First-Time Buyer Mortgages - what you need to know.


Congratulations on buying your first home. It’s a huge milestone and one that sets a positive direction for the rest of your life. 

Although there are many things to think about, the good news is that Sussex Mortgages are here to help you through the process. As your mortgage advisor, we can research nearly the whole of the mortgage market to find you the best deal to suit your lifestyle.

Having a mortgage adviser greatly increases your chances of your mortgage application being accepted the first time. This saves you a great deal of time not having to search and apply to numerous lenders and you can rest assured that you have got the right mortgage deal for your lifestyle that could save you money over the whole of the mortgage term.

What is a first-time buyer mortgage?

As a first time buyer, you will need to take out a loan, or mortgage, which is secured against the value of the property you wish to buy. As a rule of thumb, you can borrow 4.5 times your joint income. So limit your search for a new home to that amount plus your deposit. Although you may find a mortgage calculator online, we would advise you to speak to us to understand other fees involved that may impact your financial outgoings like legal fees and stamp duty land tax (SDLT). 

If you, and whoever you are buying with, have never owned a residential property in the UK or abroad, then you are a first-time buyer and eligible for a first-time buyer mortgage. A first-time buyer mortgage is normally tailored towards the fact that first-time buyers will generally have less capital. Compared to other mortgages they will allow for smaller deposits of just 5% or allow other people like a parent or relative to guarantee your mortgage payments as well as even provide your deposit.

Is a first-time buyer mortgage right for you?

The first step is to take a detailed look at your finances and work out what you can realistically afford to pay each month, and then look for a mortgage deal that suits your budget. It should fit within your financial comfort zone and have a manageable monthly payment. This can vary according to how much capital and interest you are paying off over the mortgage term, the longer the term the less capital you pay off each month, terms of up to 40-years are available as long as your age at the end of the term does not exceed 70.

Fixed-Rate Mortgage: This is where the initial rate of interest is guaranteed for a set period in time, this is unlikely to last the entire term of your mortgage. It is usual to then move onto a SVR or Standard Variable Rate at the end of this period. We advise that we review your circumstances ahead of this to see what other competitive rates are available to keep the monthly payments in line with your circumstances.

Interest Only Mortgage: this type of mortgage allows you to pay only the interest charged each month for the term of the loan. You, therefore, don’t have to repay the amount you have borrowed until the end of the term. But there are many restrictions on these kinds of mortgages and often require a large deposit of at least £150,000 and a minimum income of at least £50,000

At Sussex Mortgages, we can talk you through the options and what will work best for your lifestyle.

How does a first-time buyer mortgage work?


When taking out a mortgage on a property, you will be required to put down significant payment upfront. This deposit shows that you are financially stable, as well as ensuring the mortgage is less of a risk to the lender. 

The amount of money you have saved will determine how much you can borrow. The more money you can put down at the start, the less you will need to borrow, and the better interest rate you are likely to get on your mortgage repayment. A mortgage usually requires a minimum deposit of 5%, but you will often need at least 20% to get a reasonable interest rate.

To put it simply: A bigger deposit means a better interest rate, lower monthly repayments and cheaper mortgage.

Applying for a mortgage:

The best time to look at mortgages is before you start viewing properties. This will allow you to get an idea of how much you are likely to be able to borrow and receive a mortgage Agreement in Principle (AIP) or sometimes called a Decision in principle (DIP). This will also prove to estate agents that you are committed to buying and some agents require this before putting in an offer to a vendor on your behalf. 

When applying for a mortgage, the lender will need to check your affordability to ensure that you will be able to keep up with repayments. This will be based on your salary and other income from investments or government benefits, your outgoings, and any outstanding debts. They will also conduct a check on your credit history to determine how reliable you are and how much you can borrow. This is why we recommend the first thing you do is get a copy of your credit file from CheckMyFile as they as they are unique in checking all four of the main credit agencies, Experian, Equifax, Transunion and Crediva.

Note: every time you apply to a lender for a Dip or Aip then this can leave a footprint on your credit file. So make sure you do not get too many agreements from different lenders as other lenders may not look favourably upon this. Some will run a soft credit check that will not impact your credit score, so make sure you check with lenders before you apply. We can help you with this.

Boost your chances of being accepted for a first-time buyer mortgage

We are sure you don’t want to be one of those applicants who does not get accepted for a mortgage. Whilst you are not guaranteed to be accepted for a mortgage, by following our advice below you will put yourself in the best position to be accepted for a mortgage.  

Get on the electoral roll:

If you are not registered to vote, you may find it a lot more difficult to take out a mortgage. Registering can be done quickly and easily, either online or by post. Once on the register, you are not obligated to vote, but it will improve your credit score.

Check your credit file:

Not everyone is perfect, and your credit file may contain mistakes that are damaging your financial reputation. An incorrect date of birth or the wrong address can make all the difference. Contact a credit reference agency to obtain a copy of your credit file and check it for any discrepancies. We recommend you get your credit report from CheckMyFile

Note: You are now departing from the regulatory site of Sussex Mortgages. Neither Sussex Mortgages nor PRIMIS Mortgage Network is responsible for the accuracy of the information contained within the linked site.

Keep on top of payments:

If your credit score is low, you will need to show lenders that you can be reliable with credit. Spending a small amount on a credit card each month and promptly repaying it on time will show them that you can borrow responsibly. Pay off all previous debt and set up direct debits so you never miss a payment.

Minimise finance applications:

All financial applications, whether it’s a mortgage, car insurance or even a phone contract, go on your file. Taking out a huge amount of applications may look bad, so keep them to a minimum in the months before applying for a mortgage.

Speak to a mortgage broker

If you are a first-time buyer, it is best to talk to a professional mortgage broker about your options. Get in touch to find out how we can help you.

Why Sussex Mortgages

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