First-Time Buyers do not have the same level of financial history or security as those currently paying mortgages. Consequently, it may be difficult for a First-Time Buyer to obtain money from a lender, especially if they don’t have a sufficient income or a strong credit score.
Also as a First-Time Buyer they may be less experienced in property buying and may need extra guidance from a Mortgage Broker. In addition, as a First-Time Buyer, they may not be fully aware of the mortgage types: fixed; variable; split; or the fees that will be incurred.
How much can a First-Time Buyer borrow?
The amount varies depending on your income, debt levels, and general financial circumstances. Typically, a lender will allow you to borrow up to four times your salary, but this can be five times depending on your credit profile.
It’s advisable to contact a mortgage lender and to shop around. Some lenders will take account of state benefits and investments as income, while some will not. With the right advice, it’s possible to get a higher loan based on your situation.
What is an Agreement in Principle?
An Agreement in Principle is an estimate from a mortgage lender about the loan, you will be eligible for, based on your financial circumstances. It gives you a rough idea of what you can borrow and allows you to contact estate agents with serious inquiries.
An Agreement in Principle gives you a realistic insight into how much you have available and allows you to browse properties in that price range; it also offers reassurance to those with poor credit files.
How do I know what my credit score is and how do I improve it?
The easiest way to find out your credit score is to access your file through Experian or Credit Karma. These websites give you a detailed picture of the file that lenders will see when considering your application.
A Mortgage Broker will be able to negotiate with lenders on your behalf based on your position. However, you can also improve your score by paying off debt and using a credit card wisely.
What help is available for First-Time Buyers?
First-Time Buyers are important for the economy and for lenders to secure long-term loans with clients. As a result, there is a lot of assistance available to help and encourage First-Time Buyers to acquire a home.
Mortgage Brokers are able to see competitive deals from lenders,, lenders will be willing to negotiate on the loan agreement, and Government schemes are available to help you raise a deposit. If you’re a First-Time Buyer, it pays to take advantage of these benefits.
