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What Is A First-Time Buyer?

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The first step onto the property ladder is one of the most exciting moments in someone’s life. Buying a house for the first time is an incredible feeling. Getting to the point where you own your first home is the tricky part.

But buying a house for a first-time buyer doesn’t have to be stressful or complicated. With the right advice and guidance, you can save money and time. If you want to find out what benefits you are entitled to as a first-time buyer a mortgage adviser can guide you:

As a first-time buyer, you do not have to pay stamp duty on the first £300 000 of a house valued up to £500 000. As well as this there are a number of schemes that can help keep your costs down. This is why it is important to know if you qualify as a first-time buyer, so you can take advantage of these benefits.

First-Time Buyer Explained?

You will qualify as a first-time buyer if you have never owned a residential property before, in the UK or abroad. This extends to both freeholds and leaseholds. Simple.

So, if you qualify as a first-time buyer what are some of the benefits and schemes you are entitled to:

Help to Buy Scheme

If you are a first-time buyer with a small deposit you could be eligible to use a Help to Buy scheme. Also known as a Help to Buy mortgage. The Help to Buy scheme is an equity loan where the government lends first-time buyers funds to buy a new-build home. As long as the purchase price is under £600 000.

This scheme allows you to borrow 20% of the value of the house you’re purchasing interest-free for five years. Provided you have a minimum 5% deposit. In London, you can borrow up to 40% of the property’s value. The loan borrowed from the government is repaid alongside the mortgage across a set-term.

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Conceptual hand writing showing First Time Buyers. Business photo text demonstrating buying house or flat who has not previously owned Mug of Hot Coffee with Blank Color Speech Bubble Steam icon

Shared Ownership

In the current financial climate, many people cannot afford a deposit that qualifies them for a mortgage. One way around this is to consider shared ownership when buying a house. This means you buy a share in a house from the landlord and pay rent on the remaining share.

Although this means you have mortgage payments alongside rent this can work out cheaper than a conventional mortgage. And importantly for first-time buyers, it means you don’t have to put down a large deposit to secure a mortgage. As the value of the property you’re purchasing is reduced because you are only buying a share in the house.

Rent to Own

The Rent to Buy scheme allows tenants who rent their homes from their local council to buy their home outright at a discount. The discount varies depending on the property and where you live in the UK.

To find the right mortgage solution for you, as a first-time buyer, it is crucial you contact a mortgage adviser:

Guarantor Mortgages

Assistance is you are struggling to raise a deposit.

A guarantor mortgage is a way of securing a mortgage when you do not have the required deposit. A Guarantor someone who agrees to act as a mortgage guarantor for you, the Guarantor commits to covering the repayments if you fail to do so.

Sometimes this type of Mortgage is called a family assisted mortgage, a guarantor mortgage is a way for parents (or grandparents) to help their family on to the property ladder.

The guarantor will not own a share of the house, and they won’t be named on the deeds. Being a guarantor simply means signing a legal agreement to cover mortgage repayments if the actual borrower falls behind.

Contact Us Today

Get in touch with one of our friendly and expert mortgage advisers today to find the right mortgage for you. As a first-time buyer, buying a house is completely new.

A mortgage adviser can guide you through the process and ensure you end up with the best value mortgage for your circumstances. Give us a call today on 01604 300033. Or fill in the enquiry form on our contact page today.


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