First Time Buyer Guide
First-time buyer mortgages work like other mortgages, but they are designed specifically for people who are buying their first property. The main difference is that first-time buyer mortgages may have more favourable products, enhanced income multiples, and require a smaller deposit, making it potentially easier for people with limited savings to get onto the property ladder.
To be eligible for a first-time buyer mortgage, you will need to meet certain criteria set by the lender, such as having a good credit score and meeting their affordability requirements. You will also need to provide evidence of your income, outgoings, and savings.
The amount you can borrow will depend on your income, credit history, and the value of the property you want to buy. Most lenders will offer you a mortgage up to a certain percentage of the property’s value, usually around 95%, but this can vary between lenders.
What is an Agreement in Principle, or AIP?
An Agreement in Principle (AIP), also known as a Decision in Principle (DIP), is a certificate or statement from a mortgage lender that indicates how much they are likely to lend you, based on an initial assessment of your financial situation. Here are some benefits of obtaining an AIP:
- Help with property search: An AIP can help you narrow down your property search by giving you a clear idea of how much you can borrow. This can help you avoid wasting time looking at properties that are out of your price range.
- Increased bargaining power: Having an AIP can also give you more bargaining power when it comes to making an offer on a property, as it shows the seller that you have already been approved for a mortgage up to a certain amount.
- Streamlined application process: Once you have an AIP, the mortgage application process may be streamlined, as the lender has already assessed your financial situation and is familiar with your circumstances.
- Reduced stress: Knowing how much you can borrow and having an AIP in place can also reduce stress and uncertainty during the property buying process.
In terms of validity, AIPs are typically valid for around 30 to 90 days, depending on the lender. However, this can vary depending on the lender and the specific mortgage product you are applying for. If you don’t find a suitable property within the validity period, you may need to apply for a new AIP. It’s important to note that an AIP is not a guarantee that you will be approved for a mortgage, and the lender will still need to conduct a full assessment of your financial situation before making a final decision.
How much can I borrow?
Several factors can determine how much you can borrow with a mortgage, including:
- Income: Your income is a key factor in determining how much you can borrow. Lenders typically use a multiple of your annual income to calculate the amount you can borrow. This multiple can vary between lenders, but it’s usually capped at around 4 – 5 times your income.
- Employment status: Lenders will want to see that you have a stable source of income and may ask for proof of employment, such as payslips or a letter from your employer.
- Credit score: Your credit score can affect how much you can borrow and the interest rate you are offered. Lenders will look at your credit history to assess your ability to repay the mortgage.
- Outgoings: Lenders will also consider your monthly expenses, such as bills, loans, and other debts, when assessing how much you can borrow.
- Deposit: The amount of deposit you have can also affect how much you can borrow. The larger your deposit, the less you may need to borrow, and lenders may offer you more favourable interest rates.
- Interest rates: The interest rate you are offered can affect how much you can borrow. Higher interest rates mean higher monthly payments, which can affect the amount you can borrow.
It’s important to keep in mind that each lender may have their own criteria for determining how much they will lend, and the factors they consider may vary. Additionally, it’s always a good idea to seek professional advice from a mortgage broker to help you understand your borrowing capacity and to ensure that you are getting the best possible deal.
Do I qualify as a first-time buyer?
When it comes to paying stamp duty, a First-Time Buyer (FTB) is defined as someone who has never owned a property before. It’s important to note that all buyers involved in purchasing the property need to meet this criterion to be eligible for any government incentives that may be available.
However, certain mortgage lenders may consider someone to be a First-Time Buyer if they haven’t had a mortgage in the past three years. Additionally, there are mortgage options available that allow one borrower on a joint application to be considered a First-Time Buyer in order to take advantage of FTB-specific products.
When should I apply for a mortgage?
As a first-time buyer, it’s a good idea to start thinking about applying for a mortgage well in advance of when you plan to buy your first property. This will give you time to research your options, get your finances in order, and make sure you’re in the best position to get approved for a mortgage with favourable terms.
Here are some general guidelines to keep in mind:
- Start saving for a deposit as early as possible: The larger your deposit, the better your chances of getting approved for a mortgage with a lower interest rate. Aim to save at least 5% of the property’s value, but the more you can save, the better.
- Check your credit score: Your credit score will play a big role in determining whether you’re eligible for a mortgage and what interest rate you’ll be offered. Check your credit score and report regularly and take steps to improve it if necessary.
- Research different mortgage options: There are many different types of mortgages available, each with their own pros and cons. Research different options, including fixed-rate, variable-rate, and tracker mortgages, and consider what would work best for your individual circumstances.
