A better First Time Buyer Mortgage with HiP

At HiP we allow you to raise the deposit for your house by selling shares in the equity, we give you full access and control over your property finances, you will never be penalized for late payments or payment breaks, you can trade your equity real-time to raise money whenever you needed it, and we allow you to raise the money needed to buy the property you want from multiple investors. Ready to find out more?

    

Tips for First Time Property Buyers

How do you get a first time home buyers loan?

Buying your first home is an exciting but challenging time. Getting the keys to your house can be overwhelming, complicated and a lengthy process.

From saving up a substantial deposit to understanding the range of different mortgages on offer, there’s a lot to take in. And there’s also the important question of whether you tick all the boxes in order to be approved for a mortgage in the first place.

What are the problems facing first time buyers?

It is widely agreed that property is one of the most reliable sources of investment. Most homes increase in value, build in equity and provide capital for the future. So we think it’s a great idea to own a house, if you can. However, now more than ever, first time buyers are finding it difficult to get on the property ladder. It is understandable that the banks needs to feel assured that you’re in a safe enough position to not default on your repayments, after all we’re talking about a loan of hundreds of thousands of pounds, but looking at the bigger picture, first time buyers have a lot stacked against them.

Firstly, in 2008, the UK experienced one of the worst global financial crisis since the 1930s. Which led to years of austerity, rising house prices, tighter mortgage restrictions and a greater disparity between income and expenses. In short, you are part of a generation in the UK that has effectively been priced out of the property market.

Some of the requirements for a standard first time mortgage include:

Large deposit

A deposit of over £20,000, plus money to cover stamp duty costs, mortgage arrangement fees and legal fees.

Job security

A steady income, preferably in full time employment, with yearly earnings that satisfy mortgage lenders

An immaculate credit history

Any late bill payments, old credit card dept or defaulted monthly payments will significantly reduce tour chance of getting a good mortgage deal.

HOW DOES A FIRST TIME MORTGAGE WORK?

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Setp 1

Usually, in order to start the process of buying a house, you need to determine how much you can afford. You can speak to a mortgage advisor or get a rough estimate from a mortgage calculator. The amount you will be offered to borrow will be based on the income of your household, either as a single person or a couple. This will take into account any overheads, like credit card bills and childcare costs. Your monthly repayment amount must be a realistic amount in relation to your income, you need to know that you can pay this amount back each month without any trouble.
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Step 2

The next step would be to get pre-approval for a first time home buyers loan. This is also called an Agreement in Principle, or AiP. This is your lender of choice stating that you have qualified for a mortgage, and the amount agreed.This will give you a clear idea of your budget.
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Step 3

One you have an idea of the amount you have to play with, you can start looking at houses. Making the decision about what type of house to live in and in what location can take some time. Once you’ve found a property, you may also be in competition with other potential buyers. However, first time buyers are an attractive prospect for estate agents and home sellers, as you won’t have the complications of another house to sell.
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Step 4

Once your offer is accepted, you need to decide on the following; The type of loan – whether you want a repayment or an interest-only, Mortgage type – you will generally be offered a few choices: tracker, fixed rate as well as any possible first time buyer schemes you may qualify for, Mortgage rate – this will allow you to work out the monthly repayments on your loan, Mortgage fees – make sure you understand any fees that could incur if you swapped mortgages before the deal ends.
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Step 5

The next step is to apply for the mortgage. In England and Wales, this is done once your offer has been accepted. In Scotland, it is done before as you’re legally bound once your offer is accepted. At this point, you will need to provide an array of documents to prove your income and expenses.
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Step 6

Hire a solicitor and/or conveyancer to help you with the legal side of buying your house. Conveyancers are usually less expensive than solicitors, but if you require help with anything beyond property issues, a solicitor will be required.
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Step 7

Organise a survey. This deals with the structural health of the house and will highlight any problems the property may have – ie, roof, damp issues, any subsidence etc. In the meantime, your mortgage lender will carry out a valuation of the house. Once the valuation and survey has been approved, your solicitor will provide a contract with all the purchase details on it. You and the seller will sign this, which is the process otherwise known as ‘exchanging contracts’. At the point, you will need to transfer the deposit to your solicitor.
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Step 6

A date is agreed for the sale of the house. On that date, the mortgage amount is transferred to the solicitor and the purchase is complete. This is ‘completion’, the keys will then be ready to be picked up from the estate agent or solicitor.
WHAT WE AIM TO DO

How HiP Finance can help first time home buyers

HiP is a completely radical way of looking at house buying. We think differently about property and finance.

HIP LIKES TO DO THINGS DIFFERENTLY

We believe that it’s up to you to decide how much you want to borrow – not banks or mortgage lenders.

HiP throws out a life line for new property owners

We help first time buyers create an affordable financial package when buying a house, which can also include third party investors to reduce the initial cash outlay. This means that you, as a first time buyer, get onto the property ladder without facing the usual obstacles. And it also means you have more scope in terms of the type of house you live in.

AND THERE’S MORE…

HiP Finance provides an interest-only loan which can be repaid monthly in equity or cash. Unlike a traditional mortgage, there are no penalties for early repayment of loans or extended loan periods. But the real game changer about HiP is that we believe it’s your choice to access the money stored in your property – your equity.

HOW YOU BENEFIT WITH HIP

HiP is the NEW Way
to finance property

HiP Property: Our Aims

Reinvent the way you look at property investment

HiP is hugely beneficial to property owners, changing the way we can use bricks and mortar into something with far more fluidity than ever before. It is a debt and equity exchange, with investors all over the world interested in putting their money into property.

