26 Borrowing


More people than ever before are buying their first home and even though interest rates have increased slightly, Ray Clancy discovers that there are still plenty of mortgage deals for those taking their first step on the housing ladder


esearch from lender the Halifax shows that first-time buyers make up more than half of the property market in

the UK, accounting for 51% of sales. But buying that first home can still be a daunting process. We take a look at what a first-time buyer needs to know.

How much can I borrow? Finding out how much you can borrow is a crucial first step. It’s not as daunting as it might appear as all the major lenders have mortgage calculators on their websites. While these shouldn’t be taken as telling you exactly what you might be able to borrow, they do give you a good starting point. After all, there’s no point in finding your dream home and then discovering that you can’t get a mortgage.

Using a mortgage broker You can contact each individual lender separately and find out what deals they might have. It can be daunting with a lot of figures relating to loan-to-value (how much deposit you have), fixed deals, two-year deals, five-year deals etc. A mortgage broker might be able to

Finding out how much you can borrow isn’t as daunting as it might appear as all the major lenders have mortgage calculators on their websites

help you cut through the jargon and suggest a handful of products from which you can choose. If you’re in a position where

you’re self-employed, or don’t have a perfect credit history, then a mortgage broker may still be able to find you a deal that suits your needs.


Paperwork Getting a mortgage approval is more onerous than it used to be and lenders, quite rightly, want to make sure that you can afford to repay

your mortgage. After all, your home will be at risk if you can’t make the monthly payments. It’s a good idea to make sure you

have bank statements, a utility bill, proof of identity— such as a passport or driving licence — and a list of your major monthly incomings and outgoings. Scan them if you can as these can be sent securely to a lender online so that they can save time during the application process.

Help to Buy Because first-time buyers can struggle with high house prices, particularly in London and parts of the south of England, there are schemes that can make it slightly less onerous. Help to Buy is a government-backed equity loan scheme for first-time buyers buying a new-build home. Basically, the government lends

you up to 20% of the cost of a newly built home, or up to 40% in London. Tis means you’ll only need a 5% cash deposit and a 75% mortgage to make up the rest. Also, you won’t be charged loan fees on the 20% Help to Buy loan for the first five years of owning your home.

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