- Get pre-approved for a mortgage: Before you start house hunting, it can be helpful to get pre-approved for a mortgage. This will give you a better idea of how much you can afford to borrow, which can help you narrow down your search.
- Apply for a mortgage when you’re ready to make an offer: Once you’ve found a property you’re interested in buying, you can apply for a mortgage. Keep in mind that the process can take several weeks or even months, so it’s a good idea to get started early.
Overall, it’s best to start thinking about applying for a mortgage as early as possible, ideally several months before you plan to buy your first property. This will give you plenty of time to research your options, get your finances in order, and make sure you’re in the best position to get approved for a mortgage with favourable terms.
How much deposit do I need as a first-time buyer?
The amount of deposit you’ll need as a first-time buyer will depend on several factors, including the price of the property you want to buy and the type of mortgage you’re eligible for.
In general, most mortgage lenders will require a deposit of at least 5% of the property’s purchase price. However, if you can afford to put down a larger deposit, you may be able to access more competitive mortgage rates and have a wider range of mortgage options available to you.
The average house price in the UK (at time of writing) is around £255,000, so a 5% deposit would be £12,750. However, keep in mind that house prices can vary significantly depending on the location.
It’s worth noting that there are some government schemes available to help first-time buyers get onto the property ladder, such as Shared Ownership. These schemes may require a smaller deposit than a standard mortgage, but they have their own eligibility criteria and terms and conditions.
How much is Stamp Duty?
As a first-time buyer in England, you may be eligible for a reduced rate of Stamp Duty Land Tax (SDLT) on the purchase of your first property. The amount of SDLT you’ll pay will depend on the purchase price of the property.
As of March 2021, the following SDLT rates apply to first-time buyers in England:
- No SDLT is payable on properties up to £300,000
- 5% SDLT is payable on the portion of the property price between £300,001 and £500,000
For example, if you’re buying a property for £400,000, you’ll pay no SDLT on the first £300,000 and 5% SDLT on the remaining £100,000. This means your total SDLT bill would be £5,000 (5% of £100,000).
It’s important to note that if you’re buying a property that costs more than £500,000, you won’t be eligible for the first-time buyer SDLT relief and will instead be subject to the standard SDLT rates.
Keep in mind that these rates and thresholds are subject to change, so it’s a good idea to check the most up-to-date information on the UK government’s website or consult with a qualified tax professional.
How can I find the right deal for me?
As a mortgage broker, Thameside Mortgages has access to a wide range of mortgage lenders and products, which means we can help you clients find the right deal for your individual circumstances.
- Initial consultation: We will have an initial consultation with you and understand your individual circumstances, including your income, credit history, and the type of property you’re looking to buy.
- Mortgage search: Based on your needs and circumstances, our team will then search the database of over 90 lenders to find mortgage products that are a good match.
- Comparison and recommendation: Once we’ve identified several suitable mortgage products, we will compare them side-by-side and make a recommendation to you based on your individual circumstances and preferences.
- Application process: Once you’re happy with the recommended mortgage product, we will then help you through the application process, including submitting the application to the lender and providing any additional documentation or information required.
- Ongoing support: Even after the mortgage has been approved, we will continue to provide support and advice throughout the term of the mortgage, helping you to manage your mortgage and making sure they’re aware of any changes or updates that could affect their mortgage, such as a fixed rate deal coming to an end.
Overall, by having access to more than 90 lenders, we can offer our clients a wide range of mortgage products, giving you a better chance of finding a mortgage that fits your individual circumstances and needs.
This can save our clients time and effort in searching for the right mortgage product themselves and can also help them get a better deal overall.
How do I prove I am a first-time buyer?
Usually, you can simply declare you are a first time buyer, but it’s important to be accurate and honest, because it’s quite easy for a non-first time buyer to be recognised:
- Declaration: Your solicitor may ask you to sign a declaration stating that you have never owned a property before. This is a legal document.
- Credit report: Your credit report will show any mortgages or loans you have taken out in the past, so if you have never taken out a mortgage or loan for a property, your credit report will reflect that.
- Land Registry: The Land Registry keeps a record of all property transactions in England and Wales. You can search the Land Registry to confirm whether you have previously owned a property.
- Solicitor’s statement: If you have used a solicitor in the past to buy or sell a property, they may be able to provide a statement confirming that you were acting as a representative for someone else and were not the legal owner of the property.
- HMRC form: If you have previously claimed the Stamp Duty Land Tax (SDLT) exemption for first-time buyers, HM Revenue and Customs (HMRC) will have a record of this.
