FIRST TIME HOME BUYER
If you’re a first time home buyer, you may have a list of questions and worries about the next big stepping stone. Buying a house for the first time has many advantages and benefits, but it doesn’t come without its problems. Some of these include: Being approved for a mortgage, securing your deposit, having the income to pay the mortgage, bills and deal with any emergency repairs and general upkeep
WHAT DO I NEED TO BEAR IN MIND AS A FIRST TIME BUYER?
In the traditional world of banking, a first time buyer should be able to present the lender with an adequate amount of cash to form a deposit, a sparkling credit score and a healthy income that will more than cover home loan repayments and maintenance costs.
Unfortunately, this is the real world, and most people starting off on the property ladder are encountering huge problems in raising enough for a deposit. Some people may have struggled financially before, defaulted on bills or taken out a payday loan. Others will be experiencing a pay freeze in their job, which means they’re not being paid in line with inflation. Meanwhile, house prices are at their highest, so unless you get help from family, or change your life drastically, getting to the point of owning your own home can be difficult.
SO WHAT DO I NEED TO DO TO IMPROVE THE CHANCES OF OWNING MY OWN HOME?
Before you apply to the bank for a mortgage, you need to look at a few things:
Credit score – there are many free online services which can provide you with your credit score free of charge. They also give recommendations on what you can do to increase it. This can be anything from making sure you’re on the electoral roll to increasing monthly credit card repayments.
Accumulate as much of a deposit as possible – saving is key to owning your own house. If you can reduce the amount you pay on rent, clothes shopping and going out each month, you can put the surplus to one side for your deposit fund. Saving for a deposit isn’t fun, but it’s all going towards owning your first home.
Looking at government schemes designed for first time buyers – Shared ownership, help to buy, high interest ISAs – there’s quite a few products on the market that can help you. Look at what’s available.
Looking at various mortgage deals – this is when you need to learn the jargon. Get to grips with tracker, interest-only, APRC and fixed rate to analyse the best rates for you. The more you know about mortgages, the better your chances of securing a good deal.
"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 WHERE DOES HIP COME INTO ALL THIS?
As we’ve learnt above, a first time home buyer with bad credit and a minimal deposit would struggle to buy a house under the current traditional lending structure. The current financial climate could easily mean a lifetime of paying high rents in a home that they have no security of staying in.
HiP has changed all that
We have taken away the restrictive specifications of what an individual needs to achieve to own a house. We have democratised the whole process and have brought it into the 21st century a bit more. We know first time home buyers are facing an impossible task under the normal rules at the moment.
THAT’S WHY WE’RE:
Leaving it up to you how much you borrow – rather than get lumbered with a mortgage you can just about afford, we let you choose an amount that suits your circumstances. You can get extra help from our network of investors who are looking to put money into property right now.
You have far more scope in the house you choose to live in, opening up new possibilities and ideas for your lifestyle. And if you experience a few months when money is tight, you can draw down on your equity (the difference in how much your house has gone up in value against how much you owe), to cover the costs of repayment.
HiP is changing the face of home owning, and opening it up to a whole generation of people who were previously priced out.
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.