Guide for First-Time Buyers
When you’re looking to buy your first home, it can be daunting and overwhelming. There are various factors to consider, from how to choose a mortgage to Stamp Duty tax relief and practical matters too. In this blog, we share a guide for first-time buyers to help you make more informed decisions about your property purchase.
Saving for a deposit
One of the biggest challenges for first-time buyers is affording the deposit. A survey by NHG Homes showed that nearly half of those saving to buy their first home said that affordability was a key obstacle. Also, around a quarter of those surveyed believed there was a lack of schemes to help first-time buyers.
Although mortgage rates have fallen slightly over recent months due to interest rate cuts, many people still cannot afford the deposit. It’s estimated that a quarter of 35 to 44-year-olds rely on financial support from their parents to buy a property. Also, half of 18 to 24-year-olds surveyed said they plan to work more so they can afford a deposit. However, there may be options available such as low-deposit mortgages and housing schemes.
Stamp Duty and Shared Ownership schemes
First-time buyers do not pay Stamp Duty on homes valued below £300,000. Also, many are often unaware of affordable homeownership schemes that could help them get onto the property ladder. Such schemes can provide first-time buyers with a more affordable route to homeownership.
A Shared Ownership scheme enables a buyer to purchase a share of a property (between 10% and 75%). This is usually from an organisation such as a housing association or local council. The purchaser then pays a mortgage on the proportion that they own, and they pay rent on the rest.
An advantage of Shared Ownership is that the buyer usually pays a lower deposit as they are only buying a proportion of the property. You can also usually buy more shares of the property in the future, which is a process known as ‘staircasing’.
What are the steps for a first-time buyer?
If you’re looking at how you can get onto the property ladder, then it’s worth talking to an experienced mortgage broker. We can help you understand what you can afford, and we can arrange a mortgage in principle so you can make an offer on a property.
It’s important to understand how a mortgage works and to ensure you can afford the monthly mortgage repayments. This is why mortgage brokers look at different factors such as your affordability in terms of income, which the lender will also check. We might be able to find you a mortgage with a longer term to help lower your monthly mortgage repayments.
First Time Buyer Mortgages
At Bubble Finance Hub, we know how daunting it can be when you are buying your first home. Our mortgage advisers will explain the different government schemes, along with the terms of any suitable mortgages to help you realise your property dreams.
As we have whole-of-market access, our team can compare hundreds of mortgage deals to help you buy your first home. As everybody’s situations are different, our approachable and empathetic team provide a bespoke approach to mortgage advice.
If you’re looking to buy your first home and need advice, get in touch to book an appointment.
Your home or property may be repossessed if you do not keep up the repayments on your mortgage.
Thank you for reading our blog, Guide for First-Time Buyers.
Bubble Finance Hub