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First Time Buyer Mortgages

May 3, 2008
One of the hardest parts of buying a home can be when you're a first time buyer. Not only can it be difficult to be able to afford your very first home; it can also be confusing working your way through all the different options and terminology around the first time buyer market. Therefore, knowing what the actual term means and what options are available to you will help you understand this area of the home-buying process.

What is a First Time Buyer?

Although the term may make it seem fairly obvious what a first time buyer is, it can actually differ from lender to lender. For example, it can mean someone buying their very first property to some lenders, while others will class you as a first time buyer if you've been off the property ladder for 3 years or more. So even though you're previously owned your own home, you could still be classed as a first time buyer.

Regardless of what lender you go to and how they view you, the most important factor in their eyes will be your ability to pay the debt back. Therefore the better your credit history, the more likely you are to be approved for a mortgage, whether it's your first or not.

Deposits

Even if you're a "traditional" first time buyer - as in, this is your very first home - you won't always need to have a deposit. Many lenders now offer 100% mortgages even for those new to the housing market; some will even offer as much as 125% of the value of the home.

Of course, if you can afford to pay a deposit, you should always try and aim for putting as much down as you can. Not only will it make the outstanding mortgage amount less, lowering the interest payments in the process, but it can also open up many more mortgage options for you. Lenders are always happier to offer better loans to people who show they can afford them.

Agreement in Principle

This is where you'll normally have both a credit and address check carried out on you. If you pass these simple checks, you'll be issued with a certificate, which will show estate agents and similar property sellers that you're a good prospect. It's essentially saying that you're creditworthy; however, it's not a guarantee that you'll still be able to buy the house you want. This will be decided by whether your potential new home is worth its valuation, and confirmation of your address, as well as proof of income.

There are many more parts to buying your first house once you have these initial areas covered. These include how much you can borrow, which is normally 3 times your wage; the length of the mortgage itself, which is usually 25 years but can be as much as 40 years; and closing costs, including solicitor's fees and paperwork transfers. However, if you speak to a mortgage advisor, they can ensure that you have all the information you need.
About the Author
For advice on Mortgages, information on various types of UK Mortgages, and other helpful resources visit http://www.ukmortgagesource.co.uk today
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