The mortgage process can be intimidating for a first-time buyer, but it is no different than for someone purchasing a second or third home. When it comes to buying a home, everyone has a different experience as some say it’s the most stressful time of their lives, while others have no problems at all. 

When referring to a ‘Agreement in Principle’ it is the first step in the mortgage application process. It confirms the amount you can borrow based on your income and outgoings in comparison to the mortgage you need. It is still dependent on complete lender underwriting, but it is only the agreement before the full mortgage application is submitted.

When it comes to referring to first time buying and how much they are able to borrow Individual circumstances vary, but ‘Help to Buy’, for example, will allow you to borrow up to 4.5 times your income, with some lenders allowing you to borrow up to 4.9 times your income. It is best to consult with a mortgage broker who will be able to assist you by incorporating your income, outgoings, purchase price, and loan to value ratio to evaluate how much you may borrow. However, what people fail to consider is that they have other credit obligations. They may have a credit card, a personal loan, or a higher purchase on a car loan which then may affect their borrowing ability.

First-time buyer deposit requirements vary depending on the scheme, with some offering 5% deposit options, while others offer mortgages with the same deposit requirement. A larger deposit generally results in lower interest rates and monthly mortgage payments. A 10% deposit is recommended as it often results in a considerably lower interest rate than a 5% deposit, resulting in substantial savings in the long term. It is advisable to pay a larger down payment if possible.

Knowing and improving your credit score is essential for obtaining a mortgage. A low score will limit the amount you can borrow, and late payments on bills or loans could raise concerns for lenders. Equifax and Experian offer free or trial services to check and improve your score.

Help to Buy is a government scheme for first-time buyers that allows a lower deposit on newly built properties, with a government loan for 20-40% equity that is interest-free for the first 5 years. Shared ownership is another option, where buyers own a portion of the property and pay a mortgage plus rent on the remaining percentage.

When buying a house, the main payment you will face is Stamp Duty, which is a land tax paid upon finalisation of your home purchase. Other fees include product fees for mortgage acceptance, conveyancer searches, and surveys to check for structural problems. There are three types of surveys: mortgage survey and valuation, homebuyer’s report, and structural survey. Insurance options such as life insurance and buildings/contents insurance are also recommended for peace of mind.

In short, brokers can save time and money compared to going through a bank. Profile Capital helps clients secure their property faster, processing mortgage loans within 24-48 hours of receiving all necessary paperwork.