First Time Buyers Factsheet
Your first mortgage is one of the biggest commitments you will ever make, and many first-time buyers find the process daunting, but it doesn’t have to be. This factsheet makes the process easy to understand and explains everything you need to know about buying your first home. At Jordan Lynch we are here to help you with every step of the way and offer independent whole of market mortgage advice. This means we can find a mortgage tailored to your individual circumstances.
How much deposit do I need?
Typically, you will need a minimum of 5% deposit to purchase a property. The larger the deposit you can put in the more options you will have with your mortgage. If you don’t have a deposit saved yet and wish to purchase, there are options available that we can potentially help with.
How Much Can I Borrow?
This all depends on the size of your deposit, age and income. Use our online calculator to gain an estimate of how much you can borrow. Please be aware that this approximation can vary depending on the lender and your outgoings.
How much will I pay each month?
This can be tailored to your current circumstances and will depend on how much you can afford, the loan amount, over how many years and the interest rate. This is a good question because it is important to choose a mortgage that you can comfortably afford. The monthly repayments will depend on how much you borrow, the number of years you wish to borrow the money for and the interest rate. Use our mortgage cost calculator for an estimate of how much you will pay each month.
Jordan Lynch will detail all costs for you before your application. This allows you to clearly see the amount you will pay in fees, repayments and interest so you can budget accordingly.
How Do I Apply for a Mortgage?
The first step is obtaining a mortgage agreement in principle from your chosen lender. This tells you how much they are willing to lend you, based on the information that you provide. Typically, Jordan Lynch can have an agreement in principle in place for you within a few hours, this will then allow the property search to commence!
When you have found the perfect home, a full mortgage application can be submitted. At which point an underwriter will look at documentation provided by you, such as pay slips and bank statements. This is a more in depth look at your personal and financial position, a property valuation is also normally booked in at this stage. Once the lender is satisfied with all aspects of the case, a mortgage offer will then be issued.
What other costs are involved with buying a home?
Stamp duty is a form of tax that becomes payable when you purchase land or property in England or Northern Ireland. If you are purchasing in Scotland this is referred to as Land and Building Transaction Tax and in Wales Land Transaction Tax.
For a first-time buyer purchasing a property £500k and under, you won’t pay any stamp duty of the first £300k. Between £300k – £500k you will pay 5%.
A first-time buyer is someone who’s never owned a property, whether bought or inherited, anywhere in the world.
If you fall outside of the above definition, then the following would apply:
|Band||Normal Rate||Additional Property|
|* An additional property purchased for less than £40k will attract 0% tax. For purchases from £40k to £125k the rate will be 3% on full purchase price.|
|less than £125k||0%||3%*|
|£125k to £250k||2%||5%|
|£250k to £925k||5%||8%|
|£925k to £1.5m||10%||13%|
|rest over £1.5m||12%||15%|
› Deposit To get a mortgage you will need a minimum 5% deposit, for example on a property worth £150k you would need a deposit of £7500.
› Mortgage application and product fees these vary and can generally be added to your loan.
› Valuation fee – Some lenders charge a valuation fee upfront before committing to lending you the money
› Optional Homebuyer’s Report or Full Structural Survey – You may decide to pay for a more detailed survey on the property. This is for your own peace of mind and comments on any future maintenance or works that may need doing
› Legal fees – There will be a solicitor’s fee plus the Land Registry charge and a fee to transfer the money.
› Moving costs – Hiring a van, hiring help, buying packaging materials etc
› Building and contents insurance – It is a condition of your mortgage to have adequate buildings insurance in place, buildings insurance covers the cost of rebuilding your home if it’s damaged. We can offer you a quote from our panel of 5 star defaqto rated insurer’s