First-time buyers: How to get the mortgage

Choosing the right mortgage product

Being a first-time mortgage borrower, there are plenty of options open for you, out of which the best mortgage deals can be picked. Approaching a mortgage broker will help the buyer learn more about which deal best suits their needs and can meet the respective lender through the agent. Mortgage types depend on the varying or fixed interest rates and the mortgage loan settlement methods. Accordingly, the mortgage types are classified as fixed-rate, variable-rate, discount mortgage, tracker mortgages, capped rate mortgages, offset mortgages and more. Many brokers in the country provide the best deals and help close a hassle-free transaction.

The lender’s valuation

Once the mortgage type is chosen, the lender will assess whether the buyer is eligible to borrow. Some criteria fall under the first-time buyer mortgage that has to be fulfilled before applying for it. Next, the mortgage lender evaluates whether the buyer is eligible to repay the mortgage loan on a long term basis. The lender will verify the credit score, employment proofs, income certificates and other legal documents before approving the home mortgage. If all the papers are kept handy, the complete process can be executed without confusions and complexities.

Ready down payment

A small deposit amount, otherwise known as a down payment, has to be paid to the lender upfront. Buyers should make sure to start saving up for down payment even before their property hunting begins. The down payment of any home in the UK ranges from 5% to 10% of the total property price. The loan to value (LTV) of a property purchased for the first time can be up to 95%. In addition to this, first-time buyers are exempted from stamp duty until 30th June 2021 on their first property purchase worth £500,000. Post-June 30th, property values up to £300,000 need not pay stamp duty, and others exceeding this rate should pay about 5%.

Complete the miscellaneous works

The lenders will inspect the respective property before approving the mortgage amount the buyer has approached for. After being qualified for a home mortgage by completing few procedures, the buyer can apply for the mortgage loan. Usually, it takes up to six weeks for the application to get approved if all the required legal papers are submitted. Some of the best brokers in the UK can help first-time buyers to meet mortgage advisers to discuss the finances and the repayment methods.

The final phase

Once the application is completed, the buyer can track its progress with time. The lenders might contact the buyer for other requests regarding the application or mortgaging process from time to time. The owner of the property will provide a particular date for buying the said property to the mortgager. After the final date, the home mortgage amount will be settled by the lender to the owner of the household to complete the property purchase.