Buying your first home is a big step but also very exciting too. At ChooseMortgage we want to help first time buyers to choose the right mortgage for them.

Our aim is to make it as simple and easy as possible for you to find the right mortgage, first time and every time.
We will help you take your first step onto the property ladder, providing you with the best advice and help possible.

We have helped thousands of first time buyers find the best financial product to suit them. Our expert mortgage team are on hand to answer any questions or queries you may have.

So why don't you leave you details and we'll get someone to call you back.

Free First Time Buyer Mortgage Quote

Buying your first home may seem like a very overwhelming and daunting prospect but our qualified advisers can assist the first time buyer every step of the way.

Additionally our quotes are Free and as an independent mortgage broker we have access to the whole of the UK mortgage market. We will find the right first time mortgage to help you buy your first home.

Free First Time Buyer Mortgage Quote

There are three major types of mortgage available on today’s market:

(1) A Repayment First Time Buyer Mortgage is structured so that the monthly mortgage repayments, comprising part capital and part interest would, by the end of the mortgage term, repay both the original amount borrowed and the interest that had accrued over the mortgage term.

Points to Note:

• A Repayment First Time Buyer Mortgage is clear-cut and uncomplicated.
• It is a guaranteed way of repaying the loan provided that all payments are made when they are due.
• Total amount owed decreases as time goes by.
• As interest rates rise in later years, it will not have as much of an influence on the amount owed due to the fact that the capital has decreased.
• It is not compulsory to arrange life cover to repay the first time buyer mortgage.

Even though life cover is not always required, it is worthwhile to arrange at least term assurance to ensure the loan can be repaid in the event of your death and to avoid the house having to be sold in order to repay the First Time Buyer Mortgage.

So called due to the fact that you only pay interest to the lender each month. The original loan amount remains the same for the term of the loan. Therefore, suitable investments are planned in order to repay the loan at the end of the term. Optional Investments are arranged at the outset of the Free First Time Buyer Mortgage and can include Personal Pension Contracts, Endowment Policies, Personal Equity Plans (PEPs), and Individual Savings Accounts (ISAs) among others.

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(2) The amount originally borrowed on Interest Only First Time Buyer Mortgages does not change because you only pay off the capital at the end of the term. This is achieved by contributing towards the ”Repayment Vehicle“ (i.e.: the investment(s)) chosen which should provide a sufficiently large sum to repay the loan at the end of the term.

Although there appear to be many types of Interest Only mortgages, this is only due to the fact that the name is associated to the relevant investment. Even though the investments vary, the generic nature of Interest Only First Time Buyer Mortgages remains the same.

Points to Note:

• Investments are not guaranteed to appreciate so there is a certain amount of risk involved with the Interest Only First Time Buyer Mortgage.
• If the investment does not provide as good a return as was expected, it may not cover the full amount of the loan. The onus is then on you to ensure that you can repay the loan at the end of the term.
• Investments associated with Interest Only mortgages are portable, meaning that you can keep the investment, add to them and link them to a new mortgage if you move house.
• As the original amount borrowed never decreases, if you sell your house the original amount borrowed will still need to be repaid

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(3) Flexible First Time Buyer Mortgages This is a relatively new type of First Time Buyer Mortgage which, as the name suggests, is flexible. It is structured so that you can overpay, underpay and even take 'payment holidays' without incurring any penalties. Most flexible First Time Buyer Mortgages have their interest calculated daily, bringing about the full benefits of overpaying. Regularly overpaying the Flexible First Time Buyer Mortgage without later underpaying it could lead to the mortgage being paid off sooner and saving you thousands of pounds in interest.

Although Flexible First Time Buyer Mortgages fall into either Repayment or Interest Only Mortgages, they have been included here due to all the options that come with them, e.g.: overpaying/underpaying, payment holidays, pay loan off sooner, etc.

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Points to Note:

• Permits overpayments and underpayments on first time buyer mortgages and allows all overpayments to be drawn back.
• Gives you the option to repay your loan before the end of the term by overpaying.
• Usually interest is calculated daily giving the benefit of saving you money when overpayments are made, even if the money is drawn back at a later date.
• Allows you to vary the amount you pay, either overpaying it, underpaying it or taking payment holidays as long as the outstanding balance is not greater than the amount originally borrowed.
• Some enable you to use your mortgage account as a current account, giving you the ability to pool your money with the standard current account options of a chequebook and debit card.
• There are generally no penalties for redemption of the mortgage.

