Mortgages For First Time Buyers
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Get Your Foot on the Ladder
Trying to get a foot on the property ladder can be a struggle for many of us. Often with university debt stacked behind you and a low paid, entry level first job, saving enough money to put down a deposit is a common stumbling block - especially for first time buyers.
To help combat this, the government has introduced a number of different Help to Buy schemes - including Help to Buy Equity Loan scheme, the Help to Buy ISA, and the ability to purchase a Shared Ownership property using the Help to Buy scheme. All are aimed at helping those struggling to get to where they want to be on the property ladder.
The UK Government has introduced a number of different Help to Buy schemes, all aimed at those struggling to get to where they want to be on the property ladder.
What type of Mortgage do I Choose?
First time buyers often have a limited deposit and so require high loan-to-value (LTV) mortgages. For example, you may only have a 10% deposit and so need to borrow 90% of the value of your new home. There are lots of high LTV mortgages on the market, and there are two main types from which to choose. The type of mortgage you opt for will depend on your own particular circumstances and requirements.
Fixed or Tracker rate mortgages require you to pay a fixed rate of interest for a predetermined period of time, for example, a 6% interest rate for the first five years of the mortgage period. With a fixed rate mortgage you know exactly how much your repayments will be for the foreseeable future, which provides peace of mind and allows you to budget accordingly.
Tracker mortgages vary with the Bank of England Bank rate, so repayments can go up or down. If central interest rates fall then you save money each month, but if they rise, you will be required to pay more. Tracker mortgages can also be capped which means that the interest rate payable can’t increase above a set maximum rate.
Within these two main categories of mortgage there are also several other options such as bank account mortgages and offset mortgages. For more details on the types of mortgage available to you, please feel free to contact us for impartial advice, by calling 0330 088 1260 or use our contact form.