Deciding to buy your first property is a big step, and it may be one that involves a lot of stress and strain – but it’s ultimately very satisfying when you step into a home that you own for the first time! If you’ve found a property you’d like to buy, you’re going to need a mortgage: and this guide should help you to decide what’s right for you.
First of all, while the housing market may seem like a daunting place, there is a lot of help out there for first-time buyers. Many banks and buildings societies offer special products for first timers – for instance, Leeds Building Society offers mortgages up to 95 per cent, which means you only need a deposit equal to five per cent of the total value of your house. If you’re buying a £120,000 house, this would mean you only need a deposit of £6,000.
The government also offers support to first-time buyers through initiatives like the FirstBuy equity loan scheme. Households with a combined income of less than £60,000 are eligible to apply for the loans, which help towards the cost of a deposit of up to 25 per cent. There is no fee on the loan for the first five years, and it is repaid when the property is resold or after 25 years.
If you’d prefer to simply save up a larger deposit, it’s a good idea to open a savings account where you and your partner can put a bit of money aside every month – again, some banks offer special accounts that are designed for property deposit saving. While this route may take a long time to achieve, it does mean you will pay less for the mortgage in the long run: this is why it’s generally best to put down the highest deposit you can afford.
The recent Budget also contained some positive news for first-time buyers, after the prime minister suggested that he plans to offer more support to under-30s looking to buy their first home. Meanwhile, industry predictions suggest that mortgage lending will rise by £10 billion this year, so if you’ve been thinking about home ownership for a while now might be the time to put your plans into action – just make sure you’re taking advantage of all the support you’re entitled to.
Getting a Mortgage As a First-Time Buyer
