emhfp.co.uk - First Time Buyers

First Time Buyers

If you are thinking about buying your first home, the process of finding the right mortgage, with over 60 providers and over 3000 products to choose from can be daunting.

This is where your independent mortgage adviser can help you navigate the mortgage maze. The cost to you of making the wrong choice could prove expensive. So what do you need to know?

A good starting point would be to check how good your credit rating is. The three main Credit Reference agencies are Experian, Equifax and Call Credit, and it is worth paying the small fee that these agencies charge, to get a personalised copy of your report. Once you have your file, check everything in it for accuracy, and contact the agency to change anything which is incorrect.

How much can you borrow?

The amount of mortgage you can borrow will depend mainly on your income, then the amount of unsecured borrowings you already have, and intend to keep, (for example a car loan with over 12 months payments remaining).

Income multiples do vary between lenders, as a rough guide, a typical multiple is four times your income. This figure could be higher or lower depending upon your individual circumstances and different lenders criteria. Some lenders do not use income multiples, but use criteria based on affordability.

As an example, if you earn £30000 per annum, and your only borrowing is a £150.00 per month car loan, you may be able to borrow £112800 (£30000 minus 150 x 12 months = 1800, giving you an income of £28200 x 4 =£112800)

Some lenders are more willing to lend to first time buyers, so it is always worth asking us to research the market on your behalf.

Whatever your mortgage needs are, contact us today to discuss your options!

Other costs you may have to consider!

It is also worth remembering what the additional costs are, on top of your deposit and mortgage that you will be expected to pay.

Survey fee / Valuation fee for the valuation of the property, this fee varies between lenders, and may include a non-refundable administration fee, and is normally paid with the application. The whole fee is non-refundable once the valuation has been carried out. The type of valuation you choose will depend on factors such as the age and condition of the property, and whether there is any history of subsidence in the area. There are three types:

Basic mortgage valuation:
This is for the lender's own purposes confirming the property provides security for the loan. You may wish to consider one of the more detailed types of survey for peace of mind.
Homebuyer's report
This provides concise information in a standardised format on the state of repair and condition of the property. The report will include comments on the property's defects and the valuer's opinion as to its marketability.
Full structural survey
This is a structural report based on a detailed examination of the property. Any areas of concern that you might have about the property will be investigated.

Solicitors fees - A solicitor is needed to assist in the legal aspects of moving home, such as transferring the legal title of a property from one person to another. This price varies fom solicitor to solicitor, so always ask for a quote.

Stamp Duty - This table shows the latest stamp duty rates on Residential properties:

You will pay:

Nothing on the first £125,000 of the property price.
2% on the next £125,000
5% on the next £675,000
10% on the next £575,000
12% on the rest (above £1.5 million)

As an example, If you were to buy a property for £275,000, you will pay £3750 of Stamp Duty. This is made up of:

nothing on the first £125,000
£2500 on the next £125,000
£1250 on the remaining £25,000

You may also have to pay an 'arrangement fee' to the lender for a mortgage, and in some cases a 'Higher Lending Charge' this is an insurance for the lender for you defaulting on your payments, when your property is worth less than the loan.