Turn Your Property Into a Bank Account

For you, this means a democratised property market; withdraw money from equity without moving, borrowing or losing ownership, use your equity to cover your monthly mortgage repayments, or trade your equity against your mortgage.

Flexibly in the high-yield property markets without limits

We allow you to do all this, and much more, without the penalties, costs and charges that a traditional lender would impose. Whatever your property investment or finance needs may be, HiP is on hand to help you take your next step.

HiP is regulated by the FCA

HiP UK will be regulated by the FCA*

And have an agreed licence for trading in the UK and Europe. *As we go live these permissions are being reviewed.

HiP is based in London

HiP UK is based in London.

HiP's 20+ staff operate from Camden, London. With registered address in Bristol.

HiP is award winning

HiP is award winning

We have won an awards and been shortlisted for more. We came second in the worldwide PropTech Innovation Awards and as Bronze in the Digital Impact award 2017 for “Best use of digital by sector”.

What people are saying about HiP

HiP is creating a buzz in the property world, but especially in the first time buyers market.

"Hip has incredible potential. It brings accessibility and transparency to the property market for owners, occupiers, investors and developers, and allows them to take control and leverage the balance of their debt to equity to their own advantage."

Paul Danks,

Newmark Grubb Knight Frank

“HiP could solve the UK housing crisis”

 

Peter Bill,

Author of Planet Property

"It’s a game changer, and a very exciting one."

Sophie Eastwood,

Global board director of Young Entrepreneurs in Property (YEP) and founder of specialist property PR consultancy, Holistic

Register your interest

Just fill out the form on this page now, and you’ll be the first to find out about HiP, which we are busy creating. We can’t wait for you to join the property revolution.

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Frequently Asked Questions

ARE THERE ANY PROGRAMS TO HELP FIRST TIME HOME BUYERS?

There are several government programs which have been introduced to ease the way for first time buyers to get on the property ladder. These include:

Help to Buy Equity Loan – where the government provides you with 20% of the property value to go alongside your 5%.

Note that this in an interest-free loan for five years, and in year six, a loan fee of 1.75% will kick in, and will increase at the retail prices index plus 1% every year thereafter.

The Help to Buy Equity Loan is only available on new-build properties in England worth up to £600,000. The scheme will remain open until at least 2021, but there is no Help to Buy scheme available in Northern Ireland.

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WHAT IS THE BEST MORTGAGE FOR A FIRST TIME BUYER?

The best mortgage for a first time buyer will generally depend on their circumstances, but will inevitably rely on the low bank rates in the UK at the moment – making mortgages relatively cheap. For those struggling with deposits, there are a number of mortgages at 95% and even 100% to help get you on the ladder. HiP can help first time buyers own property without the usual higher rates and hidden catches.

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WHAT’S A REALISTIC DOWN PAYMENT PERCENTAGE FOR A FIRST-TIME HOME BUYER?

Most mortgages require a deposit which is equal to 5% – 20% of the property’s value. The higher the deposit, the better the range of mortgage deals you will have access to.

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WHAT IS THE BEST ADVICE YOU CAN GIVE TO A FIRST TIME HOME BUYER?

It’s important to bear a few things in mind when you’re looking to buy property as first time buyer. These include:

Put aside as much money as possible – You’ll need money, not just for your deposit, arrangement fees and solicitor costs, but you’ll also require a buffer for repainting and furnishing your home, as well as any other jobs that need doing in order to keep the house well maintained. If possible, it’s a good idea to try and have some money put aside for an emergency fund, for when the boiler breaks, or a roof tile needs replacing etc.

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WHAT ARE THE PROBLEMS FACED BY FIRST TIME HOME BUYERS?

First time home buyers can find the whole process of buying a home incredibly difficult. Some of the main problems include:

Being approved for mortgage – you need to have a good credit score and be on a certain income in order to be approved for a decent mortgage.
Saving up for a deposit – saving up to 20% of a property’s value – while still paying rent and the normal overheads, may be very difficult for many people

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HOW DO YOU GET A FIRST TIME HOME BUYERS LOAN?

The best place to go for information on the best home buyers loan is an independent mortgage broker. These individuals are not tied to any organisations so will offer you impartial advice that suits your situation.

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WHAT ARE PERKS FOR FIRST TIME HOME BUYERS?

From a buying point of view, first time buyers won’t be in a chain or have a property to sell, so therefore an attractive prospect for anyone selling their property. This means there are no ties, and the process will be a lot speedier.

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ARE THERE ZERO DOWN PAYMENT OPTIONS FOR FIRST TIME HOME BUYERS?

Yes 100% mortgages do exist, but they’re not common. 100% mortgages allow you to borrow the entire amount without putting down a deposit, or down payment. This is right for someone who has no savings, however they are not widely used as, in the eyes of the lender, there is a high level of risk involved.

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WHAT IS A FIRST TIME BUYER HELP TO BUY MORTGAGE?

The Help to Buy scheme is a government initiative which was launched in 2013 and runs to 2020. It was put in place to help anyone struggling to save for a deposit on their first home, or for people having problems moving house due to insubstantial equity.

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HIP INTERACTIVE PROPERTY LIMITED.,
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6 Bayside Road, Gibraltar, GX11 1AA.
Company # 116550.

HIP INTERACTIVE PROPERTY UK LIMITED is registered in the UK, and adheres to The Standards of Lending Practice.

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