BEST Mortgage Deals For First Time Buyers
Buying your first home is a huge financial step, so it shouldn’t take place without a lot of consideration. Plenty of time should be spent weighing up the best first time buyer mortgage deals on offer to you, and seeing what suits your circumstances short term as well as long term.
5% deposit mortgages
Saving up the deposit can be very difficult for first time buyer so low deposit deals can make it easier to get on the property ladder
The Lender will give a lump sum of cash to the new borrower, helping them with up front costs such as moving and furnishing.
The government provides a number of schemes through which they contribute a % of the property price, to help new buyers get onto the property ladder.
A savings account where you can put money aside for your mortgage, and the government will contribute 25% of whatever you manage to save, up to £12, 000.
Getting the best first time buyers mortgage for you
As someone about to get on the property ladder, there are a lot of mortgage deals for first time buyers that will stand out. Some of the things that will be on offer will include:
– 5% deposit mortgages
– Cashback mortgages
– Housing schemes
– Tax-free ISA
So how do you know you’re getting the best mortgage deal for you as a first time buyer? Shopping around, weighing up options and research are the only ways that you’re going to find out. Taking on a mortgage is a big deal, so you need to have a good idea that your circumstances are conducive to such a responsibility.
What are the pros and cons of these first time buyers mortgage deals?
There are many different types of deal – all with the intent to get you as a first time buyer on the property ladder – by hook or by crook. For some people, they provide an invaluable leg up to owning their first property, however, there are certain disadvantages to the deals. For example:
5% deposit mortgages – Of course, the deposit can be one of the hardest things to amass for a first time buyer. So, when there are lenders willing to give 95% mortgages, then it’s an obvious draw to someone saving up as much as possible. However, this will only leave the borrower with heavier mortgage repayments each month, so as a short term measure, it’s great – but longterm, not so much.
Cashback mortgages – these are simply mortgages where the lender gives a one-off lump sum payment to new borrowers. This cashback may seem like free money, but it is just added on to the interest paid by the borrower.
Housing scheme – there are many housing schemes around, which you can read more about here. They all follow the simple premise that as a first time buyer, you contribute x-amount of money, and the government will contribute extra. These work on the proviso that you pay back the government at some point in the future, either through monthly repayments or the sale of the house.
Tax-free ISA – these are a painless option for first time buyers. Simply open a Help to Buy ISA with your building society or bank and squirrel your savings away. The promise being that the government will chip in 25% of whatever you put in – but the maximum you can save is £12,000 which works out an extra £3,000 over five years. It’s worth noting, though, that this extra money from the government cannot be put towards the deposit, instead it can be used for mortgage repayments.
"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,
“HiP could solve the UK housing crisis”Peter Bill,
"It’s a game changer, and a very exciting one."Sophie Eastwood,
HiP for first time buyers
SO WHAT DOES HIP DO THAT TRADITIONAL LENDERS AND THE GOVERNMENT DON’T?
HiP has reworked the property market to make it more accessible and more democratic financial system. In its current model, property is difficult access, expensive to own and property wealth is frozen until you sell it.
WITH HIP, YOU CAN get more
HiP allow first time buyers an opportunity which has never been offered before. Imagine being able to own a property that was previously regarded outside your budget. Sounds outlandish? It’s not, and it’s happening across the UK right now.
So how does it work?
Imagine you have seen the house of your dreams on sale for a price that the lenders will not provide you a mortgage for. In this scenario, HiP works like this: We link up people who want to invest their money in property with people like you who want to own their own house. This means our investors can put money into the house you’d like to live in, making up your shortfall. You can keep these investors on or you can pay off with the equity that increases in your property. This equity can also be used as liquidity – you can use it to pay off debt, or pay for work on the property.
HiP has started a property revolution
We are using the real value and wealth of property to its full potential, and allowing first time buyers to get on the property ladder easily and successfully – how owning a house in the 21st century should be!
HOW YOU BENEFIT WITH HIP
HiP is the NEW Way
to finance property
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 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 UK is based in London.
HiP's 20+ staff operate from Camden, London. With registered address in Bristol.
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”.
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.
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.
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.
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.
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.
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
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.
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.
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.
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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Getting on the property ladder is a unique experience with highs, lows and a lot of waiting around. If you’re a first time buyer, get prepared with these tips.