It’s important to note that the requirements for proving that you are a first-time buyer may vary depending on the lender or mortgage product you are applying for. It’s best to check with your lender or mortgage broker to find out what specific evidence they require.
The Financial Conduct Authority does not regulate building surveyors.
Thameside Mortgage Ltd are not regulated by The Royal Institution of Chartered Surveyors, we do not have any involvement in the provision of this type of service / activity. We are not qualified surveyors and the information provided on this website is for informational purposes only. The information provided is not intended to be a substitute for professional advice, inspection, or survey.
It is important to seek professional advice and to undertake a proper survey/inspection before making decisions or taking actions related to a property.
What Our Clients Are Saying
Thank you to Thameside Mortgages to Laura and Andrew, helping me get the mortgage, they were both very professional. The mortgage was smooth and efficient. I had difficulties with the solicitor, but Laura and Andrew have been there to support me throughout. I will definitely be in contact for a future mortgages. Happy to recommend to anyone.
Thameside mortgages made getting a mortgage so easy ,even for a tech phobe like myself Laura was so professional ,always their to answer any questions I was kept up-to-date through the whole process ,no stress at all Would recommend to anyone ,5 * isn't enough Massive thank you to Andrew & Laura Well done
Thameside were amazing! Made the process completely stress free and felt informed throughout. I’ll go with them every time.
We’ve been using Andrew for over 10 years, the service, knowledge and expertise he provides is exceptional! From our first time mortgage to re-mortgage, Andrew has always obtained extremely competitive rates vs what you would find on the market and is extremely responsive throughout the process. We also have our life insurance policies with Andrew, which we have found to be incredibly competitive. All around a great team and I would highly recommend Thameside Mortgages to anyone.
I am so glad that we worked with Thameside Mortgages for the purchasing of our first home. From initial enquiries, guidance whist making an offer on the house, to getting a mortgage offer & insurance options, we cannot fault their service! Jason always made us feel informed, in control and aware of all our options. 10/10 and we would definitely recommend to our friends and family! Thameside eliminated all the fears & stress we thought we would have, and made the experience easy and clear. Thank you very much!
Huge thank you to Andrew, Laura & the team for all their help in sorting out my sons remortgage. In what was an extremely difficult time for us as a family they went above & beyond to make sure everything was dealt with quickly & efficiently, searching the market to obtain the best possible deal for him. Highly recommend their service & Andrews knowledge was an absolute godsend. Thank you all once again for the excellent service, we will certainly recommend you as often as possible 😊
Andrew and his team were so helpful, quick and professional and once we moved into our new home they sent us the most amazing welcome gift. I can highly recommend them to everyone. A massive thank you for making our mortgage process for our first home so smooth and easy!
We brought our first home nearly 2 years ago, we had Jason Harris as our advisor. I can’t put into words how much he helped from the very first call to present day with our remortgage and life insurance. Jason has been incredible from the get go, it felt as though we didn’t have to do anything really, as he found everything for us and gave multiple options so all we did was say yes or no. He broke everything down and explained things in such a simple way for us to not get too overwhelmed. He made everything feel stress free and simple, as well as finding us an incredible offer twice he has also found cheaper life insurance policies for us which is something I didn’t even think to do, he has saved us £100’s of pounds overall with our new offers. Really appreciate having him as our advisor and he’s a really helpful and lovely guy. Thank you Thameside & Thank you Jason.
Andrew and Laura were attentive to all our needs and gave us all the facts to help us make informed decisions. They were more than happy to answer our many many questions and always did so in a very timely manner. We had some issues with our solicitors taking too long to action paperwork but both Andrew and Laura chased things up on our behalf. The support and guidance along the way was definitely appreciated. We shall definitely use Thameside Mortgages again!
Brilliant service from start to finish. Andrew and the team were friendly, knowledgeable and available at every step of the way during the remortgage process ensuring it went smoothly and were always available to help. Would thoroughly recommend.
Excellent service. Helped me through the process of finding best mortgage deal. Cant recommend them enough.
Having used a number of mortgage advisors in the past, I can say that Thameside were a breath of fresh air. We have an unusual situation and were told we couldn’t get what we needed from other advisors. Thameside were able to arrange a mortgage and kept us updated constantly and were available any time to discuss all the usual issues. Highly recommend to anyone looking for a mortgage.
I had a fantastic experience with Thameside Mortgages, Jason was extremely proactive throughout the entire process and was a pleasure to work with. He was very patient and knowledgeable which helped reassure me as a first time buyer, an absolute asset. All my questions were answered swiftly and he would constantly check in with me throughout what ended up being a long drawn out process. I highly recommend.