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Main benefits

• Vary your payments to adjust to your current financial situation and lifestyle.
• Has the potential to supply you with substantial interest payment savings.
• Provides an excellent place to house spare money, e.g.: annual bonus. This is due to the fact that interest saved on your loan will normally outweigh the amount you would normally receive from a savings account, even prior to income tax which usually affects savings accounts.

Free First Time Buyer Mortgage Quote

UK First Time Buyer Mortgage Advice There are three groups of people who can advise you. These are Independent Financial Advisors (IFAs), intermediaries (e.g.: Insurance Brokers) and the Mortgage Lenders themselves. However, the amount of advice each can give varies.

IFAs can advise on all the issues, the mortgage, associated investments and insurance arrangements. They can offer you a full range of products from all the Financial Services companies on the market.

Intermediaries such as Brokers can generally advise on mortgages and will generally have links to companies who can advise and arrange the investment and insurance aspects.

Most mortgage lenders can advise only on the loan but some are tied to a life company and can therefore only arrange the associated investment and insurances through that company.

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Important Note
Interest rates can fluctuate with very little warning. Therefore this is another important area which must be seriously considered due to the different types of interest rates that are available and their implications.

Current mortgage interest rates depend on the financial markets. As these rates fluctuate, so too can the amount you pay each month. However, mortgage lenders put together ”Special offers“ to entice you to buy from them. Some of these special offers include fixed, variable and discounted offers.

Each of these offers has its own advantages and disadvantages. For example, you may think that interest rates are going to decline so you settle on a variable rate but if the rate goes up, you will have to pay more. Whereas a fixed rate remains static for a set period of time so that you have a set rate that you pay each month, irrespective of the actual ("market") rate at that time.

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Valuation
Lenders require a standard valuation to be undertaken on a property before even considering a mortgage application. This is to ascertain the true value of the property being purchased or remortgaged.

There are two further types of report other then the standard valuation, each giving more information. These are:

• Homebuyer’s Report: This provides you with information about the general condition of the property.
• Full Structural Survey: If the property being purchased is more than 10 years old or there are any aspects of the condition of the building that you would like investigated, a full structural survey will give you the required information prior to making a commitment.

With the above reports these will incur additional fees and some lenders will ask for further information depending on the property being purchased.

Due to the fact that property prices vary according to market conditions, the value of your property may depreciate as well as appreciate. In future, this could mean that your mortgage loan exceeds the property’s current market value. This is known as a 'negative equity' situation.

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There is no point searching for the house of your dreams if it is out of your price range.

How Much Can I Borrow? Before you start doing the rounds of estate agents, you need to know how large a mortgage you can get - there’s no point searching for the house of your dreams if it’s out of your price range. Start by approaching several lenders and ask how much they will let you borrow and request an ‘agreement in principle’ that confirms this amount. You can use this to add leverage to any offer you make on a home. The amount you can borrow will be based on the size of your deposit and how much you earn. Lenders are usually prepared to lend you around three times your annual earnings, or if you are buying as a couple, this rises to three times the first income plus the second income, or two and a half times your joint income. Research available mortgages by reading specialist magazines like What Mortgage and Home Buyer & Mortgage Advisor available in newsagents, and money sections in magazines, newspapers and the internet. Other costs involved with buying a property If the price of the property you plan to buy is more than £125,000, then you have to pay a government tax called Stamp Duty. The lender will need to carry out a valuation of your prospective home to check it is worth the money it is lending you. This will cost you from around £2000. Lenders may also charge an arrangement or completion fee. Legal fees are a major expense. Your solicitor or Conveyancer will charge a fee for its services, starting at £400. The land registry costs, a local search (usually between £80 and £150) and other disbursements are also on the solicitor’s bill on which you have to pay VAT. You will also need to set aside money for insurance, moving costs and furnishing costs.

Getting a first time buyer mortgage deal to fit your personal circumstances on the surface may seem a complex task, but by investing some time in understanding how mortgages work and what your obligations are will stand you in good stead in the long term.

For what is probably the biggest financial commitment you will ever make getting good financial advice about your options makes a lot of sense. We work with FSA regulated mortgage advisers to help you get the right first time buyer mortgage advice based on your circumstances.

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