As a first-time buyer is can be a daunting prospect applying for your first mortgage. Here at Discovery Financial, we are here to help, we offer a range of first-time buyer related mortgages and schemes.
Being a first-time buyer can be daunting with all different elements to buying your first home not helped with the jargon used in the market.
Well Discovery Financial is on hand to help you plan your first purchase. It is important firstly to understand what happens at what point and what costs are involved. We have helped so many people set off in the right direction, before you set eyes on your first house or look at that beautiful new sofa to go in your new home, you should take advantage of our first time buyer fact find. This is where we will sit down face to face or over the phone and map out the whole process. Everything from how much of a deposit you need, to who is involved at what stage, to what your monthly out goings may look like once you move in.
It’s a common perception that as a first-time buyer with not a lot of credit history will be best speaking to their own bank first. Well this is not always the case, with all banks having set criteria, whether you are a customer or not, you may not meet their criteria. So, let us help you buy your first home and ensure you do not pay over the odds-on interest.
Once your mortgage is sorted you then need to start planning other things such as insurance. Well help is on hand for this too, as your dedicated broker we will ensure you have everything set up and in place ready for the exciting day, when you collect your keys and start on your new adventure.
How deposit work
Lenders normally require a minimum of a 5% deposit, so in simple terms if you were to buy a house for £100,000 you would need £5,000 as a minimum deposit. This would mean you are borrowing £95,000 from the bank, also known as 95% LTV (loan to value) The lower the LTV the better the rate gets. So, if you can place more of a deposit the interest in which you repay in most cases will be less. This works in brackets of 5%, so to get access to the next best rate a 10% deposit would normally be required, meaning you are now at 90% LTV.
No deposit purchase
A couple of lenders have come up with a brilliant way to help people onto the property ladder with the need of no deposit. How this works is your family place a deposit on your behalf but rather than them losing this money and having to gift it to you, they simply use your mortgage to save against. The deposit is set aside and interest paid on the savings, once there is enough equity and you have made a certain amount of payments, these funds are then released back to the person to which they came from .
Help to buy ISA
This is a brilliant way to save towards a purchase, speak to your bank to see if they can help you set up a Help to Buy ISA. This is a savings account that can only be used to buy a house and the best part about it is the government pay a brilliant bonus to you for doing so on top of your savings.
Help to buy purchase
Buying your first home may sometimes be buying a new build, in this situation banks will normally not lend as much as they would on a second-hand home. Well this is a great scheme put in place by the government to help you. Allowing you to borrow up to 20% of the house purchase, interest free over 5 years. If approved, you would have the ability to pay just 5% of your own deposit but still place a 25% deposit on your new first home.
Below is a break down of the buying process to help you better understand the buying process a little better.