What's the best mortgage for first-time buyers?
Our top tips for newbies looking for the right mortgage
Last updated on
Oct 15, 2024 21:28
The best kind of mortgage for a first-time buyer is the one that fits your unique situation. Working with a mortgage broker like Habito can help you figure out what’s right for you.
The journey to buying your first home can feel like a rollercoaster. One minute, it’s exciting. The next, it's feeling pretty daunting. So, to help keep you on track, here’s everything you need to know about first-time buyer mortgages.
Some lenders have different definitions of a first-time buyer. Generally speaking, you’ll be considered one if you’ve never owned a home before, either in the UK or abroad.
On the other hand, even if this is your first time buying a home, you probably won’t qualify for first-time buyer status if:
However, even if you fall into the second category, there’s still a chance you could be treated as a first-time buyer by certain lenders.
Speaking to a mortgage broker, like Habito, can help you find the lenders whose definitions of ‘first-time buyer’ match your particular situation. There are lots of excellent mortgage deals out there for first-time buyers, so asking a broker to help you to track them down could save you a hell of a lot of time.
There’s no one-size-fits-all approach for first-time buyer mortgages. The best deal for you will depend on:
But before you choose a mortgage, there are a few things you need to do:
When you apply for a mortgage loan, a mortgage lender will put your finances and credit score under the microscope to work out your ‘affordability’ – in other words, how much you can afford to borrow for your mortgage loan.
First, they’ll look at your annual salary, any other income you earn (like rental income or benefits) and whether you’re employed or self-employed.
If you’re self-employed, things can be a little stricter than if you’re an employee. For starters, you’ll need to provide two to three years of accounts instead of just three months of payslips.
Learn more here: Buying a home when you're self-employed.
Next, the lender will review your outgoings, such as household bills, loans, credit cards, and childcare costs. And they’ll also check your credit history to see if you’re a reliable and responsible borrower (or if you’ve got a history of missed payments).
Once they’ve collected all the necessary information, the mortgage lender will decide whether they’re willing to lend to you, and if they are, the total amount you can borrow.
Here’s a detailed look at the mortgage application process.
As a first-time buyer, you’ll come across a lot of different mortgage types. Here are the main ones you need to know:
Read more about the different types of mortgages here.
Good news: there are a few schemes designed to help you put that first foot firmly on the property ladder. These include:
Finally, here are some of our top tips to make the first-time buyer experience less of a rollercoaster.
Above all else, the expert advice of a mortgage broker (like Habito) can make applying for a mortgage for the first time even easier. And the best bit? It’s totally free. Get started here.
Should you remortgage with the same lender? Here’s how to do it, why you might want to, and when switching lenders might be better.
A short guide to everything first-time homebuyers need to know, including how to make an offer on a property and what happens when it’s accepted.
Thinking of buying your first home but not sure where to start? Here’s a simple, step-by-step guide to the process – from sorting your finances, to viewing properties, to getting the keys to your new home.
Habito specialises in helping you get the best mortgage or remortgage, all online, for free