Buying your first home
Buying your home can be both an exciting and challenging time for a first time buyer. With so many things to consider, like “How much can I borrow?”, “How big a deposit will I need?”, going through the details can seem endless. With this in mind, we have put together an intuitive guide that will help you on your journey to home ownership.
Furthermore, our expert advisers are only a call away to answer any questions you have about the buying process and secure the best mortgage deal based on your circumstances.
How much will my mortgage cost?
There are 4 factors that determine your monthly mortgage payment. The mortgage amount, the interest rate, the mortgage term and whether the mortgage is on repayment or interest only basis.
Try our mortgage payment calculator. It is a great tool to estimate how much your monthly mortgage payments would be in different scenarios.
How much deposit will I need?
As a general rule, the more deposit you have, the better position you are in. This is because you would potentially have more lenders to choose from and could get a lower interest rate.
For example, if you buy from a family member at a discounted purchase price, then the discount can be considered as a deposit without putting any of your own cash into the purchase. Another example is the Right to Buy scheme, where some lenders just accept the scheme purchase discount as a deposit.
In other cases, you would typically need minimum 5% deposit. This is true when lenders offer 95% mortgages and for schemes like the Help to Buy equity loan scheme and other Shared Equity schemes offered by developers.
Having said the above, the minimum deposit amount may also depend on the property, for example, several lenders would require 15-30% deposit for a new build property. Some lenders would cap your borrowing at 80-85% if you’re a contractor, or at 70-75% if you’re a visa holder.
Can I buy a property, if I’m a visa holder?
Yes, although the lender options are limited, as most lenders would like you to have residency permit / indefinite leave to remain granted. Those who offer mortgages to visa holders often require a minimum residency time in the UK, minimum time left on the visa or set a maximum loan to value limit.
How long does the process take?
Well, it depends on all parties involved, although we can give you some generic guidance.
New build property
- The developer usually asks for an exchange of contracts within 28 days after you reserved a property and then completion takes place once the property is officially ready.
- During those 28 days, the mortgage process and the legal checks have to be completed. However, if there is a genuine delay for a few days, the developer normally accepts an extended period.
Non-new build property
- It normally takes 2 to 3 weeks to get a mortgage offer, although we’ve seen offers issued after a few days as well as after a few months.
- The legal process normally takes 2 to 3 months. However, if the seller is also buying a property and thus there is a chain, it can take several months before everyone in the chain is ready to exchange contracts and then to complete.