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This page is for first time buyers looking for an introduction to applying for a mortgage and how mortgages work.
To buy your first house, youāll need to apply for a mortgage. This is a form of borrowing that is used to cover the remaining cost of a house or flat after your deposit has been paid.
In this guide, weāll explain how a mortgage works for first time buyers and explain how to get started.
A first time buyer is someone looking to buy property for the first time.
You canāt be classed as a first time home buyer if you have ever:
You must also be buying for your main residence ā this means that you cannot be buying a second home or a Buy to Let investment.
If you are buying a house or flat as a couple and one of you has previously owned a property, you will not usually be considered a first time buyer.
A mortgage is a lump sum lent to you by a lender which is used to cover the remaining cost of your house or flat, once you have paid your deposit.
Most mortgages fall into one of two categories:
Within the two mortgage repayment methods (interest only and repayment mortgages), there are different types of mortgages.
The different types include:
The maximum number of people allowed on a mortgage is usually four. This is because a property deed only has space for four names.
Your mortgage will start on the date as agreed in your mortgage terms. Usually, your first mortgage payment is due on the first of the month after you complete and your mortgage starts.
When deciding how much to lend you, mortgage lenders will look at your salary and monthly outgoings to make sure you can afford to keep up with the monthly repayments.
Use our Mortgage Calculator to see how much you may be able to borrow and understand what your monthly mortgage repayments could be.
There isnāt a set score you need to have for banks to offer you a mortgage. All lenders are different.
Before they decide to make you an offer, a lender will check your financial history, along with other factors like salary, before deciding whether to offer you a mortgage.
When applying for a mortgage you will have to factor in the following fees:
Annual percentage rate (APR) refers to your full borrowing costs for a year. This includes your annual interest rates as well as standard fees payable for the mortgage, such as mortgage broker fees and any other fees you paid to get the mortgage.
It means APR will be higher than your interest rate in most cases.
To get a mortgage as a first time buyer, youāll be required to provide all the addresses you have lived at, usually over the last five years and evidence of your recent earnings.
Youāll then need to prove that you can afford the monthly repayments on a mortgage.
Here are some tips which may help increase your chances of getting a mortgage as a first time buyer:
First time buyer mortgage schemes
As a first time buyer, there are a few schemes you can use to help you get on the property ladder:
The content on this page is for reference and does not constitute finance advice.
For impartial financial advice, we recommend government bodies like the MoneyHelper.
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