 15% deposit in line with current lending criteria.
At Endsleigh Financial we also have access to lenders specialising in Shared Ownership, Shared Equity, Key Worker Mortgages and the Government based Homebuy Schemes. For access any of these initiatives you would need to obtain a minimum of 5% of the property value as a deposit.
How would paying a deposit help?
The ability to pay a deposit is very important not only because it reduces the overall amount of your loan and therefore reduces the interest you will pay, but it also means that the lender is more likely to offer you a mortgage. A good deposit can therefore increase the number of mortgage options open to you, and help you find a more competitive deal.
Are mortgages of 100% available?
Previously lenders offered 100% and 100%+ mortgages to help first time buyers get onto the property ladder. In the current market, there are no 100% or 100+ mortgage deals available.
Related links.
Mortgages
Remortgages
First time buyers
Fixed rate mortgages
Flexible mortgages
Tracker mortgages
Offset mortgages
Interest only
Key worker mortgages
Lifetime mortgages
Non standard mortgages
Right to buy mortgages
Bad credit mortgages
Buy to let mortgages
Mortgage calculator
Mortgage costs
Mortgage guide
Your home may be repossessed if you do not keep up repayments on your mortgage.
Endsleigh Financial Independent Tailoring is a trading name of Endsleigh Independent Financial Services Limited which is authorised and regulated by the Financial Services Authority. This can be checked on the FSA Register by visiting its website at www.fsa.gov.uk.
Endsleigh Independent Financial Services Limited. Company No: 4132605 registered in England at Shurdington Road, Cheltenham Spa, Gloucestershire GL51 4UE.