First Time Home Buyer Loan

Not every first time buyer is the same, so a first time home buyer loan can differ accordingly. Despite this, there are a couple of things to bear in mind before you take on a first time buyer loan.

    

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Can you afford the monthly repayments

Your circumstance might change in a year or two, unexpected expenses might eat away at your monthly budget, have you got enough reserve to pay off the mortgage each month?

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How much of a deposit do you have

You will need at least 5%, but the higher the better, and the amount of deposit you save up will significantly affect the range of properties you can afford.

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How long will it take

The property buying process is a lengthy one, with unexpected hold ups often coming up. It is important to keep this in mind and be patient!

So how do I know whether I’m right for a first time buyers loan?

This is a huge financial step, but one which has enormous gains.

Before you get on the ladder, you should consider the key aspects of home buying.

It’s important to consider other things when you’re looking to buy.

Affordability

A mortgage lender will approve you if you fulfil certain criteria. Your annual earnings, your employment status and your credit history are all considered in the process. They make a decision whether you’re eligible. Once you’re approved, you also need to make sure that you’re earning above a certain level in order to not only afford the repayments, but also any repairs and maintenance that go along with owning a house.

Deposit

The deposit is the amount of ready money that you have to put down on the house to secure it. This stake in the ground is taken off the overall cost of the house, so the larger the deposit, the less you have to pay back. It’s well recommended to come up with as much as possible, but as a first time buyer amassing that amount of money can be difficult.

Length of time

With so many variable involved in the property market, buying a house can take a long time. However, one of the benefits about being a first time buyer is that, as long as you have your finances in order, you’re not going to be responsible for any hold ups. Delays can occur with the seller, the banks and solicitors, so bear in mind that the length of time waiting to move in can easily increase. Patience is key!

The condition of the house

If a house is in a less than great condition, it’ll be considerably cheaper. Your decision is whether you have the time, finances and patience to take on a “doer-upper”. The upside is that it’s an affordable blank canvas for your vision, the downside is that it will take some money for repairs, renovations and refits – and your home will resemble a building site for a considerable amount of time.

The area you live in

Close to good schools, parks, amenities and transport links are all on the wish list, but it will come at a price. Live in a less than salubrious area, and prices will be cheaper. But choose wisely, and you could move into a town that is on the cusp of being the next hotspot to live in, attracting businesses and families – and generating good price increases!

Carry out a survey

Even if you fall in love with what looks like the perfect house, you should always carry out a full survey, especially if it’s a period property. A survey takes place to check the state of the structure, identifying defects as well as carry out a property valuation. Paying around £400 for a home buyer’s report could save you a massive amount of money in the future.

HiP for first time buyers

So how can HiP help me when I am applying for a first time home buyer loan?

HiP provides an invaluable service for anyone about to own their first home. Once you have been approved for your mortgage, we can work alongside you in a number of ways.

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It can also act as an emergency fund for any maintenance and repair work on your lets. You can also open up your new house onto the hip exchange and trade equity with a network of investors. This flexibility allows you to be able to comfortable maintain your houses, with the security of rental income and increasing equity that you can count on on a rainy day.

THIS EQUITY CAN PROVIDE A DOWNPAYMENT ON YOUR BUY TO LET PROPERTY

And you can do all this without selling or going through a lengthy remortgaging process

WHICH CAN ALLOW YOU TO WORK WITH PROPERTY THAT WAS PREVIOUSLY DEEMED OUT OF YOUR PRICE RANGE

This democratisation of property ownership can mean less risk, more ease, less worry and more choice – which means your life as a property landlord has become a lot simpler.

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.

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

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”.

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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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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