First Time Buyers

If you are ready to become a homeowner, now is the time that you need really, really good advice!

Whether You Are Excited or Terrified, or a Bit of Both!

At Willowlace Ltd, we want you to be well-informed buyers, with information which will help you through your lifetime of being a homeowner.

We will take the time to ensure that you know the pro’s and con’s of the different elements of your mortgage, so that you can make the right decisions for you. Sadly, you won’t get this help and advice from a bank direct!

Whilst there are lots of options to get onto the ladder for First Time Buyers, it is important that you have a Mortgage Broker who can help you understand and compare all the options which are available to you.

There is a lot of jargon in the mortgage market, so please refer to our Glossary if you are unsure of any of the terminology.

1. You Have Saved a Deposit

For most First Time Buyers saving for a deposit can be quite a struggle, particularly if you are renting, but some of our First Time Buyers have managed to do just this! The more deposit you have available, the lower the Loan to Value which will give you access to lower rates of interest and more products.

2. Professional Mortgages

There are some lenders who are more generous for young Professionals. So, if you are a doctor, accountant, solicitor etc then you may have access to these products.

3. Help from the Family

This can come in the form of a monetary gift, acting as Guarantors, owning the property with you, standing on the mortgage but not on the Deeds, or putting funds into a savings account with a Lender in case you don’t make your mortgage payments.

Debbie was extremely enthusiastic and dedicated to finding us a mortgage that suited our unique situation and one which met our needs.
She approached us in a friendly and understanding manner which made our first experience of buying a house as painless as possible.
Mr H & Miss J
Exeter

4. Help to Buy Equity Loans (also available for Home Movers)

With a Help to Buy Equity Loan, you can add to your deposit on a NEW BUILD home, and by making use of the Equity Loan you will need a lower mortgage amount, which means that you will be able to choose from a wider range of mortgage deals. You will need to provide at least 5% of the purchase price of your property, although you can provide more if you wish to. In the UK, the Government then provides up to 20% of the purchase price (15% in Scotland).

For the first 5 years after buying your home, you will not have to pay any interest on the Equity Loan. After 5 years, you will pay interest of 1.75% which will rise by the Retail Price Index each year. If you have not paid it off before, the Equity Loan must be repaid when the property is sold or when the mortgage is paid off.

www.helptobuy.gov.uk/equity-loan/equity-loans

www.gov.scot/policies/homeowners/help-to-buy

5. London - Help to Buy Equity Loans (also available for Home Movers)

These work in a similar way to the Help to Buy Equity Loans above, but the Government will provide up to 40% of the purchase price.

www.helptobuylondon.co.uk

6. Shared Ownership

Shared Ownership is a way to buy a share of a property in which you wish to live. You will need to contact the Housing Associations which offer Shared Ownership, and register with them so they can check you are eligible, but you are free to use your own Mortgage Broker.

  • You buy between 25% and 75% of the property from a Housing Association, and you rent the rest of the property, paying this to the Housing Association on top of your mortgage payments.
  • You can buy more of the property later on, but the price will be based on the market value of the property at the time you wish to do this.
  • Affordability will be calculated based on both your mortgage and rent payments.
  • When you come to sell your home, the Housing Association has the first option to buy it from you. Even if you own the property 100%, the Housing Association retains this option for 21 years.

www.helptobuy.gov.uk/equity-loan/find-helptobuy-agent

www.sharetobuy.com/shared-ownership-london

Other Useful Resources for First Time Buyers

Help to Buy ISA

If you opened an account prior to 30th November 2019, this can be a great boost to your savings.  This won’t be available to new savers after 30th November 2019. (see Lifetime ISA below.)

Investigate the details here: www.helptobuy.gov.uk/help-to-buy-isa/how-does-it-work

Stamp Duty

If everyone who is party to the mortgage is a genuine First Time Buyer (ie have never owned a property anywhere in the world), then there you may benefit from a reduction in Stamp Duty, or there may be no Stamp Duty to pay whatsoever.

www.stampdutycalculator.org.uk

Lifetime ISA

This is available to help you save for a mortgage deposit to buy a home.

Investigate the details here: https://www.gov.uk/lifetime-isa