What First Time Buyer Mortgages Are Available in 2022

What First Time Buyer Mortgages Are Available in 2022

There are several different first home mortgages available to buyers in the UK, so you can find one that fits your needs and budget. In this article, you will find different types of first time buyer mortgages available in the UK and receive a breakdown of what each one offers. A mortgage broker can help you find the best option.

What Is a Mortgage Broker?

A mortgage broker is a professional who works with lenders and borrowers to help them get the best possible mortgages. They can help you find the right lender, assess your financial situation, and provide guidance on the best type of mortgage for your needs.

Brokers can also help you get pre-approval for a mortgage and make the process easier. They can also connect you with resources like loan calculators and mortgage calculators to help you figure out how much money you need to borrow and how much you can afford.

Although a mortgage broker is not required to get a good mortgage, they can help make the process easier if you have no credit history or a low credit score.

Types of Mortgages There are a few different types of mortgages that first time buyers can get in the UK. The most common type of mortgage is the standard variable rate mortgage (SVRM). You borrow money from the bank or building society, and they give you a set interest rate for some time. If the interest rate goes up during that time, you have to pay less. The downside is that if you don't renew your mortgage when it comes due, you may need to sell your property to settle the debt.

There are also fixed rate mortgages, which are usually cheaper than SVRMs but have higher initial payments. You can also get mortgages with negative interest rates, which means that the bank pays you instead of charging you interest. This can be useful if you're planning to use your mortgage money to buy an asset worth more than your original investment.

If you're a first-time homebuyer in the UK, there are a variety of mortgages you can get. You can choose a fixed rate mortgage, an adjustable-rate mortgage, or a hybrid mortgage. Fixed-rate mortgages are the most common type of mortgage, and they offer security and stability. An adjustable-rate mortgage offers you the opportunity to adjust the interest rate each year, which can help you save money over time. Finally, hybrid mortgages combine features of both fixed-rate and adjustable-rate mortgages, giving you more options and flexibility.

What Are the Pros and Cons of Getting First Time Buyer Mortgages?

When you're looking to buy a home, it's important to know the pros and cons of first time buyer mortgages. A thorough discussion with your mortgage broker can provide further details.

Pros of getting a first time buyer mortgage: • • • •

You may be able to get a lower interest rate than you would if you were buying a home with more experience.

If you have good credit, your lender may be willing to give you a low-interest rate or even offer you a loan without having to qualify for a mortgage insurance policy.

You could benefit from government programs that help new homeowners afford their homes.

If you're uninsured, having a first time buyer mortgage may allow you to get coverage from your lender.

Cons of getting a first time buyer mortgage: • • •

Your lender may require higher down payments than if you were buying a home with more experience.

Your monthly payments could be higher than if you were buying a home with more experience.

If something happens and you can't make your monthly payments, the value of your home could decrease significantly.

Types of Mortgages for First Time Buyers Help to Buy Equity Loan Scheme If you're a first-time buyer who wants to get ahead of the competition, you'll want to consider taking out a mortgage through the Help to Buy Equity Loan Scheme. The Government provides you with 20% (40% in London) of the property value as a loan, and you have to provide a 5% deposit. The benefit is that for five years, you pay zero interest. This type of scheme is only suitable for people buying their first home, which has to be newly constructed.

Right to Buy Scheme If you're a first-time buyer in the UK, you may be eligible for a mortgage through the Right to Buy scheme. The scheme allows qualifying households to purchase newly built homes from government-owned housing associations at a discount on the market price. You may also get a mortgage through a private lender if you meet certain criteria. To buy the property, you have to be a tenant for at least three years, with each year bringing in more discounts.

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For flats, the discounts range from 50%-70%, depending on how much time you've been a tenant.

For houses, the discounts range from 35%-70%, depending on how much time you've been a tenant.

Shared Ownership Mortgage First time buyers in the UK can get a shared ownership mortgage. This is a mortgage where the buyer and the seller jointly own the property. The advantage of this type of mortgage is that it can be a cheaper option than other mortgages available to first time buyers.

Buy To Let Mortgage Brokers in the UK are more than happy to offer first time buyer mortgages. So whether you’re buying your first home or you’re looking to invest in property, a buy to let mortgage could be the perfect option for you.

Here are a few things to keep in mind if you're considering a buy to let mortgage: • •

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You'll need good credit history - Most lenders will require a good credit history before they consider lending you money for a buy to let mortgage. So if you have any delinquent debts, make sure you pay them off before applying for a loan.

You'll need a reliable income - Your monthly rent and mortgage payments will need to be enough to cover your costs, including your monthly bills and repayments on the buy-to-let mortgage. So make sure you have an income higher than what your monthly rent and mortgage payments would amount to.

You'll need reasonable deposit amounts - Lenders will usually require borrowers to put down at least 5% of the property's value as a deposit. This money won't come back until you've fully paid off the loan.

The opportunities that come with buying your first home outweigh the challenges. Different schemes and discounts help make the buying process more affordable and easier than you might think. First time buyer mortgages are a possibility for everyone, and any mortgage broker will help you find the best deal for you.