Thameside Mortgages have been fantastic. They helped me through the whole mortgage process and were totally supportive. I was not only trying to buy a house but also remortgage my old one at the same. I can t tell you how stressed I was but Andrew and Lydia were amazing and walked me through the whole process. They will always do their best to help you. Believe me you are in safe hands with them. Thanks Sharon
Andrew and the Team were not only extremely knowledgeable in their field, but extremely professional and thorough throughout the process. I can't recommend the team enough and would strongly urge engaging the team for your mortgage and life insurance management. Thank you Thameside Mortgages.
Great service from start to finish, made the whole process very smooth and easy
We used Thameside Mortgages for our mgt for our new property. We had professional and brilliant service from Andrew and his team. I would highly recommend Thameside Mortgage as they go over and above what I expected from them. Thank you so much Andrew and your team X
I couldn't recommend Thameside Mortgages enough - they helped me with my life insurance and Laura was so helpful and so patient with me! Andrew clearly has incredible knowledge and was very supportive and considerate when discussing all of my options. Laura was brilliant at following up and helping me through the process and was very quick responding to any queries that I had. Will most definitely use them again for any further business that I have, A* service - thank you so much!
I used Andrew and team 5 years ago and they were brilliant, I couldn't recommend them enough. Recently used them for my renewal and nothing was a problem and felt easy to complete. First class hassle free!!
Jason was very knowledgable and calm during the whole process and always available to answer my questions. I would definitely use Thameside again.
Andrew and Laura provided an exceptional service and my partner and I are extremely grateful for their services. They were both on hand to answer any questions or queries without hesitation and provided clear, concise and accurate information. As first time buyers and with one of us being self employed, it proved extremely difficult for us to get a mortgage (especially in a pandemic), however Laura and Andrew both went above and beyond to ensure we were looked after and for that we are extremely thankful.
Couldn't recommend Thameside Mortgages enough, both Andrew and Laura have and continue to be a huge support in the process for us. We have been kept up to date at all times, provided as much information as possible and have received helpful responses to any queries we have had. They have made a stressful process much easier and we couldn't have wished for a better service.
Andrew has dealt with our mortgage and remortgage since we bought our first home 12 years ago. The service and advice is always spot on, hence why we always return without question. It's peace of mind knowing we can trust Thameside to take care of everything and give us the advice we need.
Andrew and his team did an amazing job on our mortgage and the surrounding process. We had our offer in principle within 24 hours of contacting them. The on boarding was seamless and laura kept us updated with progress from our solicitors throughout the wider conveyancing process which means we were always well informed. I would not hesitate in recommending them to anyone
We used Thameside Mortgages for our recent mortgage application and cannot speak highly enough of Andrew and his team. They were professional and attentive from the outset and helped us through every step of the process. Andrew consistently communicated with us throughout to ensure the process was as easy and streamlined as possible, and we felt we received a completely personal service. I wouldn’t hesitate to recommend Thameside Mortgages for anyone considering a mortgage application in the future and will definitely utilise their service again.
First class and professional service. The advice given on various mortgage products, terms and insurance options were excellent. Throughout the sale/purchase they were in constant contact with my solicitor and estate agent, and kept me up to date regularly. Would highly recommend.
Absolutely the best, most helpful and speedy broker I've ever worked with - Thameside sorted everything including finding the right mortgage and insurances for me, guiding me through the applications and keeping me posted throughout the process. Particular thanks for their endless patience with me dithering over every decision, but because of their honest and clear advice, I'm completely comfortable I've made the right choices. I really couldn't recommend these guys enough!
I could not recommend Thameside Mortgages More! Andrew is always fantastic to deal with, he is always extremely responsive, supportive and helpful! Thanks to the team at Thameside and Andrew for your constant support!
I recently used Thameside Mortgages and their recommended solicitors when purchasing my property I can’t recommend them enough! Not only do I feel that I ended up with a very competitive mortgage, from start to finish the team kept me up to date on the progress of my mortgage application and the conveyancing process. They were always very quick to reply to any questions I had and I credit them with helping me exchanging contracts within just 7 weeks. Andrew, Lydia and Laura, thank you so much for all your help. I can’t thank you enough!
The team went above and beyond to help us secure the best possible rate. During what was a difficult time for us, they’ve been so supportive and empathic. Their work is delivered with pedagogy and transparency, for customers to understand relevant details and take informed decisions with confidence. I strongly recommend their mortgage services.