A first-time buyer can vary in definition depending on which lender you go with, but the majority will classify you as one as long as you have never owned a property in the UK.
What are the benefits of being a first-time buyer?
First-time buyers can have a range of different benefits when it comes to getting a mortgage, depending on which lender they choose and what their credit history is like.
Some benefits include lower deposits (sometimes 0%), larger cashbacks, higher loan-to-income ratios, free valuations, and free legal advice.
How would my credit score affect it?
If you’re applying for a mortgage and want to take advantage of benefits such as a 0% deposit, only Skipton Building Society currently offers this.
However, if you fall outside their credit rating criteria, you may not be eligible for this product.
With other lenders, they offer product ranges where different products apply to different types of applicants.
If you fall into a ‘credit repair’ category, meaning you have items on your credit report that the lender doesn’t approve of, you may lose access to some benefits compared to those in the mainstream category.
Do you pay stamp duty as a first-time buyer?
For Stamp Duty Land Tax, a first-time buyer has a threshold of £300,000, meaning they can purchase their first home up to that value without having to pay any stamp duty.
Anything over £300,000 will incur a 5% charge. For example, if the purchase price is £310,000, you would pay £500 in Stamp Duty Land Tax (5% of the £10,000 over the threshold).
Some lenders are offering cashbacks to first-time buyers to cover a portion of the stamp duty paid.
What is the average deposit for a first-time buyer?
Deposit size can vary depending on your financial circumstances, there’s no one-size-fits-all. However, there are minimum requirements.
Most lenders require a minimum deposit of 5%, so for a £200,000 purchase, you’d need a £10,000 deposit. As mentioned, Skipton offers 100% mortgages, meaning no deposit is needed.
Accord Mortgages also offers an option where first-time buyers can put down just £5,000, and they will lend up to 99% of the property’s value, provided the buyer has that £5,000 deposit.
If you have a not so great credit history, some lenders may required a 15% -25% deposit a they may deem it as more of a risk.
What age do I have to be? Am I too old?
Most lenders require you to be either 18 or 21 years old to apply, but there’s no maximum age to be a first-time buyer.
As long as you’re below the lender’s maximum age limit for a mortgage and have never owned a property, you should be fine.
How do I get a first-time buyer mortgage?
Most lenders offer first-time buyer mortgages, but everyone’s circumstances are different. To get the best mortgage tailored to you and your needs, it’s best to speak with a mortgage adviser who can guide you in the right direction.
FAQ’s (Recap)
What is a first-time buyer
A first-time buyer can vary in definition depending on which lender you go with, but the majority will classify you as one as long as you have never owned a property in the UK.
What age do I have to be? Am I too old?
Most lenders require you to be either 18 or 21 years old to apply, but there’s no maximum age to be a first-time buyer.
How do I get a first-time buyer mortgage?
Most lenders offer first-time buyer mortgages, but everyone’s circumstances are different. To get the best mortgage tailored to you and your needs, it’s best to speak with a mortgage adviser who can guide you in the right direction
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