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A simple guide for first time buyers

Buying your first home and getting onto the property ladder can be overwhelming. It’s likely to be your biggest financial commitment, so it’s important you’re making the right decision.

A mortgage adviser can help relieve the stress and answer any questions, as we know it can all be a little confusing at times. Here is our quick guide to get you started.

The mortgage process simplified

It’s time to save! Start putting some extra pennies aside, maybe by opting for a coffee out of the kettle rather than a Starbucks! You’ll need a minimum deposit of 5% of the overall house price.

Now, your real starting point when buying your first home, is speaking with us to find out how much you can afford. There’s nothing wrong with dreaming big, but it’s important to find out how much you can afford and establish a budget first.

Next, it’s time to secure an Agreement In Principle: a document which confirms your expected budget, and that a lender is willing to give you a mortgage, subject to a full mortgage application. Many estate agents now require you to have an AIP before you can even view a property, as it helps you stand out as a serious buyer who lenders are already happy to consider for a mortgage.

It’s time to start viewing properties! This can be an exciting yet stressful time, but if you complete the above steps, this should put you in the best position. Once you’ve found your dream home, it’s time to put an offer in. Don’t be afraid to negotiate.

Next up is applying for your mortgage. Let us help find you the right mortgage deal and relieve any stress.

Your mortgage

A mortgage is a loan that enables you to buy your property, and for the majority of first time buyers, the money you borrow will need to be paid back over a set period of time, such as 25 years, via monthly payments. Your loan will also have interest applied, and it’s our job to find you the most suitable interest rate for your financial ingoings and outgoings, as well as a deal that suits your future plans.

Lenders offer mortgage deals on interest rates for set periods of time. These are usually two or five year deals, and we’ll talk to you about which is best for your circumstances. We’ll find the deal, apply to the lender to get the deal, and secure your mortgage offer.

At the end of your initial deal, you’ll ideally need to remortgage to a new deal to set your interest rates again until your loan is fully repaid. This could mean moving your loan to a new lender, or staying with your original lender, and again, this is something we can help with when the time comes.

To talk about finding the right mortgage deal for your first home, and explain how everything works in more detail, please do get in touch- we would love to help.

Help to Buy schemes

Trying to get onto the property ladder can be one of life’s biggest challenges, and to help more people buy their first home, the government introduced many ‘Help to Buy’ schemes in 2013. These include: Help to Buy ISA, Lifetime ISA, Help to Buy Shared Ownership, and the Help to Buy Equity Loan scheme.

If you’re struggling to save for a deposit, a Help to Buy scheme might be for you.

Stamp duty

Stamp Duty Land Tax (SDLT) or as most people know it - Stamp Duty, is tax that you may have to pay when buying a property in England or Northern Ireland. The good news is, as a first time buyer, you won’t have to pay any Stamp Duty on properties under £300,000, so it could be one less thing to think about.

For Scotland and Wales, it’s slightly different, but an adviser can talk you through how this if you’re buying in these areas.

Protection

Protection’ refers to the many types of insurance that can be put in place to help protect you, your home, your family, and your income - something that’s more important than ever, now you’re taking out a mortgage. Protection is needed in case life throws the unexpected your way, such as a critical illness or unemployment. The most common types of cover include: income protection, life insurance and critical illness cover, and they all help keep your financial future secure.

At Alexander James Mortgage Services, we offer free protection advice to ensure all our customers are fully covered for their new mortgage. We can help find a policy that suits all your needs. Even if we’re not helping you with a mortgage, we still offer free protection reviews, as we understand how important it is to be prepared for the unexpected.

If you’d like to get in touch with us to discuss all your possible options as a first time buyer, we’re always here to help.

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